Welcome to our website credit and debt managementr.

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

Thursday, February 28, 2013

When Should I Not Use My Debit Card?

When Should I Not Use My Debit Card?

People who want the convenience of using a credit card but don't want to run the risk of getting into debt may turn to debit cards instead. Debit cards closely resemble credit cards, but they are typically tied to a bank checking account, meaning the necessary funds to cover a purchase must already be in the account. Despite their ease of use and debt-avoiding advantages, debit cards may not be the best choice in some situations.

Shopping Online

    While e-commerce websites will often gladly accept your debit card when you buy merchandise, using your debit card does pose risk. Because your debit card is tied to your checking account, you could fall victim to an identity theft or hacker who could drain the account if he gets your card number. Many banks offer liability protection, but it can still pose quite a problem until you are able to resolve the situation and you may not be able to use the card in the meantime.

Automatic Drafts

    Many businesses allow you to pay your monthly bill by setting up your debit card to make an automatic withdrawal. If you forget to put the money into your checking account in time, you could incur an overdraft charge. If you pay several bills in this manner, it can be difficult to track all your purchases. If a billing error occurs resulting in an extra payment taken out of your checking account, you also could be vulnerable to an overdraft. A credit card may be a better option for automatic withdrawal situations.

Expensive Items

    When purchasing expensive products like electronic equipment or household appliances, debit cards often do not provide the same protection as credit cards. If the merchandise is defective, you may not have the same dispute rights that are typically offered by credit card companies. Some credit cards also come with automatic extended warranties for all purchases. Large purchases can take a big bite out of your checking account if you are required to pay the full price upfront.

Establishing Credit

    Debit cards are not helpful if you are trying to establish a credit history. If you're young and using credit for the first time or recovering from a serious financial setback like bankruptcy, debit card use is not reported to the three major credit bureaus, so it won't boost your score. Responsible use of a credit card is a good way to establish a favorable credit history. If you have difficulty obtaining an unsecured credit card due to past problems, a secured credit card, which requires you to put up cash to serve as collateral, can get help get you on the right track.

Wednesday, February 27, 2013

Who Qualifies for Debt Management?

The term "debt management" refers to the counseling and advice that a person in debt may receive from a financial professional, such as a debt counselor or a financial adviser. Anyone is legally entitled to debt management. However, only certain people qualify for low-cost credit counseling, just as only some people can afford financial advisers. In addition, only some people may qualify for hardship programs from creditors that may reduce the size of their debt.

Credit Counseling

    There are a number of firms that offer credit counseling. Some credit counseling firms are run as a business, while others are run as a nonprofit concern. Both business counseling firms and nonprofits may choose to charge clients a fee for services. However, some nonprofit companies will offer services to clients free of charge if they are low income. The income requirement will vary depending on the organization offering the services.

Financial Advisers

    Many people, in lieu of credit counseling, will attempt to manage their debt by consulting with financial advisers. These financial advisers can look at a person's financial situation, including his debts, assets and income, and help determine the solutions open to the person for reducing his debt load and meeting his financial obligations. However, few financial advisers come free. Many will charge by the session or charge a retainer fee.

Debt Settlement Firms

    Some debt settlement firms offer both legal advice to clients and aid them in settling with their creditors. These debt settlement companies charge different fees depending on the services they offer and the company's policies. While some will charge a flat rate, others will charge a commission based on the total amount of the person's debt or the amount of money that the settlement firm is able to save him on debt payments.

Hardship Programs

    Many creditors, such as credit card companies, have hardship programs in which they offer special terms to people who are deeply in debt and are not able to pay off the debts they have incurred. These programs will help the person manage his debt by restructuring it or by allowing the person to settle for partial payment. The only way for a person to determine if he qualifies for a hardship program is to ask his creditor.

Will Creditors Attach Your Wages?

If you don't pay your creditor, it may seek an alternate debt recovery method known as "wage garnishment." Through wage garnishment, the creditor asks a court for permission to seize a portion of your wages from your employer before you receive your paycheck. Not all creditors can attach your wages and, of those that can, not all will put forth the effort required to do so.

State Restrictions

    Your state of residence plays a role in determining whether an unpaid creditor can attach your wages. Some states, such as Pennsylvania, grant wage garnishment orders only to certain creditors while other states prohibit wage garnishment in its entirety. Your state code contains detailed information regarding garnishment laws in your state.

Filing a Lawsuit

    Unless your creditor is the federal government, it must win a lawsuit against you before it can attach your wages. Lawsuits require time and effort on the part of the creditor -- even more so if you have a reasonable defense and notify the creditor that you plan to appear in court and contest the lawsuit. Because of the additional effort required to sue you, many creditors will not bother filing a lawsuit for debts less than $1,000. By opting not to file a lawsuit, a creditor forfeits its ability to garnish your wages.

Pre-existing Garnishments

    A garnishment order typically instructs your employer to withhold the maximum amount permitted under the law. While this provides the creditor with a viable collection method, it restricts other creditors' ability to recover payment through wage garnishment. Subsequent creditors can issue a wage attachment but cannot actively garnish your wages until the initial garnishment order either expires or has been satisfied.

Employment Location

    If you change employers while subject to a garnishment order, your creditor must track down your new employer, request another garnishment order from the court and serve it upon your employer. While some creditors will obtain subsequent garnishment orders each time your employer changes, others will not put forth the effort to locate and serve your new employer.

    Creditors typically have difficulties garnishing wages from self-employed individuals because the self-employed do not often pay themselves a traditional salary. If you are self-employed, your creditor will likely pursue an alternate form of garnishment rather than attempting to attach your wages.

Wages Vs. Income

    You only receive wages if your income is derived from work you perform. Income, however, can come from a variety of sources and certain forms of income are protected from garnishment under federal law. Social Security, unemployment, public assistance, retirement pensions and child support are all exempt from seizure by most creditors.

    The government enjoys attachment rights that private creditors, such as credit card companies, do not. If you owe a defaulted student loan, back taxes or another type of government debt, the government will attach your exempt income in addition to garnishing your wages.

Tuesday, February 26, 2013

How to Inform Credit Card Companies of the Death of a Spouse Who Was the Major Income Earner

How to Inform Credit Card Companies of the Death of a Spouse Who Was the Major Income Earner

Dealing with the emotional crisis of a spouse's death is difficult enough, especially if your spouse was the breadwinner for the family. Paying for the funeral, burial and other costs can be a financial hardship, even if your spouse made prior financial arrangements to offset the costs before death. Unfortunately, your spouse's debts must still be paid with any remaining money left over from the estate, which includes credit card debt. Informing the credit card company of an account holder's death could reduce the number of calls received during your time of grief and allow you to make settlement arrangements.

Instructions

    1

    Take care of important business first, such as funeral and burial arrangements and notification of friends, family, employers and the Social Security office, if your spouse was receiving Social Security benefits.

    2

    Assess your spouse's estate. This may require the assistance of an estate lawyer and an accountant, especially if your spouse handled the finances without your help. An accountant can help you figure out your spouse's assets and debts, so you can set up an actionable plan to repay as much of the debt as possible with the remaining estate assets after the funeral.

    3

    Write a formal letter to all credit card companies your spouse held a balance with, informing them that your spouse is deceased.

    4

    Notify the card companies in your letter that you are in the process of settling your spouse's estate and that your spouse was the major income earner in the household, if that was the case. Do not include details about your spouse's assets until you have an accurate picture of the estate, as this could prompt the companies to continue making demanding calls about debt settlement.

    5

    Assure the credit card companies that you will contact them with more details to make settlement arrangements once you have an accurate picture of the estate and your spouse's overall debt.

    6

    Inform the card companies immediately of the estate settlement once the assessment is finished. If there are no remaining assets to settle credit card debt once important financial obligations the deceased had are met, the debt becomes insolvent, and the credit card company will have to write off the debt. The credit card company cannot request that you take over the debt for your spouse unless you were a joint account holder on the credit card before your spouse's death.

Monday, February 25, 2013

What Is Better to Pay Off: A Credit Card or a Loan?

If you have debt, whether it's a loan or a credit card balance, the most important thing to do is to make the minimum monthly payment. Missing a payment will hurt your credit score and may cause the interest you pay on your debt to rocket. Once you've made the minimum payments, concentrate on paying the high-interest debt. In most cases, credit cards have a higher interest than loans, but not always. Pay whichever debt is more expensive first.

Types of Debt

    Credit cards are a type of unsecured revolving debt. Loans can be either secured or unsecured. With a secured debt, you have to put up a house, or another high-value item, as collateral to guarantee that you will pay back the lender. If you miss payments, the lender can take the collateral and sell it to settle your debt. With unsecured debt, the lender cannot take your house. The most they can do is get a court order to put a lien on your house or to garnish your wages. Secured debts are a safer bet for lenders and, therefore, have lower interest rates. However, they pose a much greater risk to the borrower.

