How to See My Credit Score Without Paying or Joining a Free Trial Period

Countless advertisements offer "free" copies of your credit report. What the ads don't tell you is that "free" refers to a trial period, after which your credit card will be charged on a monthly basis. Your credit score affects your ability to obtain financing and will help you detect identity theft, so reviewing it is essential. What many consumers don't realize is that, under the Fair Credit Reporting Act, they are entitled to one free credit report from each of the major bureaus (Experian, TransUnion and Equifax) in a 12-month period. The bureaus have joined together to create a Central Source for consumers to obtain copies of their credit reports online, by mail or over the phone.

Instructions

Online

1

Log on to Annual Credit Report website at annualcreditreport.com.

2

Select your state of residence from the drop-down menu. Click "request report." You will be taken to another screen.

3

Enter your first and last name, date of birth and Social Security number. Your Social Security number will be encrypted, and you can check the box below so that it only displays the last four digits of your Social Security number on the report.

4

Type your street address, city and state. Indicate if you have lived at your current address for at least two years. If less than two years, type your previous address below.

5

Type the security code into the box at the bottom of the screen.

6

Check the box next to each credit bureau you want a report from. You can check one, two or all three. Click "next" and your report will generate onscreen.

By Phone

7

Contact the Central Source by dialing 1-877-322-8228.

8

Follow the prompts and verify your personal information such as name, Social Security number and address.

9

Select which bureaus you want your credit report from. Your report will be mailed within 15 days. You should receive it two to three weeks after that.

By Mail

10

Download a request form from the Annual Credit Report website.

11

Complete the form and select which bureaus you want your credit report from.

12

Mail the completed form to:

Annual Credit Report Request Service

P.O. Box 105281

Atlanta, GA 30348-5281

Your report will be mailed within 15 days. You should receive it two to three weeks after that.

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How to Borrow Money at a Low Rate to Pay Off High Rate Credit Cards

Paying off credit cards with high interest rates has obvious advantages. Credit card debt can last for decades. For example, Utah State University reports that it can take 15 years and six months to pay off a $3,000 credit card balance at 18.9 percent if a person makes only a minimum payment of $50 dollars a month. At that rate, the debtor will pay $6,279.85 in finance charges. Taking out a loan to eliminate the interest-rate credit debt can result in immediate savings on finance charges. However, the Federal Trade Commission warns that debt consolidation does not reduce debt --- it just moves it around.

Instructions

1

Check billing statements or contact your card company to ask about the current interest rates on your cards. Make a list of your cards and rank them by interest rate, from the highest to the lowest.

2

Shop for loans that offer interest rates significantly lower than the highest interest rates on your cards. Home equity lines of credit (HELOCs) are an option if you are a homeowner with sufficient equity in your home to qualify. HELOCs offer some of the lowest interest rates available because the equity in your home serves as collateral. The strong collateral allows banks and credit unions to offer lower interest rates than on other types of loans.

3

Gather interest rates on other types of loans if a HELOC is not possible. Schedule an appointment with a banker or credit union loan officer to discuss your plan for paying off your credit card debts. Ask about other loan programs that might meet your needs, such as unsecured signature loans. Also check websites for other banks and credit unions.

4

Ask your bank or credit union about credit cards offering no finance charges through a promotional period of a year or six months. Some cards allow you to transfer balances from other cards. However, research the new credit cards thoroughly by reading the credit applications. The interest rate will change at the end of the promotional level and may exceed what you're currently paying on your most expensive card. The balance transfer option is best if you plan to transfer balances from high interest-rate cards and then pay the new cards off during the promotion.

5

Check your credit report and score. Get your credit report from AnnualCreditReport.com. The site offers free credit reports under the terms of the Fair Credit Reporting Act. Order your credit score separately, for a fee. The higher your credit score, the better your chances for approval on a low interest-rate loan. Scores of 720 or higher are excellent, while scores below 620 are poor. Write the credit bureau at its address on the report to dispute any wrong information on your credit report that could be causing a drag on your scores.

6

Borrow money at a low interest rate by applying for a HELOC, credit card or other loan. Apply by filling out paperwork from the bank. Same-day decisions are possible on some loans, but home equity loans require much more time, detail and paperwork.

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How to Quit a Job After a Wage Garnishment Is Ordered

If a creditor obtains a judgment against you for an unpaid debt, it may pursue collection of the debt through wage garnishment in most states. Only four states -- Texas, Pennsylvania, North Carolina and South Carolina -- prohibit wage garnishment for most consumer debts. If a judgment creditor has ordered your employer to garnish your wages, no law requires you to continue working to satisfy the garnishment.

Instructions

1

Write a resignation letter to your employer that includes your reason for leaving and the last date you will work. Be honest about the reason you are leaving your job. If your employer knows that you are quitting to avoid garnishment, the employer may consider you for employment in the future if you satisfy your judgment debt.

2

Deliver the resignation letter to your supervisor, manager or human resources representative. Explain the contents of the letter and ask whether you can come back to work for the employer if you pay your judgment.

3

Continue working for your employer through the date stated in your notice. Working for at least two weeks after you deliver your resignation letter helps your employer find a suitable replacement, and may increase your chances of rehire if your financial situation improves.

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What Happens If You Cannot Pay Your Unsecured Credit Cards?

A layoff, medical problem or sudden car repair can deplete financial reserves and create payment delays, even against your best intentions. Making the decision to forgo even the monthly payment on a credit card bill may furnish some necessary financial breathing space, but it comes with consequences. Forward thinking and action can minimize some of the damage.

Identification

Nonpayment of an unsecured credit card signifies that the cardholder has missed the 30-day window of on-time payment, including the grace period. For a payment to count, it must be at least the minimum monthly payment. A lesser payment won't count as a full monthly payment. The credit card company reports nonpayment at certain intervals to the credit reporting bureaus, so there's a negative mark at 30, 45, 60, 90, 120 and 180 days.

Significance

A nonpayment on an unsecured credit card carries significant repercussions. Your credit score drops and collection letters from the bank start arriving. The bank may also resort to repeated phone calls, which may become annoying. After a long enough period of nonpayment, the bank may sell the account to a collection agency, which also will pursue you through calls and letters. It can leave another negative entry on your credit report. The bank eventually may take you to court to sue for the proceeds. If you lose the case, the credit bureau records a judgment that stays on your record for seven years.

Effects

The effects of credit card nonpayment can worsen over time. A 30-day late notation isn't as bad as a 180-day late notation. However, it's enough to raise questions if you apply for a mortgage, credit product, job or lease. A missed payment can make a new potential creditor wary of extending a loan, and will drive up the interest rate on any loan product that you do obtain. Also, there's still interest accumulating on the account. Each missed payment means the interest capitalizes on the growing principal amount. After the first missed payment, look for your interest rate to rise. With certain cards, the rate can double or triple immediately after you've missed a payment and can stay that way, even after payment.

Misconceptions

After credit card nonpayment or default, a collection agency may take the debt. If that happens, know that you have rights, even though an unscrupulous collection agent may say differently. According to Illinois Legal Aid, a collection agency's best shot at collecting is to become a nuisance, and that's all it can do. "[A collection agency] cannot send you to jail -- you can never go to jail for owing money on a bill! They can't do anything more than bother you," Illinois Legal Aid says. According to the Fair Debt Collection Practices Act, a collection agency also cannot force you to pay, use obscene language, harass your friends, boss or family, or claim to be a lawyer or court. Any of these is a civil violation with at least a $1,000 penalty for each offense.

Prevention/Solution

If you can't pay your unsecured credit card debt, take steps to prevent problems. Call the bank and explain your circumstances. If possible, offer at least some sort of good-faith payment to show you intend to pay your bill. Even if the bank says no and the account goes into collection, you can still minimize the stress of collection attempts. Write a cease-and-desist letter to prevent further calls and letters. Also, check if you're collection proof: If you make below $371.25 a week, make income from a protected source like Social Security or own property less than $4,000 in value, collectors cannot pursue. Be proactive at the first sign of trouble to prevent your debt situation from becoming worse.

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Debt Negotiation Help

You don't have to negotiate your debts alone. You can get debt-management help if your accounts are in collections or you are in danger of defaulting. In fact, the most effective way to handle your out-of-control debt situation is by using the services of a debt settlement company. These companies specialize in debt negotiation and have established working relationships with lenders.

Debt Negotiation

If you are going through financial hardship, the best course of action is to notify your creditor about your financial situation. Ask for a reduction of interest to lessen your monthly bill or look to settle the debt for an amount lower than what you owe. However, most lenders do not like to enter into negotiations directly with borrowers. A creditor's main objective is to make a profit and it will look to collect on the full amount owed.