Paying Off Debt

    Once you've made the minimum monthly payments on all of your debts, concentrate on paying off the most expensive debt. This is probably the credit card, but can also be a loan. If you've put up your house to get the loan, pay that off first. You don't want to risk becoming homeless. Do not cancel all your credit cards as soon as you've cleared the balances. Having a longer credit history will help your credit score. Just stick the card in a drawer and don't use it.

When Not to Pay Off Debt

    There are times when paying off a debt in full is not the best idea. If you have a zero-interest credit card, make the minimum payment, then carry the rest of the balance until that offer expires. Put the money you would have used to settle the debt into a high-interest savings account. Pay off the card as soon as it starts accruing interest. Similarly, if you have a choice between investing in a matched pension fund and paying off a low-interest debt, you may want to do the former. You can always pay the debt later, but you won't always have a chance to have your 401k contribution matched by your employer.

Budgeting

    Whether you're paying off loans or credit card debts, you will need to budget. Creating a budget is easy; sticking to it is not. Make a list of all of your earnings, minus taxes. Then make a list of all of your expenses, including mortgage or rent, car payments, utilities, gas, food and clothing. The only way to save money and pay off debts is to spend less than what you earn.

Under Oregon Law, What's the Least Amount of Money That Has to Be Paid to Any Creditor?

Under Oregon Law, What's the Least Amount of Money That Has to Be Paid to Any Creditor?

In Oregon, debtors are expected to pay creditors the amount agreed upon in a verbal or written contract. Consumers with credit card debt agree to pay the credit card company a minimum amount every month, which is outlined in the contract the debtor signed with the credit card company. Although debtors can negotiate with creditors to lower minimum payments, creditors are not required by law to accept less.

Overview

    The Oregon Fair Debt Collection Practices Act governs the collection of debt and prescribes specific ways creditors can --- and cannot --- go about collecting debt. What the Oregon Fair Debt Collection Practices Act does not do, however, is require a creditor to accept less than the minimum amount due. In Oregon, the least amount that has to be paid to any creditor is the same amount the debtor agreed to pay in the contract. If a debtor decides to pay less than what was agreed upon, the debtor does not have to accept it. The debtor can turn the account over to a collection agency or seek a judgment against the debtor.

Debt Collection Practices

    Oregon law prescribes how debtor's can collect debt. For example, debt collection agencies cannot call a debtor's home before 8:00 a.m. or after 9:00 p.m. Creditors cannot use threatening language and are only allowed to contact a debtor at work if they cannot contact a debtor at home. Additionally, creditors cannot attempt to contact debtors at work more than once a week.

Statute of Limitations

    In Oregon, if debt goes "stale," or a certain amount of time has passed regarding debt, it is illegal for creditors to attempt to collect on the debt. For credit card debt, the statute of limitations is six years. This means, that if a debtor has not paid any part of a credit card balance for six years, the credit card company can no longer attempt to collect the debt. The six-year statute of limitations applies to debt relating to a contract as well.

Wage Garnishment

    In Oregon, creditors can collect debt by obtaining a writ of garnishment. If a creditor obtains a garnishment judgment, that creditor can collect upwards of 25 percent of a creditor's "disposable income" per paycheck. Pursuant to Oregon wage garnishment law, there is no minimum amount a creditor can garnish, however, the maximum amount is 25 percent of the debtor's disposable earnings per paycheck.

Can Collection Agencies Check Your Bank Account?

Can Collection Agencies Check Your Bank Account?

Although collection agencies can't simply look at your bank account any time they want, some circumstances do allow them to access your account. If you have given them permission to withdraw payments in the past, they have a way to access your funds. And if they file a lawsuit against you and win a judgment, they can take funds directly from your bank account provided they have your account information.

Ongoing Payments

    Debt collectors can attempt to take money from your account if you have previously given them access to your bank information. In other words, if you have ever paid them with a debit card, or by giving them access to your checking or savings account, they may continue to take funds from that account. If this has happened, speak to your bank to find out how to block the collection agency from your account.

Judgments

    Simply doing business as a collection agency does not give debt collectors the right to look at or access your bank account. They must have a legal judgment in order to garnish your funds; without a judgment, your bank won't allow them to take your money. Debt collectors can only get a judgment if they sue you in court and win; they can't simply state that you owe a debt, or that they are entitled to check your account balance or access your funds.

Exempt Funds

    Even if a collection agency wins a judgment against you, some types of funds remain exempt from seizure. For instance, your bank is normally not allowed to release funds that come from Federal programs like Social Security. However, this exemption does not apply to government-related debts; if you default on a student loan, or owe child support payments, funds that are otherwise exempt can be confiscated.

Protecting your Accounts

    Financial expert Dave Ramsey advises debtors to avoid providing collection agencies with debit card or bank account information. Even if you think you have reached a fair repayment schedule with the collection agency, it may use this information to access your account and collect as much of the debt as it can get.

How to Activate My AccountNow Balances

How to Activate My AccountNow Balances

AccountNow is a prepaid credit card account. A prepaid credit card works like a credit card with the exception that your credit limit is chosen by you; you prepay your credit limit. For example, if you want a $2,000 credit limit, you have to put $2,000 of your own funds onto the card before you can use it. Once you start using the card to make purchases, your credit limit decreases until you add more funds to the card. If you want to activate your AccountNow balance, you have to register your card online.

Instructions

    1

    Visit the AccountNow website at my.accountnow.com to register your card for activation. Click on the "Activate Card" link on the homepage.

    2

    Enter the 16-digit card number on your AccountNow prepaid credit card.

    3

    Enter the card number a second time for security purposes.

    4

    Click "Submit."

    5

    Provide your personal information, such as your name, address and contact information.

    6

    Create a username and password so you can log into your account anytime and access your account. Via this page, you can add funds to your card, see your balance and manage your purchase history.

Sunday, February 24, 2013

Tax Issues Regarding Credit Card Settlements

If you have missed payments on a credit card debt, or you anticipate a financial change that will prevent you from making your credit card payments on time, you may consider negotiating a settlement with your lender. A settlement is an agreement between you and the creditor in which you pay a portion of the debt, typically in a lump sum, in exchange for the creditor considering the debt paid in full. However, you should be aware of tax issues regarding credit card settlements.

Taxes on Settlements

    When you settle a credit card debt with your lender, you may be subject to federal taxes on the forgiven portion of your debt. The Internal Revenue Service considers forgiven debt to be earned income, and it requires you to pay taxes on canceled debt of $600 or more. However, you do not have to pay taxes on the settlement if the forgiven amount is less than $600.

Tax Rate

    Because debt forgiven under a settlement agreement is considered earned income, it is taxed at the standard tax rate for your income bracket. Before you agree to a settlement, you should consider the tax bracket into which you taxable income falls. If your income puts you near the top of your income bracket, earned income from debt forgiveness may place you in a higher bracket. This means that you will pay a higher tax rate on any income that exceeds that tax bracket theshold. For example, if your income places you $2,000 below the limit for a tax bracket, and you negotiate a settlement that forgives $5,000 of debt, $3,000 will be taxed at the next higher tax rate.

Settlement Tax Exemption

    The IRS provides an exemption from taxation on forgiven debt under limited circumstances. If you are insolvent -- that is, the total amount of your debts exceed the total value of your assets -- you may be exempt from paying taxes on the portion of a credit card balance forgiven under a settlement agreement. However, you must complete and file IRS form 982 with your tax return if you seek this exemption.

Considerations

    Although you may be subject to taxation on forgiven credit card debt as part of a settlement agreement, the additional tax liability typically is more than offset by the financial benefits you receive from the settlement. A settlement can free part of your income to apply to other credit card or loan balances, allowing you to pay down your debt more quickly. If you are behind on your debt payments, a settlement may help you avoid bankruptcy, lawsuits, wage and bank garnishments and property liens.

What Is Providian on a Credit Report?

What Is Providian on a Credit Report?

Providian Financial was a credit card company that existed until it was bought out by Washington Mutual in 2005. The credit card issuer was one of the largest in the country with more than 9.4 million customers. If you had a Providian Financial credit card, the account information might still appear on your credit report.

Credit Report

    Your credit report contains a history of your past uses of credit. Whenever you apply for a credit card, pay a credit card bill or get a new loan, the information goes on you credit report. There are three companies that maintain these reports: Experian, TransUnion and Equifax. Each reports the same basic information, such as the name of a creditor, your history of payments and other issues, but in different formats.

Report Details

    Your credit report details your past and current credit accounts in sections known as "trade lines." Each trade line contains information about a specific line of credit. If you had a credit card from Providian Financial, the word "Providian" might appear on the trade line associated with this account. This simply identifies the creditor and doesn't itself affect your credit score.