Debt Settlement

For a fee, you can use the services of a debt settlement company to negotiate with your creditors on your behalf. There are several benefits to using a debt negotiator. First, many already have working relationships with consumer lenders. Secondly, using a debt settlement company takes the pressure off you in having to deal with creditor when negotiations get tough or lengthy. Lastly, you may be able to reach a more favorable agreement by using a debt settlement service.

Process

There are a number of debt settlement companies. Do your research by going to the Association of Settlement Companies (TASC) website. This association is the industry trade organization. Choose a company that is TASC-accredited. Once you contact a company, you will be asked to provide financial information. The company may run a "soft" credit report from one of the credit rating agencies for information-gathering purposes. You must meet a debt threshold to qualify for a settlement program. Fees may be charged upfront; however, a reputable company only charges you if it can settle your debt. Certain debts cannot be negotiated, such as federal student loans and child support payments. Once you reach a settlement amount, you are required to abide by the payment plan as outlined in the agreement between the debt settlement company and the creditor.

Credit Counseling Vs. Debt Settlement

Credit counseling typically involves helping you to manage your finances. A credit counselor can negotiate an interest rate reduction, which lowers your monthly bill but it won't change your principal balance. In contrast, debt settlement involves a reduction of your loan balance to the lowest amount a creditor is willing to accept. Most debt settlement companies offer interest rate reduction and debt reduction programs.

Credit Effects

You credit report will reflect all actions, including debt settlement, on all credit accounts. A debt settlement will remain on your credit report for seven years which will lower your credit score. In general, settling with your creditors is viewed in a more positively than if the account is charged-off, which also remains on your credit report for seven years.

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How to Get Credit Card Companies to Lower Payments

Requesting your credit card company to lower your payments can be an ideal way to save money. Most credit card companies will only lower your monthly payments during a hardship. A hardship can include job loss, childbirth, death in the family, disability or chronic illness--to name a few. Speaking with your credit card company about ways to lowering monthly payments may preserve your credit history and save you money during your hardship.

Instructions

1

Gather all of your credit card bills. Among other things, your credit card bill will have the account information, monthly payment, total due and the customer service number.

2

Call your credit card company and be ready to explain your situation. Most credit card companies have a special department that will assist their customers with payment arrangements. The representative will ask specific questions regarding your hardship and determine if the situation is permanent or short-term. The representative will ask questions regarding your current debt and income.

3

Try to negotiate a monthly payment that fits your budget. The representative will review your account history and make a recommendation based on what she think you can afford. If the suggested amount doesn't fit into your budget, negotiate your monthly payment.

4

Ask for a lower interest rate. Most hardship programs will automatically lower your interest rate. If this feature isn't offered to you, ask if you can temporarily have your interest rate lowered for a specific period of time.

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How to Refinance in Arizona

Refinancing your home mortgage in Arizona should be a straightforward transaction. However, the local economy and state of the Arizona housing market at the time of your refinancing could make the process challenging. For example, in December 2010 "The Arizona Republic" reported that Phoenix ranked third in the nation in mortgage delinquencies, as the entire state continued to struggle with a housing crisis. Refinancing your mortgage in Arizona under conditions similar to those could require you to have exceptional credit as lenders tighten lending guidelines. However, in a good economy, refinancing in Arizona should be as easy as refinancing in any other state.

Instructions

1

Determine the value of your home in Arizona by ordering an appraisal from a licensed appraiser or seeking the advice of a licensed Arizona real estate agent. The real estate agent can compare your home with others that have recently sold in your neighborhood. It is possible that your home in Arizona may have lost much of its value because of a housing crisis, making a refinancing impossible. The MSN Money website reported in 2009 that property values had declined sharply in states hard hit by foreclosures. The foreclosure rate in Arizona was twice that of the national average during the height of the housing crisis at the end of 2008, according to the Federal Reserve Bank of San Francisco. Use the information from the appraiser or real estate agent to compare the fair market value of your home with the mortgage balance. MSN Money reports that to qualify for refinancing your mortgage balance should not exceed 70 percent of the value of the home. Some lenders may have stricter requirements.

2

Obtain a free copy of your credit report from AnnualCreditReport.com. The website is managed by major credit bureaus Experian, Equifax and TransUnion, and is the only site endorsed by the Federal Trade Commission to offer free credit reports under the terms of the Fair Credit Reporting Act. Visit the website to view and print your report (see Resources). After receiving your report, follow the included instructions to order your credit score, separately, for a fee.

3

Review your credit report and score with the assistance of a government-certified housing counselor in Arizona. Examples include Genesis Housing Services, in Gilbert; Community Services of Arizona, in Glendale; and Housing Our Communities, in Mesa. The nonprofit housing counselors know all about the current real estate market and refinancing trends in Arizona, and can offer credible refinancing advice based on the market conditions and your credit situation. Find a certified housing counselor in Arizona by checking the website for the U.S. Department of Housing and Urban Development (see Resources).

4

Ask the counselor specifically about avoiding refinancing scams in Arizona. In November 2010, Arizona Attorney General Terry Goddard filed suit against one company that allegedly defrauded more than 140 homeowners through a so-called "sales lease-back" scheme. Goddard reported that some of the homeowners thought they were refinancing their mortgages but were actually signing over their property to a company.

5

Apply for your refinancing at a credible lending institution, such as a bank or credit union. As in any other state, you will have to meet certain qualifications, such as income documentation.

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Budget Guidelines for Credit Counseling

Bad budgeting often leads to credit problems that may require outside assistance. Credit counseling companies offer helpful services, from retooling budgets and teaching financial management skills to preparing and administering formal debt repayment plans, according to the Federal Trade Commission website. You can get your budget back on track and bring your debt under control with a legitimate credit counselor's help.

Self-Help

Good credit counseling firms do not just focus on structured debt management plans. The FTC explains that they offer tools you can use for self-help. For example, a counselor will go over your finances with you and discuss guidelines for making a new budget aimed at making on-time payments and reducing your debt steadily. Services are usually offering on-site at an office, on the phone or over the Internet. You can also attend financial management seminars through many counseling firms.

Formal Budget Plans

You may not be able to set up or follow budget guidelines on your own if your finances are in very bad shape. A credit counselor can set up a formal debt management plan for you, if necessary, and handle monthly administration. The FTC explains that good DMPs focus on getting you debt-free within about five years. The counselor works with you to determine your fixed monthly expenses and talks to your creditors, sometimes getting concessions on interest rates and fees. You determine a workable budget with the counselor and send a monthly payment amount to the counseling firm, which pays your individual bills out of that larger payment.

Bankruptcy

Sometimes your financial condition is so poor that bankruptcy is the best option. A credit counselor can help you determine whether a budget will help you or whether you need court assistance to get back on track. Federal law requires you to go through pre- and post-bankruptcy budget counseling with approved providers, according to the FTC. The sessions cover other options and teach you guidelines for proper budgeting once your case is discharged to prevent future problems.

Considerations

Not all credit counseling companies are legitimate, even if they advertise not-for-profit status. The Better Business Bureau advises choosing a counselor carefully by looking for a licensed firm with personnel trained and certified by an outside organization. Ask if the firm is a member of the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies, two professional groups that promote ethical practices. Both of these organizations offer referrals to counselors.

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How to Handle a Garnishment Notice

The federal government uses the term "levy" when referring to a garnishment. A garnishment gives a creditor, debt collector or legal entity, such as the state or the Internal Revenue Service, the legal right to seize your property, or rights to property, to satisfy a debt you owe. A debt collector or creditor must obtain a court-ordered judgment to garnishee, and the court sends you notice of the lawsuit filed against you. The federal and state government can impose a levy without a court order but must send you a notice before doing so. There are several ways to handle a garnishment notice.

Instructions

1

File an appeal within the appropriate time frame. The garnishment/levy notice includes instructions on how to file an appeal. In most cases, you have 45 days in which to file an answer with the court. For IRS and state tax levies, and federal student loans, you have 30 days from the notice date to respond to the notice. Appeal if you object to any aspects of the garnishment or wish to discuss payment options, such as an installment plan.

2

Pay off the debt in a lump-sum payment if you can afford to. If you need some time to gather the funds, let the garnishment-issuing agency know. For example, the IRS may be willing to stop collection on your wages to give you the time you need to gather the funds.

3

Make a hardship claim with the issuing agency if the garnishment would cause you financial hardship. You have the right to a hearing, for example, if a student loan wage garnishment would cause you financial duress. Complete a Request for Hearing form and submit it to the U.S. Department of Education's Hearing Branch. If the issuing agency agrees with your claim, it can temporarily stop collection or offer you a reduced payment.