Providian

    Credit report information generally stays on your report for seven years, though a bankruptcy can stay for as long as 10 years, according to the Federal Trade Commission. Because Providian was sold in 2005, the Providian entries should generally no longer appear on your report after 2012. If the entries continue to appear after this time, contact the credit reporting agency upon whose report the entry appear and ask them to remove the entry.

Warning

    While Providian no longer exists as a separate credit card company, the use of the Providian name appears to be a part of various scams involving credit card users. For example, according to the law office of Thomas Green, one scam involves an email sent to card users claiming to be from Washington Mutual Bank. The scam email redirects the recipient to an official-looking website that asks for personal information. There also appear to be scams involving letters from "Providian Bank" or other such companies claiming the consumer owes money. If you are the subject of such attempts, you should never provide your personal information or credit card number. Keep a record of all communications, and contact your state attorney general's office if you believe you are the victim of an attempted scam.

What to Expect From Debt Management

Debt management programs have grown in popularity as more and more Americans find themselves in insurmountable levels of debt. While these programs would like you to believe being on the program means your debt problems will magically disappear, the reality is quite different. Some adjustment is virtually required in order to satisfy the terms of your program.

Debt Management Basics

    A debt management program is a tool used by credit counselors to create a personalized budget that can get you out of debt within five years. Debt management programs involve lowering your interest rates to manageable levels that will help you to pay down your balances. By the time your program is over, you'll have a nice history of on-time payments and will be able to re-enter the world of using credit.

Joining the Program

    Joining a debt management program is almost always preceded by a meeting with a credit counselor, who will work with you to find the best solution to your financial dilemma. If the debt management program is the way to go, the counselor will send proposals to your creditors detailing your desired interest rate and monthly payment. During this phase, which lasts about a month, you are responsible for paying the credit counselor as well as your various creditors. Once your proposals are accepted, you only have to pay the counseling agency, which will then pay your credit card bills each month on your behalf.

Surviving the Program

    The initial phase of the program is the hardest for many people, as it essentially requires you to make double payments. However, the main part of the program is difficult as well. Since you can no longer use your credit cards, nor can you apply for any additional credit, you must learn how to live without credit. This can be a huge adjustment that may lead to massive changes in your budget and personal life. These changes may include bringing lunch to work, skipping your morning coffee or getting a part-time job.

After the Program

    According to DebtShield, a debt settlement company, three of every four people who sign up for debt management programs drop out before their programs are complete. If you're one of the four who survive, you'll have rebuilt your credit and should have at least an average credit score. Though many credit card companies will cancel your cards once you join the program, some will reinstate your credit after completion; other banks will offer you credit as well. Furthermore, you'll know a lot more about how to manage your credit, significantly diminishing the chances of you falling into a debt hole again.

Saturday, February 23, 2013

How to Obtain a Secured Credit Card

How to Obtain a Secured Credit Card

Are you needing to repair or build your credit? If so, obtaining a secured credit may be the ticket for you. There are plenty of secured credit card offers to choose from including a bank secured credit card and visa secured credit cards.

Instructions

    1
    What is a Secured Credit Card?

    A secured credit card requires you make a cash deposit that is basically collateral, and essentially, your credit limit. For example, if you deposit $300 in your account, your credit limit would be $300...IDEALLY!! This takes me to my next step..

    2
    Check for Fees

    Don't set yourself up for disappointment by being hasty and getting the first secured credit card you see. Annual fees and setup fees etc. will vary greatly. Be sure to read the fine print and requirements before you choose a secured credit card. Make a spreadsheet and compare your top 5 choices. Stay away from companies that charge application fees. You don't want to get your credit limit and see that more than half of it was eaten up by fees.

    3
    Weed Out the Ugly

    You can basically do a search for "secured credit card" and start comparing. If you are a credit union member, start there. Most credit unions offer secured credit cards with very low fees. Bank of America is another good choice with a very low annual fee and no setup fee. Applied Bank also charges no setup fee and a low annual fee. When you find a good one, stick to that one, don't go overboard.

    4
    Pick Top Choice

    Time to Choose. After you have compared and weeded out the high interest and high fee companies, choose your top option and apply. If you are unsure still, call the customer service number for that company and get ALL of your questions answered. This will also give you a chance to see how the customer service department treats their customers.

    5
    Verify & Activate

    Now that you have applied for the best secured credit card for you, sit back and wait for it in the mail. Once you get it, read all the materials included with it and make sure it is consistent with what you had agreed on. Check the APR, annual fee, and all other restrictions BEFORE you activate. After everything is verified, go ahead and activate your card and spend wisely. Make sure all your payments are on time and don't charge more than you can pay for in full. It's not a good feeling to not be in control of your debt.

Friday, February 22, 2013

How to Get Rid of Credit Card Debt Quickly

How to Get Rid of Credit Card Debt Quickly

Credit cards are beneficial and they've helped numerous people build a credit history. Once you've established a good rating, you can obtain a mortgage loan or auto loan and receive the best financing. Unfortunately, some people can't control their spending, in which they use credit cards unnecessarily. This can lead to excessive debt, and it can take years to pay down the balance. However, there are ways to get rid of credit card debt quickly. As a result, you'll increase your disposable income and boost your FICO score.

Instructions

    1

    Calculate your debts. Request a copy of your free credit report or gather your monthly credit card statements. Review your report and statements and write down the amount owed to each creditor. Add the amounts to learn your total debt.

    2

    Create a budget. To get rid of credit card debt quickly, you'll need to put your disposable income towards your debt. Establish a personal budget. Write down all your monthly expenses (housing, transportation, food and miscellaneous). Subtract this amount from your take-home income. Rather than spend the leftover money on entertainment, dining out or shopping, use this money to reduce your credit card balances.

    3

    Look for additional employment. If you don't have disposable income after paying your monthly expenses, consider ways to earn extra money. Get a part-time job or start a small home based business. You can start an office cleaning business, pet care business or lawn care business with little investment.

    4

    Ask for a reduced interest rate. Contact your credit card companies and ask for a lower interest rate. If you've been a loyal customer and you have a good payment history, they might approve your request. Once you have a lower rate, begin doubling or tripling your minimum monthly payments.

    5

    Borrow money from your home's equity. Homeowners can refinance their home loan and get cash to pay off their outstanding debts. Because refinances are expensive, some owners choose a home equity loan or home equity line of credit. These loans allow owners to tap into their equity and use the money for any purpose. Use the money to pay off your credit card debt and then pay back the money at a lower interest rate.

Can Unemployment Be Garnished for a Car Payment?

Your unemployment check cannot be garnished for a car payment. The Bankrate website reports that unemployment income generally is exempt from garnishment except for child support, spousal support and income taxes. Also, garnishment isn't possible under any circumstances for one or two missed car payments. Garnishment regarding an auto loan can take place only after your car has been repossessed and sold at auction or through a private sale.

Talk To Your Lender

    Knowing your unemployment check cannot be garnished for your car payment should provide some peace of mind. But you may still be stressed by your overall financial problems because of your unemployment. Get things under control by talking to your creditors about your situation. For example, the bank holding your auto loan may allow you to skip a payment or pay a smaller amount for a few months while you try to find work. Also consider selling the car or working with the bank to allow someone else to take ownership by assuming your loan. The move could protect your credit and position you to buy another car after you return to work.

Secured Loan

    An automobile loan is considered a secured loan, with your car serving as the collateral. If you stop making payments, the lender has the right to repossess your car. The Federal Trade Commission reports that the repossession can take place at any time and without warning once you have defaulted. An automobile loan can be considered in default after one missed payment, but generally repossession efforts don't begin until about the second missed payment.

Selling Your Car

    After the repossession, the lender has the right to sell your car at auction or through a private sale. In some states, the sale can be delayed while you are given time to regain possession of your vehicle by paying all the missed payments in a lump sum. Otherwise the sale proceeds, and you could be held responsible for any balance remaining on the loan after the car is sold. Example: Your balance on the loan at the time of the repossession is $6,500, and the car sells at auction for $4,000. The bank will hold you responsible for the remaining $2,500.

Civil Lawsuit

    The bank can file a lawsuit against you for the balance. A judge hearing the case can rule in favor of the bank by issuing a legal order called a judgment. The judgment requires you to pay the bank a specific amount of money. Your unemployment benefits remain protected by state law, but the bank could seek garnishment of your bank account for other money you have on deposit.

How to Take Money Out of a 401(k) to Pay Off Credit Cards

Because the sole purpose of a 401(k) plan is to encourage people to save for retirement, there are substantial penalties for taking money out before you reach the withdrawal age, which is 59 1/2. Money you take out early is subject to income taxes, plus a 10 percent penalty -- and that's if your plan even allows early withdrawals, which many do not. There's an alternative, however: borrowing money from your 401(k). Though it has its own costs, a loan isn't subject to taxes or penalties, so it is the best way to take money out of a 401(k) to pay off credit cards.