4

Settle the debt for less than you owe. Before agreeing to a settlement, the issuing agency will look at your ability to pay, assets, income, expenses and whether the settlement is in the agency's best interest. For IRS and state tax levies, a nonrefundable deposit may be required when you make the offer. Consult a tax expert if you decide to take this route.

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Can SSI Benefits Be Garnished?

The terms garnishment and levy refer to the legal process of intercepting or taking money from wages or bank accounts. For public policy reasons, SSI and SSDI benefits are generally exempt from garnishment or levy.

Legal Procedures

For non-governmental creditors to attempt to levy or garnish an SSI or SSDI recipient's bank account, the creditor must obtain a court judgment. Accordingly, an SSI recipient has the opportunity to contest the garnishment through the court process. Debtors should file a legal response to garnishment at the earliest opportunity in order to avoid complications later.

Exempt Funds

Section 207 of the Social Security Act (42 U.S.C. 407) prohibits non-governmental creditors from garnishing or attempting to levy on an SSI recipient's income or a bank account with SSI income on deposit. Governmental agencies may only garnish bank accounts or withhold SSI benefits if one of the specific exceptions apply.

Exceptions

Creditors are allowed to garnish bank accounts of an SSI recipient only to the extent that non-SSI funds are deposited in the bank account. Government agencies are allowed to garnish SSI income to pay outstanding child or spousal support obligations, unpaid federal taxes and non-tax obligations owed to a federal agency, or when a recipient has consented to withholding for tax obligations for the current year. The IRS can garnish or withhold a recipient's income only up to 15 percent of each monthly payment owed to the recipient.

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Texas HELOC Rules

Texas law allows residents to create home equity lines of credit (HELOC) on the value of their homes for a variety of purposes. However, there are several rules that must be followed under penalty of law. These rules, which are clearly stated in Texas law, establish limits on HELOCs; control and regulate the loan process; ensure the financial best interests of both borrowers and lenders.

Definition of HELOC

In Texas, a HELOC is defined as an "open-end account that may be debited from time to time, for which credit may be extended from time to time and which is subject to certain fees." It is different from a pure home equity loan and therefore is subject to slightly different rules. A HELOC draws out the equity in the home to be used at the owner's discretion as a line of credit. HELOCs accrues interest and must be repaid.

Setting Up a HELOC

A homeowner sets up a HELOC through the mortgage lender or other entity that has financed the home. Payments that are made to the homeowner are called advances and are paid from the equity in the home (equity equals the original value of the home minus the debt on the home). Repayments of a HELOC are not required until two months after the initial advance. Any owner who is also a named borrower on the HELOC may take out an advance.

Requirements of HELOCs

Repayment of the HELOC must occur at regular intervals of no less than every two weeks and no more than monthly. Each payment must equal or exceed the amount of accrued interests. The HELOC may include provisions that prevent certain borrowers from taking advances or may require all borrowers to give statements of consent to any advances taken.

Prohibitions with HELOCs

A lender cannot charge prepayment penalties for a borrower paying a HELOC in advance. The borrower is given full discretion in paying the HELOC early. Only the home and no other property can be attached to the HELOC. A fee cannot be charged for taking out an advance. The HELOC cannot be secured with a credit card, debit card or preprinted check. The value of the principal of the first advance plus any debts on the home cannot exceed 80 percent of the fair market value of the home. Any additional advances cannot exceed 50 percent of the fair market value.

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Ideas for a Hardship Letter

A hardship letter is a letter that you draft to a mortgage holder or another type of lender to explain a financial setback. The letter typically asks for assistance in keeping a loan out of foreclosure, an adjustment in debt interest or payment amounts or the forgiveness of debt repayment penalties while you get back on your feet. Before you sit down to write your hardship letter, there are a few ideas to keep in mind to win your lender's sympathy and support.

Format

The hardship letter follows a simple format. To begin, you should provide complete contact information, including street address, cell phone numbers and email address. In the first paragraph, you should acknowledge the debt, state that you know you are behind on payments and ask for the type of assistance you want, such as a loan modification, extra time to catch up on payments or a short sale. In the second paragraph, you should explain your hardship. If you can honestly do so, tell the lender that the problem is time-limited and that you are even now working to resolve it. In the third paragraph, wrap up the letter by repeating what you want and indicating a willingness to look at other options the lender may suggest.

Length

Even though your story may seem very complex to you, most lenders don't have time to read long, detail-filled letters. Try to keep your letter to a single page or to an absolute maximum of two single-spaced, typed pages. The bulk of your letter should be devoted to explaining your hardship and how you want to work with the lender to deal with it.

Deal in Facts

The fear of losing a house is understandably a very emotional experience, but most lenders are not moved by tears, pleas, assurances that nothing like this has ever happened to you before or paragraphs detailing your innermost feelings. You are dealing with the business world, so make sure your letter is professional, not chatty or melodramatic. Discuss what has happened in your life to create the hardship and how you want to address it. For instance, you might write, "Our mortgage is past due for three months because my husband has not been able to work due to a back injury. We anticipate that he will be able to return to work part time next month, but he will only be making half of his regular salary. Therefore, we are seeking a loan modification to lower our payments and allow us to keep our home."

Acceptable Reasons

Many life changes can throw a person off-balance financially. Some of the more common reasons people use when they are asking for temporary relief from their mortgage or other debts are illness or injury, job loss or other economic downturn, death of a co-borrower, divorce, incarceration, military duty or separation, medical bills and property damage.

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How to Change Your Debt Ratio

Debt ratio is the percentage of monthly gross income used to make debt payments each month. Some consumers pay little attention to their debt ratio. However, a high debt ratio can influence qualifying amounts for mortgage loans and automobile loans. To maximize buying power when financing items, it's imperative to maintain a low debt ratio.

Instructions

1

Ask your employer for a raise to increase monthly and yearly earnings or seek a position with your company that pays more. A higher-paying position changes your debt ratio because it reduces the percentage of your income spent on debt payments. For example, if you make $2,000 a month and pay $1,000 towards debt each month, your debt ratio is 50 percent. Increase your income to $3,000 a month and your debt ratio drops to 33 percent.

2

Apply for part-time evening jobs if an employment raise isn't an option. A second job in the evenings or on weekends adds income that lowers your debt ratio; and with the extra cash, you can pay down debt quicker.

3

Reduce living expenses as much as possible. Paying too much for a mortgage loan, rent or auto loan can negatively impact your debt ratio. If unable to earn additional income, modify your lifestyle and reduce recurring monthly expenses. Sell your current car and purchase a car with a much cheaper payment, or move into a home with a less expensive mortgage or rent. These methods reduce how much you spend on debt payments each month, and help increase personal savings.

4

Pay down your credit card debt. Maxed out credit card accounts will raise your debt ratio. Develop a strategy to eliminate balances and change your debt ratio. Keep cards locked in a place that's not easily accessible. Pay on time to avoid late fees and interest rate increases, and always more than the minimum to avert lingering balances.

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What Is the Process for Charging Back Credit Cards?

When you are dissatisfied with a purchase, options are to return the merchandise to the store or suffer buyer's remorse. However, a third option may be to request your credit card company resolve the situation on your behalf.

Defective Merchandise

For purchases made on your credit card, you have the right to charge the sale back on your credit card if the merchandise is damaged or substandard. Before contacting your credit card company, take the product back to the merchant for your money back or store credit. If this is unsuccessful, contact your credit card company using the toll-free customer service number on your credit card statement.

Merchandise Not Received

Merchandise purchased online or by mail that is not received within the merchant's published shipping time may also be charged back. Again, first attempt to allow the merchant to resolve the situation to your satisfaction.

Unauthorized Transactions

Sometimes credit cards are used to reserve hotel rooms, rental cars or travel packages. Whenever you have given out your credit card number, be sure to examine your statement carefully. Any charges you did not approve can be charged back.

Merchant Responsibilities

A merchant is responsible for verifying that a sale meets customer satisfaction. When a credit card is used, the merchant is also responsible for verifying that the transaction was properly authorized.

Cardholder Responsibilities

The card holder's job is to allow the merchant to resolve your complaint. If the merchant has clearly posted that only store credit is allowed for returned merchandise, a charge back may not be allowed. Call your credit card company for guidance.

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How to Figure Up Child Support for Arkansas

Child support guidelines help state judges order child support in a fair manner that serves the children's best interests while leaving the non-custodial parent with enough money to take care of his daily needs. In Arkansas, judges use a child support table to determine the basic amount of child support that is fair based upon the parent's income. However, if a parent is deliberately underemployed, he may be required to pay a higher amount of child support than would be normal for someone making that amount of income.