Instructions

    1

    Contact your plan administrator. Many employers hire an outside benefits firm to handle their 401(k). If you're not sure whom to contact, ask your company's human resources or benefits office.

    2

    Determine a loan amount and repayment schedule. Most plans allow you to borrow up to 50 percent of your vested balance at a low interest rate. You get up to 60 months to pay it back; those payments will be deducted from your paycheck. (References 1 .and 2)

    3

    Discuss any restrictions. You should be able to continue contributing to your 401(k) while the loan is outstanding, but ask to make sure.

    4

    Sign for the loan. Since the money you're going to be borrowing is your own, you don't have to apply for the loan or undergo a credit check. If your plan allows loans, as most plans do, then you automatically qualify. You also won't have to supply a reason for the loan. Again, it's your money, and as 401kHelpCenter.com notes, employers generally don't want to know too much about workers' private lives anyway. (Reference 3.)

    5

    Repay the loan. Because this is done through payroll deduction, you don't have to worry about missing payments or paying late.

How to Remove Debt Legally

Legally removing debt from your credit report -- especially delinquent debt -- can improve your credit score and make it easier for you to qualify for automobile loans, mortgages and other forms of credit. However, there are few options for legally removing the debt information. The Federal Trade Commission reports that information on your credit report can only be removed if it is wrong or outdated. It is impossible to simply erase scores of negative credit items from your report, states the FTC.

Instructions

    1

    Get a copy of your credit report from Annual Credit Report -- a website authorized by the United States Government to offer free credit reports under the terms of the Fair Credit Reporting Act. Visit the website to view and print your report.

    2

    Review the report to find delinquent debt information that can be challenged because it is outdated or wrong. Most negative credit information, such as late payments, can be reported for seven years. Bankruptcy information can be reported for 10 years.

    3

    Write a letter to the credit bureau listing the incorrect information on your credit report -- Equifax, Experian or TransUnion -- challenging any information that is wrong. Explain why the information is wrong and insist that it be deleted or corrected as required by the Fair Credit Reporting Act. If the information is outdated, state that as the reason why it should be removed.

    4

    Mail your letter to the credit bureau at its address listed on the credit report. Allow about 30 days for a response while the credit bureau investigates your claim.

Thursday, February 21, 2013

Can a Wage Garnishment Be Done if You Work Part-Time in the State of Georgia?

Like most states, Georgia permits creditors that follow proper procedures to execute wage garnishments to collect unpaid debts. A wage garnishment is the practice of taking a portion of your post-tax earnings and applying the funds toward your debt balance without your consent. Whether a creditor can garnish part-time income in Georgia depends on several factors.

Presence of Judgment

    Creditors cannot garnish wages in Georgia, except those involving unpaid child support, taxes and student loans, without obtaining a legal judgment against you for the debt. Civil lawsuits in Georgia are typically handled by county magistrate courts. The creditor begins the judgment process by filing a lawsuit in the magistrate court in your county. Unless you can show cause for dismissing the lawsuit, such as evidence that you have satisfied the debt, the magistrate court will issue a judgment against you for the debt, court costs and interest.

Earnings

    A creditor's ability to garnish your wages in Georgia is not dependent on whether you are a full-time or part-time employee. Instead, it depends on your earnings. Georgia follows federal law, which prohibits wage garnishment if you earn less than 30 times the minimum federally mandated hourly wage per week. If you earn more than this amount per week, your wages are at risk of garnishment, regardless of how many hours you work. For example, if you only work 20 hours per week, but earn $25 per hour, your earnings would exceed the protected earnings threshold.

Presence of Other Garnishments

    Georgia and federal law limit garnishment to 25 percent of your post-tax income for most debts, except child support and taxes. This limitation applies regardless of how many garnishment orders have been issued by separate creditors. If another creditor has already placed a garnishment order on your wages, the court may divide the 25 percent garnishment equally between your judgment creditors, or may allow one judgment creditor a higher percentage than another. It may also prohibit the new judgment creditor from garnishing your wages until the current garnishment is complete.

Bankruptcy

    If you include a debt for which the creditor has obtained a judgment in a bankruptcy filing, the creditor typically cannot execute a garnishment order. If the judgment creditor has already begun garnishing your part-time wages, the bankruptcy filing will stop the garnishment.

Tips and Debt Advice

Tips and Debt Advice

Whether you're dealing simply with the aftermath of holiday spending, or years of poor debt management, you can get rid of your debt and increase your savings. Debt can affect your interest rate on loans, and even hinder your ability to qualify for financing. Fortunately, there are several methods of tackling debt.

Debt and Credit Scores

    Major debt can reduce your credit rating. Spending a very large percentage of your income on debt can even result in credit rejections. Lenders check your balances on loans and credit cards, and they assess how much you spend on debt payments each month. By paying off your debt, you not only reduce your monthly expenses, you'll boost your credit rating and get better interest rates on loans.

Cash Purchases

    It's challenging to track spending when you use credit cards for everything. However, using cash to buy items forces you to budget your money and keep track of how much you actually spend. Trading in credit cards for cash helps you gain control of your debt, because you'll put fewer charges on your credit card. And as you make monthly payments, the balance on your credit cards will slowly go down. To help eliminate credit card use, keep cards at home, or destroy them, to avoid the urge to spend with credit.

Increasing Payments

    Minimum payments will eventually pay off your credit card, providing you don't add any new charges. However, it can take years to eliminate debt with minimum payments only. Adjust your mindset; make larger payments each month. This might involve cutting back in other areas of your life, to create additional cash. The money you spend on hair appointments, dining out and entertainment can help reduce your card balances faster.

Lower Interest Rates

    Think about transferring your high-interest credit card balances to another card with a lower rate. There are advantages to reducing the interest rate on credit cards. A lower rate brings fewer interest charges, and with lower interest charges, lenders ascribe more of your payments to the outstanding balance. If you don't want to move your balances, speak with your current card companies and negotiate a lower rate. Read the fine print on credit card applications before transferring the balance. Balance transfer fees will apply.

Information on Debt Solutions

Information on Debt Solutions

Debt is something that many American consumers deal with on a regular basis. By the end of 2009, Americans had accumulated $2.449 trillion in credit card debt, according to the Federal Reserve Bank. For people who find themselves overwhelmed by debt, there are several debt solutions available to you in the form of financial professionals and financial organizations.

Debt Consolidation

    Consolidation is the act of taking several high interest credit card accounts and bringing them all under one low interest rate loan. You not only lower your monthly payments, but you also reduce your interest debt and eliminate all but one monthly service charge. Ask your local bank or lender if they offer debt consolidation services. Some financial organizations specialize in debt consolidation. A debt consolidation organization will normally charge a monthly fee for its service that is rolled into your monthly payment. Before signing an agreement with a debt consolidation organization, check with the Better Business Bureau to see if there are any complaints against the company. You can call your local Better Business Bureau office, or use the Bureau's website for an online search.

Debt Negotiation

    Debt negotiation is when the consumer negotiates a payoff amount on the credit account, and then the creditor will put the consumer on a payment plan to pay off the account. Debt negotiation can be something you do yourself, but you can also hire a professional to negotiate for you. A professional will charge you fees for his services that can include set-up fees and monthly administration fees. You pay your money to the debt negotiator who then pays your creditors, and the monthly fee is added into that payment. When looking for a debt negotiator, check with the bankruptcy attorneys in your area as some of them may be debt negotiators, or they can refer you to a reputable negotiator.

Debt Counseling

    A debt counselor, or credit counselor, is someone you work with to help get your monthly obligations under control. The counselor will help you come up with a monthly budget plan, and then you work together to make sure your payments are made. In some cases you will pay money to the counselor and he pays your bills each month, or you follow the counselor's plan to pay your bills on your own. Counselors can also help negotiate debt and can refer you to a reputable consolidation professional. A credit counselor will normally charge you a fee to help develop your plan for you and possibly a monthly administration fee for plans where the counselor makes payments for you. To find a reputable credit counselor, you can check with the website of the National Foundation for Credit Counseling.

Bankruptcy

    Bankruptcy can be an extreme debt solution, but it is not as intimidating as it may seem, according to accounting expert Neil E. Colmenares writing for "The CPA Journal" website. You should consult a bankruptcy attorney about the details involved in filing for bankruptcy. But you should also keep in mind that you do not need to be completely broke to file bankruptcy, you will still be able to establish credit after a bankruptcy and you will be able to repair your credit enough to finance an auto or home sale. A bankruptcy stays on your credit report for 10 years, but it is possible to repair your credit before that 10-year period is up and benefit from the lessons that bankruptcy teaches.

What If I Can't Pay a Court Judgment Against Me?