Instructions

1

Calculate your total income for your pay period (monthly, biweekly or weekly). All wages, tips and investment dividends count for these purposes. Do not count reimbursement for court costs in your income. If you are self-employed, use your last quarterly earnings to estimate your earnings.

2

Consult the Arkansas Family Support Chart that matches how frequently you get paid. Round your income down to the nearest ten if your exact income is not on the chart. For example, if your income is $225, use the line for $220.

3

Find your approximate income on the chart and go across the row to the number of children you must support.

4

Take the percentage of income required by Arkansas law if you make more money than is listed on the chart. As of 2010, the percentages are 15 percent for one dependent, 21 percent for two dependents, 25 percent for three dependents, 28 percent for four dependents, 30 percent for five dependents and 32 percent for six or more dependents. For example, if you make $1,500 per week and have two children, multiply $1,500 by .21 to determine that you should pay child support of $315 per week.

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How to Calculate a Debt Settlement

While debt settlement is one of the best ways of getting out of debt, pros and cons are attached to it. Creditors only agree to the calculation of a debt settlement when they are certain that the debtor will not be able to pay off the entire loan amount and they want to get back at least part of the money owed to them. Calculation of a debt settlement and payoff is more favorable to the debtor because he pays less than the total amount owed.

Instructions

1

Calculate the debt-to-income ratio, which will give you the percentage of your income that goes toward payment of interest on existing debts.

2

Add together your total monthly debt, which comprises house rent plus credit card payments plus car loan payment (if applicable) plus all other payments made on outstanding expenses.

3

Divide this figure by your total monthly income. Your annual income divided by 12 months will give you this figure.

4

Take the above amount and multiply by 100. That is the percentage of debt-to-income ratio.

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How to Get Legal Advice on Credit Card Debt

Overwhelming credit card debt is crippling. It may be impossible to catch up on your payments if you have fallen behind. Many people with large amounts of credit card debt are ashamed and embarrassed, and do not know where to go to for help. Before you make a decision on how to deal with your credit card debt, you should seek legal advice.

Instructions

Credit Counseling Service

1

Search for a legitimate credit counseling agency. Make sure it is a nonprofit organization, and check with your local Better Business Bureau to make sure there are not complaints against the agency. There are legitimate agencies that will help you, but there are also companies with questionable ethics that may put you at greater risk or just take your money. Look for a company that has been open for several years.

2

Contact the agency to ask for advice on dealing with your situation. A credit counseling agency will look at your expenses and your income and help you to set up a budget and payment plan. Additionally they will contact your creditors to try to get your interest rates lowered to make payment plans easier.

3

Follow the plan that the agency sets out for you. This will help you get out of credit card debt. Stop using your credit cards and change your lifestyle so that you will no longer be in this situation.

Bankruptcy Lawyer

4

Find phone numbers for several different bankruptcy lawyers in your area. Contact them and ask for referrals or client recommendations. If you know someone who has filed bankruptcy, ask him for the name of his lawyer.

5

Set up a consultation with a bankruptcy lawyer about your credit card debt. Most lawyers will schedule an initial consultation for free. Bankruptcy lawyers are familiar with credit card laws and should be able to answer any questions you have about getting control of your credit card debt.

6

Determine if you qualify for bankruptcy and decide whether or not it is the right option for you. Bankruptcy can help you get control of your debt, and the judge may set up a payment plan for at least some of your debts. It will have a negative impact on your credit score that will last for several years.

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Is There a Credit Line With Secured Credit Cards?

All secured credit cards have credit lines, which are called credit limits. Credit limits restrict how much you can charge on the card. On secured accounts, the credit limit usually is equal to the amount of money you deposited to open the account. Some banks establish a credit line that is a little less than the cash you have on deposit. The money acts as collateral, removing risk for the bank in case you default on the credit card payment.

Purpose

Secured credit cards appeal to people who are seeking their first credit card and those rebuilding their credit. The cards are easy to qualify for because of the collateral provided by the deposited money. These credit cards can also be expensive because of the high interest rates charged despite the collateral. Some banks also charge a fee to open the account, and expensive, over-the-limit fees sometimes are assessed, because most people start with low credit limits of around $500. That low amount makes it easy to exceed the credit limit by a few dollars, triggering extra fees.

Increases

Some banks increase your credit limit after you make an additional deposit, while others automatically grant increases after about a year if you never miss a payment. Some people with small initial credit limits create a cushion by making an additional payment besides paying their balance in full each month.

Upgrade

Some secured credit cards maintained in good standing become eligible for an upgrade to unsecured status. This eliminates the need for collateral and shows that you are making significant progress building credit. Banks have their own guidelines for upgrading accounts but consideration often is possible after 12 to 24 months.

Biweekly Payments

Biweekly payments to your secured credit card account are a way to impress the card company and become eligible for credit limit increases and upgrades. With biweekly payments, your payment will never be late, and, over a year's time, you'll make 26 payments -- 14 more than you would make with the 12 monthly payments. On-time payments and keeping balances low are keys to effective credit management.

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Do Debt Reduction Programs Affect Credit Scores?

Debt management plans (DMPs) are the debt reduction programs recommended by credit counselors. Do not confuse debt management plans with debt negotiation or debt settlement, both of which have much different impacts on your credit score. Under a DMP, your credit counselor will work with you and your creditors to create a map to your financial freedom.

Definition

You may only sign up for a debt management plan if a credit counselor has recommended one for your specific circumstances. Once you sign up for a DMP, the counselor will contact your creditors to negotiate lower interest rates or payoff balances. DMPs typically last three to four years, and during that period you make one monthly payment to the credit counseling organization which, in turn, pays your creditors.

Pros

Participating in a DMP may help you to pay off your credit cards more quickly. Also, the appearance of a DMP on your credit report doesn't affect your credit score at all. According to a Bankrate article, the Fair Isaacs Corporation doesn't believe in punishing consumers who are taking responsible actions to improve their credit standing. Those who utilize DMPs have often defaulted on past payments, which has a far more negative effect on a credit score, impacting your credit score for up to seven years.

Cons

Although a DMP doesn't impact your credit score, some lenders may be hesitant to lend to you because of its appearance on your report. While you're paying off your debts, a DMP indicates that you couldn't pay off the full amount, which may make lenders leery of lending you money. However, according to Experian's vice president of consumer affairs, Maxine Sweet, most lenders look at the credit score and not the comments when considering loan applications. By paying off your debt faster, you will boost your credit score and be eligible for better credit offerings.

Considerations

With so much information about debt negotiation, debt settlement and credit counseling floating around, it's vital to work with a reputable credit counseling agency. The Federal Trade Commission recommends working with an organization listed on the National Foundation for Credit Counseling website. A reputable credit counselor will not only help you to get your debt paid off more quickly, but will also assist in putting together a budget so that you don't end up in such dire financial straits again.

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Is a Surviving Relative Responsible for a Parent's Unpaid Bills?

A surviving relative, even one who is an heir, is not responsible for a parent's debt. Debts are not wiped out by death, however. Debt collectors may legally seek from the estate of the deceased borrower payment for any debts owed.

Debt Survives Death

A parent's debt remains active even after death. Debt collectors also remain active. Sometimes, according to the AARP, they start calling relatives after the borrower's death. They know the relatives have no legal responsibility to pay, but that doesn't always stop them. The proper way for a lender to collect a debt after death is to make a claim in probate court or to a successor trustee of the debtor's trust estate.

Debt Responsibility Doesn't Transfer with Estate

If your parents left you everything in their will, what you are entitled to is everything they had minus what will be paid to their creditors before the contents of the estate are transferred. The remainder will transfer to you, not the debt. If the debt collectors do not respond to notices from the probate court or successor trustee, those debts will be expunged.

Exemptions from Debt Collection After Death

Life insurance is exempt from debt collection. Some states place exemptions on estates from debt collection after death. In Minnesota, for example, one vehicle, one house and up to $10,000 in belongings are exempt from most creditors. Creditors with secured debt, however, such as mortgage lenders, are free to foreclose upon or take back the secured property for repayment of the debt should the estate or heirs not keep up with payment.

When There Is No Estate

Not everyone leaves an estate. It is entirely possible to die with only debts and no assets. In that case, the debts are not collectible and the lenders must write them off as losses.

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How to Add an Authorized User Who Has Bad Credit to a Credit Card

Authorized users on credit accounts are not financially obligated to the repayment of the account. Parents often add their college-age children to their credit cards as authorized users. This helps give them some extra cash while at the same time building their credit. Adding an authorized user is not difficult, so long as the credit card company offers this service.