What If I Can't Pay a Court Judgment Against Me?

Ending up on the losing side of a lawsuit or collection effort is no fun. It is even worse when you do not have the resources to pay the amount for which you are responsible. There are as many ways to handle this situation as there are types of judgments.

Nature of a Judgment

    Once a lawsuit is resolved, a judgment is issued. This is the final part of a court case. In civil cases, the judgment is a penalty or fee of some type. Most are money judgments. Money judgments must be specific and in writing. Other types involve real estate or other personal property.

Judgment on record

    Once a judgment has been issued, the next step is to docket it. During this process, the judge signs an order and hands it over to the Clerk of Court who files it. This has the effect of making the judgment and order of payment for monetary debt or a lien of record against any real property owned by the debtor. At this point, the losing party is responsible for paying, or satisfying, the judgment.

Creditor's Rights

    The creditor has the right to enforce the judgment against the debtor. In most states, this is called a "writ of execution." This gives an officer of the court, typically a sheriff, is given the authority to demand payment or seize and sell property to produce enough proceeds to satisfy the judgment. The umbrella of demanding payment can include garnishing wages, insurance or entitlement payments. The officer may be able to force the debtor to take bank funds to pay a judgment. In extreme cases or where a high-dollar amount is involved, the court an order sale of property and use the proceeds to satisfy a judgment. These are all the creditor's rights and an overview of what could happen. The Debtor has a few options to avoid these extremes.

Debtor's Options

    A debtor can ask the court for a hearing about his or her ability to pay the judgment.

    This requires the person to return to court with documentation of their finances. The judge will review the documents and make another consideration. If the situation is the debtor is unable to pay the entire judgment at one time, the court may agree to installment payments. Some states allow a determination that the debtor is "judgment proof." This means the person literally has no income or other means to pay a judgment. Some states have wages laws that prevent garnishment. That allows a person who is working, but below poverty level, to be protected from wage garnishment. This situation can also result in a debtor being considered judgment proof. This scenario is rare. The majority of cases end with the court demanding and accepting some sort of payment.

Wednesday, February 20, 2013

How to Get a Free Credit Report From TransUnion

How to Get a Free Credit Report From TransUnion

The Fair Credit Reporting Act allows eligible consumers to receive a free copy of their credit report. A free credit report can be requested from TransUnion if a consumer has been denied credit in the last six months due to a negative report from TransUnion. Consumers who are unemployed or receiving public assistance may also request a free report once every twelve months from TransUnion. Residents of Colorado, Georgia, Maine, Maryland, Massachusetts, New Jersey, Puerto Rico and Vermont may receive a free credit report from TransUnion at least once a year regardless of circumstances.

Instructions

    1

    Visit TransUnion.com to access the request form available to download and print.

    2

    Complete Step One of the form with the required information including your full name, Social Security number and date of birth, as well as your current mailing address and previous address if you have moved in the last two years.

    3

    Check the appropriate box in Step Two for the situation that applies to you. If you are requesting a credit report based on unemployment or receipt of welfare, provide specific contact information.

    4

    Input the cost of your credit report in the field provided. Enter zero if you qualify for a free report based on circumstances. A credit score is not included in the free report but can be added for an additional fee.

    5

    Indicate if you require a credit report in a different format, such as Braille, large print or audio, by checking the appropriate box.

    6

    Sign and date the form. Attach proof of address, as well as the credit denial letter if applicable or a police report if fraud is suspected.

    7

    Mail the completed form and supporting documents to TransUnion at the address listed on the form. Check your mail to receive your free credit report from TransUnion.

The Downside to Debt Consolidation

Consumers look into debt consolidation options as a means to combine their payments into one bill and receive a lower interest rate on the debt, which helps them pay off balances quicker. While debt consolidation presents certain advantages, there also are some downsides to debt consolidation. It helps to understand the risks before consolidating your balances.

Higher Interest Rate

    Applying for a debt consolidation loan doesn't automatically equal savings. Yes, a consolidated loan can provide a much cheaper interest rate than most credit cards, which can result in a lower monthly payment with fixed terms. However, not everyone qualifies for a low-rate debt consolidation loan. Getting a cheap interest rate on a debt consolidation, or any loan for that matter, requires a good credit history. Lenders check credit reports first, and they often give lower rates to individuals with credit scores in the 700 range and higher, and those who pay their bills on time each month. Those considering debt consolidation should get a loan quote first, and then compare the interest rate on the debt consolidation with what they are currently paying.

Risk of Foreclosure

    Consumers often apply for home equity loans to consolidate their debts at a lower interest rate. This option is an effective method, but the risks associated with home equity loans are high. Taking out a loan and using your house as collateral puts a second lien on the home. Paying your home equity lender on time each month is just as crucial as paying the lender that supplied the first mortgage. Defaulting on a home equity loan can result in a home foreclosure.

Increasing Debt

    The idea behind debt consolidation involves using cash from a loan to pay off your high-rate outstanding balances, and then repaying the debt consolidation lender at a lower interest rate. This method works as long as you don't re-accumulate debt. Paying off your credit cards with a debt consolidation loan isn't an excuse to accumulate new debt. Debt consolidation works only if you have self-control to curb spending with credit cards. Without control, you could end up doubling your debt and complicating your personal finances.

Debt Counselors

    Some consumers decide to work with a debt or credit management company to consolidate their bills into one payment and get rid of their debt faster. Counselors talk with creditors to negotiate lower rates and payments on your account, and they then make bill payments on your behalf each month to your individual creditors. The problem with credit and debt management companies is that some charge hefty fees for their services, and they could send payments to your creditors late, thus lowering your credit score. Before you consolidate, you should talk with several credit and debt counselors and compare fees. If you choose to use a debt counselor to help consolidate your debt payments, keep a close eye on your credit accounts to ensure that the company forwards your payments by the due date.

Can a Debt Collector Garnish a Joint Account?

A creditor has a right to sue a debtor for nonpayment of credit obligations and receive garnishment permission from the court. A creditor can garnish a debtor's wages or his bank account. A creditor can garnish a joint bank account. However, he cannot seize any money that belongs to the joint account holder if he is not a party in the lawsuit.

Garnishment Process

    A creditor must file a lawsuit against a debtor and request a writ of garnishment once the court awards it a judgment. A garnishment order allows it to take money from a debtor's bank account up to the amount awarded by the court. The amount may include late fees, interest charges and legal fees. A creditor should forward the garnishment order to the judgment debtor's bank, which immediately places a freeze on all funds in his accounts. The bank will return all checks presented for payment during the garnishment process. Returned-check fees may apply.

Joint Account Exemption

    While a creditor can garnish a joint account, he has no right to take the funds that belong to a joint account holder who is not a party in the lawsuit. Neither the judgment creditor nor the bank can determine if the funds belong to a joint account holder. A debtor has to file a joint account holder exemption claim upon receiving a garnishment notice. He may need to provide evidence supporting his claim that the funds belong to a joint account holder.

Community Property States

    If a debtor resides in a community-property state and the joint bank account holder is his spouse, the spouse's funds may be also subject to garnishments for debts incurred during the marriage. A creditor may need to obtain a separate garnishment order to garnish the spouse's income. A joint account holder may choose to deposit the funds into a different account to protect her wages until the creditor collects the garnishment amount awarded by the court.

Income Exemption

    If a debtor or his spouse receive an income that is exempt from collection, such as Social Security, disability, public assistance, alimony, child support or a pension, a debtor may file an income exempt form and request that the court release the funds. He should present documents, such as letters or statements, showing the source of exempt income. Upon verifying this information, the court can order the release of exempt funds.

Tuesday, February 19, 2013

What to Do If You Need Help Paying Medical Bills

One of the most common expenses that leads to financial problems is medical bills. Many people face large medical bills that they cannot afford to pay. If you find yourself with a large hospital or other medical bill, the situation may seem bleak, but you can pursue a few options.

Financial Aid

    When you receive medical service at a hospital, you may be able to apply for financial aid. Many hospitals have programs that help pay for the care of people who have financial problems. These programs could completely pay for your care or reduce the bill significantly. To qualify for these programs, you may have to have an income that is within 200 percent of the national poverty level. Even if you have a slightly higher income, you may still qualify for partial assistance.

Foundations

    Another option that you may want to pursue is getting help from a foundation or other organization. Depending on what type of condition you have, there may be some foundations out there that can help with your medical bills. For example, if you have cancer, the CancerCare Co-Payment Assistance Foundation can help you come up with the money to pay your copay for your health insurance. Depending on what type of health insurance you have, this may be a large amount of money.

Negotiation

    Most medical providers will negotiate with you when it comes to paying off your medical bills. If you have regular health insurance, you may get a large discount from the full retail price of the medical service. If you do not have medical insurance, you may be able to negotiate your rate down to the insurance company discount rate. To facilitate this process, you have to talk to a billing representative and ask for a better price. If you pay cash, you can sometimes get a discount as well.

Consolidation Loans

    Consolidating your debt may be another option for you to consider. By consolidating your medical debt, you can pay off your accounts and not have to worry about getting any lawsuits filed against you. To consolidate your medical debt, you may have to have a decent credit history or have some kind of collateral to use. You will have to pay interest on the debt, but you can stick to a regular payment schedule instead of having to worry about collection calls from a medical provider.

Can a Collection Agency Contact an Employer in Florida?

When a consumer gets behind on paying his bills, he will likely begin receiving calls from his creditors asking when they can expect to be paid. It is a tense situation made even more stressful when a consumer worries that his creditors may contact his employer.

Contacting Your Employer

    According to Florida Statutes sections 559.55 to 559.785, which deal with debt collection agencies and creditors, a debt collector cannot contact your employer unless you do one of two things. You must either verify to him that the debt is yours to pay or you must give him written permission to contact your employer.

Other Things They Can't Do

    Among the other things Florida law says a debt collector can't do is to pretend he's a police officer or agent of the government. He can't threaten you with force or tell you that he's going to tell other people and hurt your reputation, and he can't call you or your family to point of harassment.

    The law prohibits a debt collector from using profane language with you, trying to collect a debt that he knows is not yours and sending you documents that are made to appear to be legal documents but are not. He can't pretend to be an attorney or threaten to sell and advertise your debt to someone else. A debt collector can't refuse to identify himself, can't contact you via postcard or in an envelope that indicates that it's from a collection agency, and cannot contact you after you've notified him that you're represented by an attorney. Florida law also protects you from debt collectors who would try to trick you into paying for a collect call or telegram and makes it clear that collectors can call you only between 8 a.m. and 9 p.m. unless you have specifically asked to be called at another time.

Right to Sue

    According to Florida law, you have the right to sue a debt collection agency if it violates any Florida statutes regarding the collection of debt. Not only can a successful lawsuit result in an award of actual damages or $1,000, whichever amount is higher, but you will also be paid for attorney fees and the judge has the latitude to award punitive damages. You can also sue a debt collection agency for violating the Fair Debt Collection Practices Act.

Make a Report

    If you have been the victim of fair debt practices, file a complaint with the Florida Attorney General's Office. The office will often gather information through these complaints to file suit against offending debt collection agencies.

What Is Considered Validation of a Debt?

If you're a consumer who believes there is an inconsistency on your credit report, or if you are contacted by a third-party collection agency, you have the right to have your debt validated. Validation of a debt can remove incorrect information from your credit report, resulting in a higher credit score.

How Collections Work

    If you don't pay your loans or credit cards on time, your creditor will charge off your debt after a certain period of time -- usually a few months. Once the debt has been charged off, the creditor will most likely assign your debt to an in-house or third-party collection agency. Collection agencies often buy debt for pennies on the dollar, then bill you for the full amount due plus collection costs and legal fees.

Credit Collection Agencies

    if you are contacted by a credit collection agency, you have the legal right to validate the debt. In some cases, you may not have to pay an outstanding amount reported to you if the agency doesn't have the legal right to collect the money. Validation of debt will inform you whether the collection agency has the right to collect from you. The law that controls the debt-validation procedure for third-party credit collection agencies is the Fair Debt Collection Practices Act (FDCPA).

FDCPA and Debt Validation

    The FDCPA states that if you notify the debt collection agency in writing of your intent to dispute the debt, the debt collector must stop collection activities until it has validated the debt. The agency must provide you with proof that it owns the debt. Sufficient proof that the credit collection agency owns the debt includes a copy of a judgment or a copy of a signed contract between the agency and the original creditor.

Credit Reports

    If you find information on your credit report that is incorrect, you have the right to ask the credit reporting agency to validate your debt. Validation of the debt is a multi-step process. Write to the credit reporting agency and dispute the debt. The credit reporting agency will usually investigate your claim within 30 days; then the agency will notify you in writing of the result of the investigation. Additionally, you should notify the original creditor of your dispute.

Monday, February 18, 2013

Is a Revolving Credit Plan Unsecured or Secured?

Is a Revolving Credit Plan Unsecured or Secured?

A revolving credit plan is a credit card or line of credit on which an individual can make purchases up to a pre-set spending limit. When individuals who get such a plan pay off the purchases, they can again charge an amount equal to the spending limit on the account.

Facts

    Many varieties of revolving credit plans exist for consumers to choose from. Revolving credit may be either secured or unsecured depending on the consumer's eligibility and personal preference.

Types

    Unsecured credit is extended borrowers on their word that the debt will be repaid. Secured credit plans, however, require the borrower to provide collateral that the creditor may seize in the event that the borrower ceases to pay as agreed.

Considerations

    Unsecured credit plans are only extended to borrowers who have high enough credit scores to qualify. Borrowers with bad credit are a higher risk to creditors and are often only eligible for secured credit.

Features

    Revolving credit plans that are unsecured typically offer consumers a higher spending limit than secured plans. In addition, secured plans often charge higher fees and interest rates than unsecured plans.

Warning

    Revolving credit can be used to boost your credit score if you make all of your payments on time. Some secured accounts may not report to the credit bureaus. If an account is not being reported on your credit report, your score will not benefit by your timely payments.

Can You Settle Your Credit Card Debt That's Already on a Payment Plan?

You can settle a credit card debt that is on a payment plan -- but only if the credit card company agrees. Settlements are voluntary agreements between two parties, and the card company cannot be forced to settle. The company offered you a payment plan to help you recover from a financial setback. Switching to a settlement will require more discussions.

Payment Arrangements

    Payment plans generally allow your interest rate to be lowered and your monthly payment reduced for up to a year. It's a great deal for people who have fallen behind on their bills because of employment, illness or some other reason. By negotiating payment plans on all or most of your bills you save considerable money each month on finance charges and monthly payments. Some payment plans allow the interest rate to be waived entirely during the temporary period.

Alternatives

    Although payment plans are helpful some people with large amounts of credit card debt see them as a dead end. They realize that the payments and the interest rate will increase after the temporary arrangement ends, and depending on the size of the debt it could take years to pay off the account with only the minimum payment each month.

Settlement

    That realization leads some people to consider debt settlement as an option. Settlement allows you to pay off credit card debt for less than the full amount owed, with some companies willing to settle for 20 to 70 percent of the balance. Credit card companies usually allow settlements to be paid in installments over 90 days. For some people settling the account quickly at a discount is better than years of payments.

Credit Scores

    Debt settlement damages your credit score because your credit report will show that the account was "settled for less than the full balance." Multiple settlements will show creditors that you are bailing out on your obligations, making it tough for you to establish new credit at reasonable interest rates. For some, poor credit scores for a while is worth the trade off to eliminate debt.

Negotiating A Settlement

    Simply call your credit card company if you want a settlement. Tell the representative that you have decided that the payment plan will not work for you over the long term and that you would rather settle. Unfortunately, the card company may not take you seriously unless you start missing payments on the payment plan. Try to negotiate a settlement without resorting to that step, if possible. Keep calling the customer service department until the company agrees to a settlement that you can afford.

Sunday, February 17, 2013

How to Find a Reputable Debt Counselor

If you're struggling with debt and can't make ends meet on your current budget, credit counseling may be a helpful route to take, according to the Federal Trade Commission. A reputable credit counselor can help you manage your budget, present solutions to your debt woes, and help you devise a strategy to prevent future financial difficulties. Many debt counselors advertise themselves as "nonprofit" agencies, but the FTC warns that this might not always be true: you might incur high or hidden fees or be bullied into making "contributions" that cause you more hardship. Vetting unscrupulous debt counselors from those that are reputable is an important first step in ensuring that your financial difficulties are taken seriously and handled professionally, and that you will get the help you need to get out of debt.

Instructions

Reputable Credit Counseling: The Basics

    1

    Ask if the debt counselor is affiliated with an agency such as the National Foundation for Credit Counseling, which holds its member organizations to high financial and ethical standards. The NFCC also notes that some of the requirements imposed on a reputable credit counseling service are annual audits and written plans and quarterly statements that are provided to consumers. Also make sure that the counseling service is accredited by a third party, such as the Council on Accreditation (COA).

    2

    Inquire about fee structures and make sure that the debt counselor doesn't charge you before rendering services. The NFCC notes that, if the counselor states that fees are "voluntary," this is a red flag. A set-up fee should be around $50, with monthly fees in the range of $25. Inquire about what happens to your first payment; some credit counseling services keep it as a "donation," warns the NFCC. Your money should go toward paying off your debts and not to the counseling service.