Instructions

1

Understand that credit card companies are not concerned about the credit history of authorized users. They do not even perform a credit check. Since the account is already open under the original applicant's credit (and that credit was sufficient), credit card companies usually allow one or two additional authorized users.

2

Contact the customer service department or account servicing department of your credit card company. Ask whether or not they allow authorized users.

3

Obtain a copy of an Additional Cardholder Authorization form. These will vary from lender to lender, but essentially the document tells the original borrower that he or she is responsible for any debts accumulated by authorized users.

4

Carefully review the document with proposed authorized user. Original borrowers also have the power to remove authorized users at any time.

5

Fax or mail the completed authorized user agreement to your credit card company. You may need to wait as much as 3 to 4 weeks to receive confirmation and a new credit card for the authorized user.

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How to Stop a Foreclosure Sale on the Same Day

Many homeowners lose their homes to the foreclosure process through lack of action. There are a number of ways to avoid losing your home, and there may even be a way to stop a foreclosure sale on the same day it is scheduled to happen. Waiting too long to respond to a foreclosure notice, or failing to react altogether, will limit your options as the foreclosure auction date draws nearer. Most methods for saving your home from foreclosure need to be attended to early on in the foreclosure process or even before the process has begun, at the first signs of financial trouble.

Instructions

1

Consult with your lender. Ideally, you should arrange a face-to-face meeting with your lender, if possible. Consider selling other assets to come up with the necessary funds to make your mortgage payments current. Let your lender know of your intentions, and negotiate payment arrangements.

2

Pay what you owe. Some states like California allow you to satisfy your mortgage default within up to five days of the scheduled public auction. Contact your lender to find out the absolute latest deadline for which it will accept payment to stop the foreclosure sale and the minimum amount it will accept.

3

Borrow the money. Work out a cash loan arrangement with a family member, friend or business partner that covers all payments owed, penalty fees and any attorney's fees incurred by the lender for which you may be responsible. Stop the foreclosure sale on the same day by contacting your lender to arrange payment of all monies due.

4

File for bankruptcy. When you file for Chapter 7 or Chapter 13 bankruptcy, an automatic stay goes into effect immediately and requires all creditors to stop their collection activities, including a foreclosure sale. The sale is postponed pending a bankruptcy ruling, typically for three to four months, during which time you may not be making mortgage payments and can save enough money to satisfy your default.

5

Hire an experienced bankruptcy attorney. Particularly if your goal is to keep your home by stopping the foreclosure process, it is advisable to have a qualified bankruptcy attorney to help you successfully complete the process. All actions taken to stop a foreclosure must be agreed to by the lender, with the exception of a Chapter 13 bankruptcy, which prevents a lender from foreclosing on you for the duration of the three- to five-year repayment period.

6

Keep in mind that filing for bankruptcy has its drawbacks. If you are still unable to meet your debt obligations, bankruptcy will only delay the inevitable, and your credit score will suffer. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 requires you to obtain credit counseling within 180 days before filing for bankruptcy. Filing for bankruptcy to stop a foreclosure sale on the same day may result in your house being sold anyway, as there will be a delay in the lender getting the information, in which case you may be struggling to reinstate your title to the property for months to come.

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Creative Ways to Pay Off College Debt

If you are one of the students able to make it through four or more years of college without accruing debt, that is to be commended. If not, then you are most likely searching for creative ideas to lesson the load of debt. There are numerous ways to increase your income without demanding too much of your time.

Yard Sale

Look around the house for items to sell in a yard sale. You may also let family and friends know your financial goals so that they will be willing to donate items. Make sure the items you are selling are clean and in good shape. Sell in an area where there is plenty of traffic. When selling, have the items categorized in specific sections such as clothing, shoes and housewares. This makes it easier for the shopper to find just what he needs. Put a price tag on each item or post a sign listing prices of goods. The key to a yard sale is negotiation. The buyer will expect you to be willing to negotiate. It is fine to be flexible within reason. Remember your first priority is to pay down those debts. A great way to advertise is through word of mouth. You may also want to make signs to post in your neighborhood and at busy intersections. "One man's garbage is another man's gold."

Baby-Sitting

Consider baby-sitting. Baby-sitting is a great job for weekends or evenings when parents might want to run errands or have a date night. Having a previous background working with children is a definite plus in this job. You may begin by stating your baby-sitting interests to family and close friends who have children. You will have an advantage since you are already familiar with the children's habits. When you are ready to build your clientele, seek the resources of a baby-sitting services to help you market your skills. You will need to provide a professional resume and references with contact information. When interviewed, be honest about your skills and comfort level. Do not accept an assignment that you feel uncomfortable with. Taking an infant/child CPR class is a plus as well as stocking up on books and activities for children.

Find a Roommate

Lower living expenses by finding a responsible roommate or two. It is better if you already have a prior history with your roommates. If that is not possible, advertise for a roommate near colleges or in the local newspaper. Determine the types of people you are willing to live with, and do not stray from that. Ask for references from previous landlords, and verify the prospective roommate's employment. During the interview, set guidelines up front so there will not be any surprises for you or your roommate. Discuss how rent, utilities and grocery bills will be split. Once everything is decided, you may want to get the agreement in writing to protect your interests in the long run.

Proofread and Type Papers

Offer your services as a proofreader or typist if you possess excellent grammatical skills and have a fast typing speed. Advertising on and near college campuses is a way to find college students and graduate students who do not have the time to type assignments or who need someone to double check a paper's grammar. Tell your rate upfront and the turnaround time for each paper. Once you have done a satisfactory job, you will most likely be contacted continuously and get more jobs through word of mouth advertising.

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How to Save Half of Your Income

Saving half your income is challenging, but doing so could help you live debt-free. Putting that much money away every year forces you to make hard decisions about how much to spend on vacations, housing, automobiles and just about everything else. For people who start early, saving half their annual income could lead to an early retirement. That's possible because they will save a year's salary every two years they follow the plan, meaning someone starting at age 22 could put away 15 years of salary by age 52. With compounding interest on the money and future income from retirement plans, the investor could be set financially for life.

Instructions

1

Make a list of your current income and expenses. Determining how much to save is the easy part; deciding what expenses to cut is the hard part. Your goal is to save 50 percent of your net income---the amount you receive each payday after standard deductions such as income taxes and health insurance.

2

Choose a date for starting your plan. If you're single and fresh out of college with no debt, you may be able to start on your next payday. However, you may need more time if you already have significant debt such as a mortgage or a big car payment or you have an expensive lifestyle with lots of luxury vacations, fine dining and hobbies. It takes time to dial back that kind of living, and it could take months or even years before you're ready to start saving half your income if that's your current situation.

3

Slash expenses if you cannot save half your income with your current lifestyle. Your strategy for cutting expenses will depend on your current debt obligations and lifestyle. Downsize, if necessary, by selling your house and moving into an apartment. Get rid of a big car payment, if possible, by selling your car and buying a cheap used car for cash. Or pay off your car loan as quickly as possible by taking a second job --- or even two additional jobs. Even before selling the house and the car, slash discretionary spending to the lowest level possible. Get rid of cable television. Stop buying books, and magazines; use the public library instead. Use coupons from the newspaper and other sources to significantly reduce money spent on groceries and services. Keep a diary of all your spending. Analyze the notes regularly to determine what spending you can eliminate.

4

Pay off credit card debt, student loans and other obligations to create greater cash flow. Take extra jobs to pay off the debt.

5

Save money before it reaches you by enrolling in savings programs offered by your employer. Increase your contributions to the maximum allowed by your employer. Start gradually, if necessary, and regularly increase your contribution as your income increases and your expenses decrease. Stay with your strategy of ruthlessly eliminating debt and expenses until you are saving half of your income.

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How Does the Financing Process Work?

Financing is the process of obtaining funding for a piece of property. People use financing when they are unable to pay for an item in full using their own money. There are many ways to obtain financing, but certain standards apply to the process to help lenders assess the borrower's level of risk.

Applying

The financing process starts with an application for a loan or credit. You complete an application that includes personal information like your social security number, full legal name, current and previous addresses, and the type of financing you need. The application serves as an administrative tool and consent form for a lender to pull your credit score.

Identification

To decrease instances of fraud, valid identification is mandatory when you apply for financing. Many lenders request that the ID have a photo and be government-issued. If you are applying for financing, bring originals rather than relying on copies. The financier will make his own copies of your ID once you complete your application.

Income Documentation

Lenders seek borrowers with sufficient income to service the debt. Consistent income requires employment. A lender might ask for pay stubs and tax returns to verify your income and employment. If you are self-employed, tax returns and bank statements are generally requested instead. The primary goal of this step in the process is for the lender to determine whether you have the means to repay the loan.

Debt to Income

In addition to ensuring you have debt, some financing is contingent upon how much debt you have compared to your income. A high debt-to-income ratio raises a red flag for lenders. Someone with more debt than their monthly income is not able to take in additional payments even if they earn a substantial income every month.

Credit

Financing usually involves obtaining a loan or credit for a fee. The fees charged to your debt come from interest payments. Creditors who provide financing pull credit scores to find out whether you are a high or low risk borrower. A low credit rating means you are a high risk to the creditor. The higher your risk, the higher the lender usually sets your interest rate.

Considerations

The financing process varies by lender, but taking care of your credit and having sufficient income increases your chances of approval. Each phase of the financing process has its own set of parameters to help lenders obtain accurate information. In advance of your application, prepare your financial documents so they are easily accessible.

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How Does Debt Consolidation Work?

Why Consolidate Your Debt

You may want to consider consolidating you debt if you are having trouble making the payments on all of your loans. If you have several loans with high interest rates and high monthly payments you can put them all into one loan for a longer period of time and make a smaller payment each month. The common types of loans that you would want to consolidate are credit cards, high interest car loans, boat and RV loans and any personal loans with a high interest rate.

Disadvantages of Debt Consolidation Loans

If you have a few credit cards that are charging you 20 percent interest but have a low balance, say under $2000.00, you could put a little extra toward the balance each month and pay it off in a year. If you were to put them into a debt consolidation loan, you would be paying a much lower interest rate but paying on them for the next 15 to 30 years. Over this much time you will be paying much more than if you paid the higher interest rate. Plus, most debt consolidation loans are mortgages and will attach to your property, so you want to make sure you can afford the extra payment or they can foreclose on your home.

Advantages to Debt Consolidation Loans

If you are getting behind on credit card payments you start to get charged late fees which only makes your balance and your payment higher. If they are over 30 days late, you may be hurting your credit score. If there is no way you can keep up, then a debt consolidation loan is for you. You can take all of your debt and put it into one loan at a lower interest rate for a longer period of time, resulting in a much lower payment. One you can afford, and keep a good credit rating. If you do this, do not make the mistake of running up your credit cards again and having no way out.

Where to Get a Debt Consolidation Loan

You can start by contacting a mortgage broker in your area. They will sit down with you and figure out what type of program is best for you. If you have a lot of equity in your home, you may consider refinancing your first mortgage to get the best rate. You can also take out a second mortgage or open a home equity line of credit. If you don't have too much debt you may try one of the bigger credit card companies and see if they have a program where you can transfer all the balances of you other cards with a lower interest rate. Local savings and loans are also a good place to try to get a personal loan. You may be asked to do some credit counseling by the company that agrees to do your loan.

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Can I Work With the Credit Bureau to Remove Charge-Offs?

A charge-off occurs when you do not pay a credit card provider and the company writes off the debt for tax purposes. Credit card companies charge off delinquent account balances after 180 days. The charge-off then appears on your credit report as a negative trade line. Fortunately, in some situations you can work with the credit-reporting bureaus to have the derogatory account removed from your credit files.

Credit Disputes

The credit bureaus will not work with you to remove accurate negative information. If any aspect of the trade line that reflects the charged-off debt is incorrect, however, you have the right to dispute the entry directly with the credit bureaus. The Fair Credit Reporting Act (FCRA) requires the credit bureaus to conduct an investigation into the charge-off's validity and to remove the entry from your credit report if it is incorrect.

Obsolete Charge-Offs

A charge-off should not haunt your credit report forever. The FCRA restricts charge-offs to a seven-year reporting period. This period begins the day your payment to the creditor is 180 days late. Once this period expires, the credit bureaus must remove all evidence of the entry, including any collection accounts that resulted from the charge-off. Unfortunately, not all consumers see derogatory entries removed within the appropriate time frame. If you find an obsolete charge-off in your credit records, you can notify each credit bureau of that fact to have the charge-off removed.

Original Creditor Investigation

The FCRA does not restrict consumers to dealing only with the credit bureaus when correcting reporting errors. As of 2009, you reserve the right to file disputes directly with the information provider. Like the credit bureaus, the information provider will investigate your claim. If it discovers that a charge-off was reported incorrectly, it will tell the credit bureaus to update your credit report with the correct information.

Frivolous Disputes

While federal law requires the credit bureaus to investigate all initial consumer disputes, the FCRA does not require the bureaus to investigate any subsequent disputes you have if the bureaus previously verified that the charge-off on your credit report is accurate. The credit bureaus have the legal right to categorize such disputes as "frivolous" and refuse to acknowledge them.

Legal Recourse

If you cannot correct an erroneous charge-off on your credit report by disputing the trade line with the credit bureaus and the information provider, you can take your case to court. The FCRA allows you to seek legal recourse to correct your credit information by suing the creditor that provided the incorrect information to the credit bureaus and verified it as accurate.

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What Happens if Someone Has a Judgment Against Me?

If you ever find yourself in financial trouble, you may be contacted by debt collection agencies to try to recover the funds you owe. If you do not pay them, they can eventually take you to court to have the court order you to pay them. If the court rules in a creditor's favor, the creditor is then allowed to pursue your money with new methods. These methods help ensure that they get the money that you owe them.

Wage Garnishment

A wage garnishment is a common method used by creditors to recover funds that you owe them once a court order is in place. The creditor requests a garnishment order from the judge and the judge writes up the order. The court submits the garnishment order to your employer who will then take a specified amount of money out of each of your paychecks until the debt is paid. The order cannot garnish more than 25 percent of your gross income.

Bank Account Levy

Creditors are also given the power to initiate a bank account levy if the judgment goes in their favor. With this method, your bank account is essentially frozen. You will not be able to make any withdrawals from your account. You will not receive any notice before this levy is put on your bank account, which can result in checks that you have written bouncing. A bank levy is a one-time action that will remove all of the money that is in your account at the time of the levy to pay toward your debt.

Lien

If you do not have assets or income that can be withheld, your creditor can put a lien on any property that you have, including your home. This means it will be more difficult for you to sell your home. The lien assures your creditor that the debt will be paid off at some point in the future. If the property is sold, foreclosed on or refinanced, your creditors will get their share of the profits off the top. Once you have successfully paid your debt, the lien will be removed.

Property Repossession

If there is any secured property associated with the debt that you have, the creditor can ask to be allowed to seize that property and resell it. The profits from that sale would then go toward your debt so the creditors are assured of getting at least part of what they are owed. In some cases where the amount is high and you have equity in your home, a creditor can request that your home be sold to pay for the debt.

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What Does Credit Card Charge Off Mean?

If a credit card company determines that your account balance cannot be collected, they will charge it off of their account receivables listing. Many accounts are forwarded to a collection agency for further collection activity at this point.

Types

When a credit card company charges off an account, it means they are reporting it as a loss for their accounting records. A charged-off account is the same as a bad debt or uncollectible account.

Effects

Accounts are charged off when a customer has not made a payment in 180 days. This information is reported on a credit file for seven years. Charged-off accounts can lower your credit score significantly.

Timeframe

If a charged-off account is reported on your credit file for a period longer than seven years, you may want to submit a written dispute with the credit reporting agency. They will investigate and have the information removed within 30 days.

Credit Rating

Charged-off accounts will show up on a credit file as an I-9 or R-9. The I stands for installment and the R stands for revolving account.

Significance

A credit card company will report a charged-off account to the IRS for tax purposes.

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Consolidation Loans With Poor Credit History

Debt consolidation loans allow you to pay off some of your current debts and make a single payment to your new lender. These loans can be helpful in some situations, but if you already have bad credit you may not be able to get a new consolidation loan or obtain good terms on the loan offers you do receive.

Consolidation Loans

A consolidation loan is very much like any other kind of loan, in that you have to apply to a lender for the loan and then go through the approval process. Lenders determine the criteria individual borrowers need to get a loan, and typically use a combination of factors, such as your income level, income-to-debt ratio and your credit score.

Credit Scores

Your credit score is an important part of your ability to obtain new loans, though each lender determines what credit score you need before you're eligible to receive a loan. One commonly used score, the Fair Isaac's Company score or FICO score, ranges from 350 to 800 according to the Federal Citizen's Information Center. A score of 700 or higher is generally considered a good score, while anyone with a score below 600 is considered a risky borrower.