    3

    Find out about the various services provided by the agency. Although a debt management plan (DMP) is often an appropriate way to address debt, the NFCC notes that it shouldn't be the only option offered. If the agency offers only one way to get you out of debt, keep shopping around.

    4

    Determine if the debt counselor will work with all of your creditors or just some. The NFCC warns that some credit counselors will work only with creditors who agree to take the consumers' adjusted payments. A reputable debt counselor will take a look at the big picture and offer a solution to all of your debts, no matter how big or small.

    5

    Find out how counseling services are delivered. The FTC advises you to seek a credit counseling agency that meets with you one-on-one. The NFCC notes that an initial session of at least a half-hour is customary; anything less, and you won't get thorough counseling.

    6

    Check out the debt counselor's reputation with other consumers. Find out if anyone has complained about the agency with the Better Business Bureau or the Attorney General's Office in your state. If complaints were filed but the agency meets all other standards, find out how the complaints were resolved.

How to Write a Permission Letter to Creditors

If you engage a representative to contact your creditors, you must give permission in writing to do so. Laws exist to prevent creditors from releasing information to anyone but you. For a lender or negotiator to contact a creditor on your behalf, it needs a letter specifying exactly whom you allow to receive the information.

Instructions

    1

    Insert the date at the top of the letter. Skip a space or two and write your name and current address. Skip another space or two and add the creditor's name and address. If you are writing to a specific person or department, insert the name below the creditor's address. For example: "Attn.: Collections Department.

    2

    Write the salutation. Odds are high that you will not have a specific person to whom you will address the letter. "To whom it may concern:" is sufficient.

    3

    Type a paragraph granting permission to release your information. Use phrasing similar to "I, Jane Doe, hereby give permission to Company A to request and receive information relating to account number 001." If you know the specific person who will be requesting the information, name him in the letter. For example, Mr. John Doe of Company A.

    4

    Sign the letter and make two copies. Send one to the creditor, one to the company or individual requesting information and retain one for your records.

Why Are Billing Dates & Statement Dates Different on Credit Cards?

Your credit card statement must include information about charges, interest and fees to comply with full disclosure laws. It can be confusing to follow all the information, especially when there are several days listed. Keep an eye on your due date, as that is when you must make a payment to avoid negative financial consequences.

Billing Cycle

    Every credit card company uses a billing cycle -- a period of about 20 to 25 days -- to determine how much interest to charge you. The billing cycle closes on the same date each month, although you may not get the bill until later in the month. For example, the billing cycle may close on the 9th of the month and you may get the statement on the 15th. The statement date refers to the date the statement was printed, not to the last day of the billing cycle.

Grace Period

    If you do not have any previous balance on the card, you usually get a grace period between the end of the billing cycle and the date your monthly payment is due. The credit card company does not charge you any interest on your purchases during this grace period. If you do not pay your bill by the due date, the credit card company begins charging interest on your purchases.

Due Date

    The due date is the date that your payment is due. If you do not pay your balance in full on this date, then you do not get any grace period on new purchases, and the credit card company begins charging interest on the balance. Most credit card companies take a percentage of your total balance to determine your minimum payment amount.

Reading Your Statement

    Your statement lists information about your current balance, any past due amounts, your interest charges and your billing date, due date and statement dates. Read your statement carefully each month to understand all the charges you are paying. Check your statement for unauthorized charges and contact the credit card company immediately if you see charges you do not recognize to reduce your liability for unauthorized charges.

Saturday, February 16, 2013

How to Build Low Credit

Low credit can affect various areas of your personal finances from buying a car to getting auto insurance. Some people live with low credit and deal with the consequences. But if you're tired of rejections or higher rates due to bad credit, consider effective methods to improve your credit.

Instructions

    1

    Borrow only what you can afford to pay. Taking out a number of loans or excessive credit card use can negatively affect your ability to keep up with payments, and missing payments triggers negative information on your credit score. Know your financial limitations and save up for purchases instead of applying for loans or credit accounts.

    2

    Eliminate balances to build credit. A high debt ratio can trigger a low credit score. Boost your personal score by paying down credit card balances and other loans in your name. Voluntarily increase your minimums to pay down a higher percentage of the principal each month.

    3

    Acquire more than one credit account. While it's important to exercise care when applying for new loans or credit, having too few accounts is an acceptable reason to submit an application. The types of accounts you manage does affect scoring, and it's imperative to have a mixture of accounts.

    4

    Keep accounts active. Inactive credit cards can stall your credit score because creditors may cease reporting the account to the bureaus. Rotate your cards to keep them active. Charge something inexpensive and then pay off the balance in full to avoid debt.

    5

    Remove negative items from your credit report. Because negative items on reports stay for seven years, it's best to avoid collection accounts and charge offs. But if these items do appear on your report, attempt early removal by paying off these old debts, and then asking lenders or creditors to remove the item.

Should You Pay a Charged Off AMEX Account?

AMEX, also known as American Express, is a bank holding company that issues credit and charge cards to people around the world. American Express cards are carried by consumers, small business owners and corporate employees. The person whose name appears on the account usually is responsible for payment, even if the card is issued through a company. Charge-offs on American Express accounts occur after several months of missed payments. However, the charge-off is only for internal accounting purposes, as the account is closed and placed for collection. The account holder remains responsible for the debt after the account is charged off.

Moral Obligation

    Many people feel a moral obligation to pay a charged-off American Express account. The company is known for outstanding customer service, and provides account holders with a variety of benefits. A charge-off on the account causes American Express to lose money if debt collection efforts are not successful. American Express encourages customers with charged-off accounts to pay the bill in order to end collection efforts.

Statute of Limitations

    The threat of a lawsuit is another good reason to pay a charged off American Express account. State statute of limitation laws limit how long American Express and other companies have to seek civil judgments for unpaid debt, but the average is about six years. After that the debt is considered too old for consideration by the court system. Some people may elect not to pay charged off American Express accounts that are beyond their state's statute of limitations. Other collection efforts, such as letters sent through the mail, can continue, but without the threat of a lawsuit American Express has few resources for collecting an old debt.

Credit Reports

    American Express reports to the major credit reporting bureaus, with charged off accounts listed on credit reports. Charge-offs are considered a very negative credit event and cause significant damage to credit scores. However, the impact lessens as the listing ages, and negative credit information is removed from credit reports after seven years. Some people may feel no incentive to pay a charged off American Express account that is beyond their state's statute of limitations and is no longer appearing on credit reports.

Changing Jobs

    Some people may elect to pay an American Express charge-off after taking a new job -- even if the old debt is no longer eligible for court action or is listed on credit reports. For example, the new employer may expect certain employees to apply for corporate American Express cards. However, an unpaid account from a previous charge-off makes the employee ineligible, possibly causing embarrassment as well.

Can You Consolidate Private Student Loans?

Loan consolidation is the process of replacing one or more loans with a different loan. If you have at least one student loan from a private lender, such as a bank or credit union, you can consolidate this loan with any other private student loan. However, you cannot consolidate private and federal loans together, nor can you turn a private student loan into a federal student loan.

Benefits of Consolidation

    Borrowers generally seek at least one of three major benefits of consolidating student loans. The first goal is to reduce the number of separate monthly payments by consolidating multiple loans into just one new loan. The second goal is to pay less in interest by getting a consolidation loan with an older interest rate than the original loan. The last major goal is to lower the monthly payment with a lower interest rate, longer repayment term or both.

Prepare to Consolidate

    Before applying for a consolidation loan, gather information to help you understand what kind of loan you need. Write down the outstanding balance and interest rate for each of your current private student loans. Add up the outstanding balances to find out how much to borrow with your consolidation loan. Because your interest rate on the loan will be based partially on your credit score, boost your score by getting current on all of your debt obligations and paying down credit card debt, if possible. If you know somebody with a good credit score, ask that person to co-sign on the loan with you to help you get a better interest rate. However, make sure that individual is willing to take joint responsibility with you for the repayment of the loan.

How to Consolidate

    Fill out an application for a private consolidation loan with a bank or credit union. If you like one of your current lenders for your student loan, ask about its consolidation programs. Another option, if you own a home, is to consolidate student loans by taking out a home equity loan. Because this type of loan is secured by the home, it will likely have a lower interest rate than a traditional consolidation loan. However, you are risking your home because you could face foreclosure if you miss payments. Talk to a broker to find out if a home equity loan is a wise option for you. Regardless of the route you choose, continue making payments on your current student loans until the lender sends confirmation that your loan has been paid off by the consolidation loan.

Warning

    Consolidating private student loans into a new loan with a longer repayment term might increase the overall cost of repaying your debt. Although the monthly payments on the consolidation loan might be lower than the sum of the monthly payments on the original loans, you could be making these payments for a few years longer than your original schedule. For the most savings, choose the highest monthly payment you can reasonably afford or get a loan with no prepayment penalty and make extra payments when you can afford them.