Terms

Even if you do get a consolidation loan with bad credit, your loan terms are likely to be much worse than those offered to a person with good credit. For example, according to Bankrate, the best balance transfer credit cards on March 16, 2011 offered regular interest rates of from as low as 10.9 percent to as high as 22.99 percent. Applicants with a bad credit score would likely receive a higher rate than those with a good score.

Other Options

If you already have a poor credit score, you've likely had several credit problems, such as not paying your bills on time or going through a bankruptcy. If you are unable to manage your credit responsibly, taking out a consolidation loan is usually not a good option. Consolidation loans do nothing to lower your debt load, and can even increase how much you owe in the long run. Talk to a financial adviser if you need assistance with a debt payment strategy before committing to a consolidation loan.

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How Does a Passbook Loan Work?

Definition

A passbook loan is a loan that is collateralized with your savings account. Dissimilar to a standard credit account, a passbook account is a loan that--usually at a lower interest rate--borrows your own money as a safer risk for the bank. Usually these accounts are only offered through community credit unions and local banks. Despite the security, this is not the best way to build credit--nine times out of 10 these accounts are not reported to the three major credit bureaus. It is, however, a safe way to borrow money without the potential danger of negatively affecting your credit score.

Process

The first step in acquiring a passbook loan is to be an established banking customer at your local bank or credit union. This means having both a savings and checking account open in good order. Some banks will lend up to 100 percent of the balance in your savings account, some cap the loan amount at 50 percent. Check with your local bank for restrictions. Often these loans are easily processed with a simple application and no credit check. The usual risk associated with lending is mitigated because the collateral is your own savings account. Often the bank will charge between 2 percent and 3 percent over the amount you are earning on the account. You will still continue to earn interest on the money in your savings, but the bank will earn profit on the interest charged on the loan. Also, the funds being used as collateral are frozen--the bank wants to secure its collateral.

Uses

There can be various reasons to resort to a passbook loan. Some customers take advantage of these since they are easily acquired and often have lower interest rates than unsecured personal loans. Some customers enjoy doing business with community lenders. Also, customers with poor credit use these loans to access cash and build a lending relationship by demonstrating to a bank that they are a good risk while they work to reestablish their credit independent from the passbook loan. The loan that is most similar to a passbook loan is one taken against a 401(k) where employees borrow percentages of their retirement for home purchases and other investments.

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Credit Card Terms & Conditions

Most consumers that apply for credit cards seem to ignore or skim through the credit card terms and conditions. Every product comes with an instruction manual or a booklet that contains vital information that must be read and performed. You would not cook a tuna casserole without reading the instructions on how to properly prepare it for serving. Understanding the terms and conditions will prevent you from further credit issues such as credit card debt.

Cardholder Agreement: Terms & Conditions

The Cardholder Agreement is a binding contract between the credit issuer and the consumer and once you sign this document, you are also accepting the terms and conditions within the agreement. The credit issuer does not care if you do not understand the cardholder agreement, you are legally responsible for everything that is in the "fine print." Consumers always need to read the fine print before signing any legal documents.

Protecting your Credit Against Credit Card Solicitation

Credit card companies send millions of Americans credit card solicitations in the mail every month. To protect consumers from this type of solicitation, a law was passed in March of 2004 that includes a special section called the "Schumer Box." The Schumer Box is an abbreviated list that includes items from the credit card terms and conditions. The Schumer Box is included on all credit card offers, but the cardholder agreement thoroughly explains the terms and conditions in greater detail.

Information on the Credit Card Terms and Conditions

Every Cardholder Agreement has a section for interest rates and interest charges and a section for fees. The "interest rates and interest charges" section includes the annual percentage rate (APR) for credit card purchases, transfers, overdraft protection advances and cash advances. This section also covers how to avoid paying interest on certain purchases and the credit cards specific penalty APR.

The "fees" section of the Cardholder Agreement discusses specific fees such as the credit card's annual, transaction and penalty fees.

Warnings and Advice

The terms and conditions of your credit card can change at anytime without notice. Consumers rarely pay attention to introductory rates of a credit card offer. The "introductory rate" is only there to attract new customers from credit issuers and the annual percentage rate of the credit card will change over an extended period of time once this rate expires. Credit offers are frequently sent out to potential customers, but this does not mean that you will be approved for that offer.

Know the Credit Card Language

Read everything the creditor issues to you. Having knowledge of the credit card terms and conditions can prevent you from getting into credit card debt. Credit is used for everything; you cannot buy a house, a vehicle or even high-speed Internet without credit. Having a high credit score means that you are very responsible and trustworthy. Employers and creditors look for potential employees and customers that have strong character traits. Credit reflects your character so it is important to improve it.

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Can a Person Be Sued by Multiple Credit Card Companies?

Some people with extreme financial problems find themselves fending off multiple credit card lawsuits from different card companies. There simply are no provisions for combining the accounts or preventing several companies from filing separate lawsuits. Each lawsuit is potentially devastating, as each could lead to a court judgment and bank garnishment. A person facing multiple credit card lawsuits should immediately seek help from a bankruptcy attorney.

Considerations

Illinois Legal Aid reports that people facing credit card lawsuits have no chance to win in court if the attorney for each credit card company proves that the debt is valid and payment was not made. Some people fail to even show up for their court date. That leads to an automatic victory for the card company, with bank garnishment possibly next.

Frozen Accounts

Bank garnishment orders are signed by a judge and allow the debt collector to withdraw money electronically. The money is used to satisfy a money judgment requiring debtors to pay the full amount owed for the credit card debt. The garnishment order freezes checking accounts while the debt collector takes money in a lump sum or in installments. Meanwhile, debtors are not allowed to access the accounts except to make deposits. Checks written will bounce, and attempts to use debit cards will be declined.

Bankruptcy

Multiple credit card lawsuits, money judgments and bank garnishment often lead to bankruptcy. Bankruptcy features a powerful provision called "the automatic stay." The stay is a legal injunction signed by a judge. It stops bank garnishment immediately, forcing frozen accounts open while preventing debt collectors from withdrawing more money. The automatic stay is so effective that it is a primary reason some people file for bankruptcy.

Advice

Bankruptcy attorneys usually offer free consultations, and someone with multiple lawsuits should consult with several attorneys to get a wide range of views on the situation. The Federal Trade Commission recommends avoiding bankruptcy if possible, but sometimes there isn't a better option when multiple lawsuits are underway.

Types of Bankruptcy

Chapter 7 bankruptcy is the simplest form of personal bankruptcy and eliminates credit card and other unsecured debt in a few months. Chapter 7 is usually available only to people with low incomes. Others qualify for Chapter 13, which reorganizes debts through a payment plan lasting three to five years. Both forms of bankruptcy feature the automatic stay.

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Which Should I Pay First: Credit Cards or Medical Bills?

If you don't have enough money each month to meet your obligations and you are falling behind on your debts, you need a plan to work your way out. It's wise to make a schedule of your debts and decide which are most important to pay first. While it should be obvious that your rent or mortgage and your essential utilities take precedence, it can be harder to decide when it comes to other types of debt.

Unsecured Debts

Credit card balances and medical bills are both what's known as unsecured debts. In other words, you did not borrow against any asset such as a house, and your creditor has nothing it can repossess in lieu of the debt. While in this way they are similar, there are some differences in how you should deal with credit card and medical debts.

Be Proactive

If you're facing significant unsecured debts, never simply ignore them. With medical debt especially, it important to pay attention and be proactive in dealing with it. Check every bill you receive for errors or overcharging. If you have insurance, call your insurer to question why portions of the bill were not covered. In both these ways you may be able to reduce your personal liability. If you can possibly avoid it, do not pay for medical expenses on a credit card, as this will make it harder for you to claim them as a tax deduction if you qualify. With credit cards, while you make your debt plan, ensure you're paying at least the minimum to avoid accruing fees and delinquency notices on top of credit charges.

Interest

Check the interest that's being charged on both your credit card balances and your unpaid medical bills. Unless your medical bills are already in collection, you will likely find that the credit card interest is much steeper, and the amount you owe each month is mounting up more quickly. This may give your credit card balance priority as you're deciding how to pay off your bills.

Negotiation

If you are in difficulties paying a medical bill, it's often straightforward to find a human being to talk to in the medical office's billing department. Explain your situation to her and ask if you can negotiate a payment plan to pay at least some portion of the bill each month until it's paid off. Most medical institutions are open to this type of approach. Credit card companies do not have the same kind of flexibility.

Credit Implications

Credit card balances are automatically recorded on your credit report and will affect your score. Unpaid medical bills are unlikely to register on your report unless they are turned over to a collections agency, something that might happen at around 180 days delinquency. Again, if you have called the medical office to explain your situation and have set up an acceptable payment plan, you should be able to request that the bill is not sent to collection and does not impact your credit score. This factor also makes credit card balances more urgent.

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Will a Secured Credit Card Help Me Build a Credit History?

Secured credit cards such as MasterCard or Visa are excellent for building credit. The key is making sure the credit card company reports credit information to all three major credit bureaus---Equifax, TransUnion and Experian. Virtually all full-featured bank credit cards report to the agencies, but you should confirm this before investing in a secured card.

Customer Service

Contact customer service departments for several secured credit cards before opening an account. Or contact the banks directly. Ask all of the companies if they report to the major credit bureaus, and also ask about annual fees, interest rates and provisions for upgrading the card to unsecured status. Choose the secured card that suits you best based on your research. Also confirm that the card you are applying for us a full-featured bank credit card---and not a prepaid credit card. The prepaid cards are really debit cards and cannot help you build a credit history.

Savings Deposit

Secured cards require a deposit into a savings account with the money held as collateral. The amount on deposit becomes your security line, and you are not allowed to withdraw the money while the account is open. That changes if the account is upgraded to unsecured status after you establish a good payment history.

No Difference

Secured credit cards are used the same as other credit cards and no one will know that the card is secured. Your usage of the card is reported to the credit bureaus each month, making it extremely important that you never miss a payment. People with secured cards are usually trying to improve their credit scores, and consistently paying on time while keeping balances low helps.

Multiple Accounts

Open more than one secured account to build your credit even faster. Make sure the card reports to the major credit bureaus and keep balances low. After 12 to 24 months of responsible use, you may qualify for other unsecured bank cards.

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What Does a Line of Credit Mean?

When a person borrows money from another party, the money that is borrowed is considered a loan. Generally, loans are issued at a particular rate of interest that the borrower must pay back with the principal. However, when a lender extends a borrower the option, but not the obligation, to borrow a certain amount of money at a set rate of interest, this is known as a line of credit.

Features

Lines of credit are generally offered by financial institutions, such as credit card companies and banks. In some cases, the line of credit will be offered at a fixed rate of interest, meaning that the amount of interest the person pays on the loan will stay consistent with time. Other lines of credit are offered at floating rates of interest, meaning the amount of interest the borrower pays will vary with the prevailing rate of interest.

Types

Some lines of credit are backed with a form of collateral. For example, many homeowners will take out lines of credit using a portion of the house as collateral: these are known as home equity credit lines. However, some lines of credit are unsecured. For example, the amount that a person is allowed to charge on their credit card is considered a line of credit.

Loans Versus Lines of Credit

Lines of credit differ from loans in several ways. First, while loans are issued to a borrower in the form of a single lump sum, withdrawals taken from a line of credit may be taken in a number of installments, such as through charges on a credit card. Also, according to Creditor Web, a line of credit application is generally simpler, taking only a few days, as opposed to a few weeks with a loan.

Advantages

The chief advantage of a line of credit over a loan is that it allows the person to take out only what he needs to borrow, when he needs to borrow it. With loan, a borrower may often be obligated to take out a larger amount than he actually needs, such as on certain mortgages. Also, lines of credit backed with collateral can help borrowers keep their debt manageable by placing limits on the loan they take out.

Requirements

The requirements for receiving a line of credit are also identical to those needed to receive a loan. In both cases, a person's credit history is considered, as is their current ability to pay back the money being offered. In both cases, the lender may consider the person's credit report, as well as documents indicating their current financial position.

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How to Finance Vehicle Payments After Bankruptcy

Filing bankruptcy can damage a person's self esteem as well as his credit history, but there is an upside. When the discharge is complete, you have a devastated credit score, but you have no debt either. Provided you are working and receive reasonable income, there are lenders who feel that the risks your bankruptcy filing and resulting low credit score present are acceptable given that a new loan will be your only debt obligation. That makes buying a car following a bankruptcy discharge not only possible, but relatively easy.

Instructions

Instructions

1

Be very upfront about your situation to potential lenders or auto dealerships. Try cold calling dealers in your area and asking them if they have a financing program or division that deals with bankruptcy customers. Always get a firm "yes" or "no" before you allow anyone to inquire about your credit.

2

Begin searching for the right car loan in as little as three or four months after your discharge. It may take some time to find just the right loan, so begin early and let the process happen.

3

Be prepared to pay a very high interest rate. High-risk customers get high rates initially, but often are given the option to refinance after a certain period of time. Your credit score should be continually improving, so refinancing that high-interest loan after a couple years of on-time payments could save you as many as 10 points of interest.

4

Join a credit union. Research the available options in your state and find a credit union in which you qualify for membership. This can save you several points right at the start, and credit unions are often more flexible with their loan terms and approvals.

5

Find the right car. Zipping around in the latest convertible might feel good for a while, but it's that kind of decision that likely contributed to the bankruptcy filing. Keep an eye out for cars that would carry a payment of around 15 percent of your monthly gross income, and you're more likely to get approved.

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What to Do After Credit Card Balances Have Been Turned Over to Collection?

If you have credit card bills that are more than 180 days past due, chances are they will be turned over to a collection agency. In some cases, collection agencies are part of the credit card company. In other cases, the collection agencies will have purchased your debt from the credit card company or will earn a percentage of the balance that it collects.

Send a Cease and Desist Letter

One tactic when your credit card balance is turned over to collections is to send the collection agency a cease and desist letter. This will not stop the collection process or remove the balance from collections, but it will prevent them from contacting you about the balance. That means you will not have to deal with annoying phone calls.

Negotiate the Balance

Another option is to negotiate the balance with the collection agency. You can offer to pay them much less than the full balance and they might accept your offer. There are several ways to achieve this. The first is to simply refuse to pay the balance. After several weeks of refusal, the collection agency might be more willing to negotiate. Chances are, they will not negotiate with you in the first few weeks. You can also offer the agency a substantially lesser amount, such as 20 percent of the balance due, and then slowly meet the agency's offer half way. Many collection agencies will accept payments of half the balance, however some have strict policies about how low they are willing to go.

Make a Reasonable Offer

Another negotiation tactic is to make a reasonable offer right off the bat. If the collection agent senses that you are serious and you make it clear that you are never going to pay full price to clear the debt regardless of what it does to your credit, the agent might accept your offer. You can offer to pay 75 percent of the balance due, if you can afford it. The collection agent might accept and spare you the harassing phone calls. This approach is also one of the best ways to protect your credit.

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Can My Pay Be Garnished by Any Company While I Am in Bankruptcy?

Bankruptcy provides protection against garnishment, making it impossible for traditional creditors like credit card companies to garnish your bank account or wages. However, there is one notable exception. A company managing a pension fund could garnish your wages, if you failed to repay a loan payment for the pension.

Identification

Bank or wage garnishment allows debt collectors to take money from a debtor's bank account or paycheck. The debt collector must first file a lawsuit in civil court to obtain a judgment. After that, the debt collector can request garnishment of the debtor's bank account or wages. Banks comply by freezing the debtor's bank account and giving only the debt collector the right to withdraw money from it. Employers must immediately begin sending a percentage of the debtor's wages to the debt collector each payday.

Solution

Many apply for bankruptcy because of garnishment. Once a debtor files bankruptcy, the court will order an end to all active garnishments and prohibit future garnishment while the bankruptcy is in effect. A company managing a pension fund could file a legal motion to allow garnishment despite the bankruptcy. Overall, bankruptcy stops virtually all garnishment activity resulting from monetary judgments awarded in court. Examples of monetary judgments include credit card judgments and judgments stemming from defaults on promissory notes, automobile loans, installment loans and home mortgages.

The Automatic Stay

All forms of individual bankruptcy feature a provision called "the automatic stay." The automatic stay, or simply the stay, is a legal order that serves as one of the most powerful elements of bankruptcy. Once signed by a judge, the stay ends all garnishments and prevents future garnishment while bankruptcy court takes complete control over the debtor's finances. Emergency bankruptcy filings are possible in one business day, providing quick relief for people facing garnishment.

Alternatives

If you're worried worried about possible garnishments, you should work out payment plans or settlements with debt collectors. Payment plans usually allow the debtor to pay the full amount in monthly payments. Settlement allows for the debtor to pay less than the full balance, often in a lump sum. The debt collector agrees not to pursue court action in both agreements .

Warning

People who choose bankruptcy must follow the terms of their bankruptcy agreement. Otherwise, the judge can dismiss the bankruptcy. Dismissal of a bankruptcy ends the automatic stay and allows resumption of all previous bank or wage garnishment.

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