Friday, February 15, 2013

The Effect of Settling Credit Card Debt on a Credit Score

The Effect of Settling Credit Card Debt on a Credit Score

Debt settlement is often the last resort before bankruptcy. New home buyers are often asked to resolve open credit lines or delinquent reports on their credit files before a lender will approve them for a loan. To get these issues resolved quickly, some homeowners opt to settle with the credit card company by paying a fraction of the percentage owed. However, the effects of settling credit card debt can linger for a long time.

Consequences of Low Credit Scores

    People with bad credit are offered higher interest rates on loans and lines of credit. They also have to pay extra fees to lessen the risk to financial institutions for lending them money. In the book, "How to Repair Your Credit Score Now," Jamaine Burrell writes, "they may also be denied employment opportunities, be required to pay higher insurance premiums, or suffer martial problems, including divorce." Settlements can stay on an individual's credit report for seven years.

Impact of Settlements

    Considering settlement options usually follows setbacks that have already negatively impacted a person's credit score and just before considering bankruptcy. Settling credit card debt does cause a credit score to go down. First, closing credit accounts reduces the length of credit history, which is 30 percent of a creditscore. Secondly, it is still recorded as a delinquent account, because the borrower broke the agreement she made with the creditor. In the book, "Girl, Get Your Credit Straight!," Glinda Bridgforth says, "You're better off working off your entire debt load and not taking shortcuts, because shortcuts will shortchange your credit score."

Universal Default Policies

    If other credit card providers that an individual has accounts with adhere to universal default policies, they can raise his rates on the cards he has with them in response to the settlement. Even if he has never defaulted with them, they brace themselves for the possibility evidenced by the settlement. This policy is written in the fine print of the credit agreement.

When to Settle

    When someone is overwhelmed with debts, settling just for "peace of mind" is a viable option. Being able to get rid of the phone calls from creditors and relieve some of the burden makes it easier to manage other duties. A borrower should settle if the amount is far beyond her means. Bridgforth writes in "Girl, Get Your Credit Straight!," "If your debt is significant and options for repayment are minimal, it can be worth it to make a settlement and then be patient, as your credit score will improve over time."

Settlement Process

    The borrower negotiates terms with the credit card company. The credit card company agrees and solidifies that agreement in writing. Once the payments have been made to honor the settlement amount, the creditor will send a letter stating that the debt has been paid in full or settled for less than the full balance. The creditor can also mark the borrower's credit report account as "not paid as agreed."

Can Cosigning Help Your Credit?

Individuals with good credit scores are likely interested in maintaining their prime rating. But if you manage credit well, someone may ask you to cosign an auto loan, rental lease or other financial contract. Doing so can help this person qualify for financing. But on the other hand, cosigning can also affect your credit rating.

Definition

    When a creditor or lender agrees to approve an application if there's a cosigner, he requires a second signature or name on the application. Some people can qualify for loans without anyone's help. They generally have sufficient income to meet the monthly obligation, and good credit that reduces the chances of default. Cosigners assist borrowers with meeting a lender's loan or credit guidelines. Regrettably, cosigners take a risk by signing their name to the loan. They share responsibility for the loan with the primary borrower.

Improve Credit

    Credit scores can fluctuate, and acquiring and paying off debts influences your score. For example, taking out a new loan or carrying a high balance on your credit card can reduce your FICO score. But if you were to pay off these accounts, your credit score would improve. Likewise, cosigning a loan for someone can bring down your personal score. But if the primary borrower pays the account as agreed or pays off the account completely, your score increases.

Possible Credit Damage

    Cosigning a loan for someone can prove disastrous if the person has horrible credit habits. Understand that creditors/lenders report this account to the credit bureaus, and since your name and Social Security number are attached to the account, the account also appears on your personal credit record. Any action by the primary borrower affects your score. So, if this person makes a late payment or skips a payment, your credit score can decrease.

Considerations

    Only agree to sign a credit or loan application for someone if you're prepared to make the payment yourself. The individual who needs a cosigner may likely already have bad credit because of poor habits. Thus, he may eventually default or stop paying. A decrease in credit score because of someone's bad decision can affect your ability to get a home loan and other loans.

What Are Florida Child Support Laws on Property Liens?

What Are Florida Child Support Laws on Property Liens?

The Florida Department of Revenue is authorized to place liens on the property of parents who fail to comply with child support court orders. The purpose of the penalties is to ensure that minors in the state receive the financial support that they need to thrive. Parents who are unable to make the payments due to unforeseen life changes (e.g., layoff) should contact the department to inquire about setting up an alternate payment arrangement.

Property Liens

    Liens can be placed upon a parent's home, auto or boat if the parent falls behind in their child support payments. The Florida child support enforcement agency will issue a subpoena administratively to parents who become delinquent in their payments prior to placing a lien on their property. Liens for lack of child support payments remain effective for up to 20 years.

Setting up Payment Plans

    Contact the Florida Department of Revenue's child support services division to set up a payment plan as soon as you notice that you might be unable to make a payment. The agency works with parents who experience hardships (e.g., layoff, decrease in pay) to review and make adjustments to their court order or establish a temporary plan that helps them become current in their child support payments.

Removing Property Liens

    Pay the balance that is owed on child support back payments in full before you request that the property liens be removed. As soon as your payments are caught up, contact the Child Support Enforcement Agency and ask them to remove each lien.

30-Day Notice Ending Lease Agreement

A 30-day notice is a real estate term used when a tenant wishes to vacate a property or when a landlord wants a tenant to leave. It is a courteous document used to give ample time to the party receiving the document to make other arrangements.

Uses

    A 30-day notice to end a lease agreement is commonly used in month-to-month leases. It is also used in regular yearly leases. Often a person who is relocating due to his job moving serves this notice to his landlord. A landlord chooses to deliver this notice to a tenant for many reasons including performing remodels to the property or for eviction purposes.

Benefits

    This notice allows time for a landlord to replace the tenant without a lapse in rental income. It also allows a tenant sufficient time to find a new place to live if the landlord gives this notice.

Details

    A 30-day notice to end a lease agreement contains the names of both parties involved. It also states the date the tenant is moving out or the date by which the tenant is is being asked to vacate. It lists the address of the property and states the intention to terminate the lease by the party filling out the document.

Wednesday, February 13, 2013

What Errors Can I Dispute on My Credit Report?

The information included in your credit report contributes to your credit score. Factors such as how much you owe to each credit company and whether you have accounts in negative standing, lead to a positive or negative credit rating. Creditors are obligated by law to report factual information on your report. If you find errors, the credit bureaus are required to remove the information.

The Fair Credit Reporting Act (FCRA)

    The federal Fair Credit Reporting Act (FCRA) protects consumers against credit report inaccuracies, discrimination and violations of privacy. In the early days of credit reporting, creditors reported cryptic information to the bureaus that consumers either could not understand or were not allowed to see. In 1970, the Fair Credit Reporting Act was created to prevent unfair practices among credit bureaus and creditors. Under the law, you have a right to know what's in your credit report and dispute information that is inaccurate.

Included Information

    Credit reports contain a listing of your recent credit accounts. After seven years, most derogatory credit accounts roll off your report. There are some reportings, however, that leave a long term stain on your credit. For example, bankruptcy remains on your credit report for 10 years and cannot be removed before this time frame. With each credit account reported are details of your payment history including whether you pay late, the amount you owe and whether the creditor considers your account to be in good standing. The extent to which you are late is also included in your credit report. When an account is closed, it remains on your report with information on why your account was closed. You can dispute any information on your credit report that does not reflect facts surrounding that account.

Disputing

    With advancements in technology, credit bureaus allow you to dispute items in your credit file online. However, you can also write a letter and enclose a copy of your credit report and documentation to support your dispute. Disputing online gives you a faster turnaround on the response from your creditor. Each creditor has 30 days to prove the information reported on your report. If the creditor does not respond or cannot provide proof with 30 days, the credit bureau is required to remove the item. There is no limit to the number of items you can dispute on your report.

Free Reports

    You can request a free copy of your file if a lawsuit is brought against you based on information in your file, you are on public assistance, unemployed or a victim of fraud. As of 2005, all consumers are entitled to one free credit report from the major credit bureaus each 12 months. Review updates to your credit file consistently to monitor activity. Credit scores are not included in a free credit report. For an additional fee, you can obtain your score from the bureaus.

What to Dispute

    Negative items remain on your credit report for seven years. Check your credit report to ensure that any old charged off accounts, late fees, or judgments roll off your report in the correct amount of time. Only late payments that extend beyond 30 days can remain on your credit report for seven years. Also, each delinquent account reported in your credit score should reflect an accurate amount. Reference your old billing statements to ensure accuracy. If you are a victim of identity theft, you can dispute any unauthorized accounts opened in your name.