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..

Sunday, June 30, 2013

What Happens When a Creditor Freezes My Accounts?

Paying your credit obligations on time is important for maintaining a good credit rating. If you stop paying your bills, a creditor can refer you to collections or may file a lawsuit against you to pursue other collection attempts, such as wage or bank account garnishment. He must follow certain steps before he can take money from a debtor's account.

Obtaining a Judgment

    Before a creditor can freeze a debtor's bank account and take his money, he must first file a lawsuit and receive a judgment against you. The judgment confirms that a debtor owes the debt to the judgment creditor and allows him to proceed with debt collection. A creditor can file for a writ of garnishment to garnish a debtor's wages or to place a levy (freeze) on his bank account. When the court approves the writ of garnishment, the order is forwarded to a sheriff for execution.

Placing an Account Freeze

    The sheriff serves the papers to the bank, which holds the judgment debtor's bank account. When a bank receives a garnishment order, its compliance department places a freeze on the debtor's account balance pending account ownership verification. Since certain types of income are exempt form debt collection, the bank can review the deposits made within the past weeks to verify that account holder hasn't made any exempt deposits. Any checks, electronic transactions -- except deposits -- are rejected during the freeze. An account holder may have to pay returned-check fees for these transactions.

Notifying the Debtor

    A debtor may not know about the freeze until he tries to access the money in his account, and the transaction is declined. The bank does not notify him ahead of time. However, a creditor may send him a notice of intent to levy (garnish) his bank account. The bank must send the account holder a levy notice within one business day of placing a freeze. A levy notice must include an explanation of a levy and an exemption form for a debtor to complete if he has exempt income in his account.

Removing Bank Account Freeze

    If a debtor has exempt income in his account, he should file an exemption form with the court and attend a hearing to present the supporting documents. The court will issue an order to release the funds once it verifies the exempt status of the deposits. If a debtor does not have any exempt income and wants to regain access to his money, the first step a debtor should take is to contact a creditor or his attorney and try to negotiate a repayment plan. If a creditor declines, a debtor may consult an attorney and file with the court to vacate the judgment.

Is Credit Consolidation Good?

Is Credit Consolidation Good?

To have success in using a debt consolidation loan, you must first evaluate whether or not you are completely dedicated to paying off your debt. Unless you make it a priority to dig yourself out of debt and to stop spending on your credit cards, debt consolidation may be a dangerous route. However, if you get a good interest rate on the loan and you make every effort to avoid using your credit cards, the loan may be a good answer to paying off cards with sky-high interest rates.


    When you apply for credit consolidation, you are applying for a debt consolidation loan. If you are approved for the loan, it is applied toward your credit card debt and it wipes out your balances. You then make one monthly payment to the loan rather than multiple payments toward your credit cards.


    If you qualify for a lower interest rate on your consolidation loan than your current credit card interest rates, then you may save money on paying back your debt. A debt consolidation loan is also beneficial for those who have difficulty keeping track of multiple payments per month, since you make one lump payment to the loan.


    By applying for a credit card consolidation loan, you are allowing the consolidation company to make an inquiry into your credit report. Inquiries have a negative impact on your credit score, which may be outweighed by the positive impact of paying off your debt. However, since the debt consolidation loan wipes out your debt, people often begin spending on their credit cards again. This behavior creates more and more debt, which weighs heavily on your credit score. You must be fully committed to paying off your debt if you take on a consolidation loan.


    Oftentimes, the rates that debt consolidation companies advertise are for those individuals with very high credit scores, which you may not qualify for. It's vital to compare your current credit card interest rates with the loan interest rate to see if it's a significant enough difference for it to be beneficial to you. Also, it may be difficult to open new lines of credit because creditors will see that you have a consolidation loan, which is a red flag that you have had trouble with credit in the past.

Pros and Cons of Refinancing a Mortgage

The primary reason to refinance a mortgage is to reduce your monthly payment. Another is to move from an adjustable-rate mortgage (ARM) into a fixed-rate mortgage. When considering mortgage refinancing, it is important to weigh the possible consequences.


    A new mortgage with a significantly lower interest rate is almost always a positive. The lower rate will save you thousands of dollars in interest over the life of a mortgage.


    The cost of refinancing includes broker fees, mortgage points, title insurance, appraisal fees and possible additional costs. These fees must be paid in cash, or they will be added to the mortgage's principal balance.

Time Frame

    Plan to stay in the house and pay the new mortgage long enough for the lower payment to make up for the added costs of refinancing. Your mortgage broker should tell you how long it will take to recoup the costs.


    Switching to a fixed-rate mortgage from an ARM will prevent payment increases if interest rates increase in the future. Refinancing with a new ARM could lead to higher payments in as little as one year.


    If your mortgage is five years old or more, refinancing to a new 30-year mortgage could result in higher total interest payments even if the rate is lower. Instead, refinance at a lower rate but with the same final payment date as your existing mortgage.


    Refinancing to a larger mortgage to take cash out reduces your home equity. If home prices fall, your mortgage balance could be higher than your home's value.

Saturday, June 29, 2013

Can I Sell My House After Filing Bankruptcy?

It is possible to sell a house after filing for bankruptcy -- but don't expect to keep all of the profits for your personal use. The federal bankruptcy court will closely control all of your debts and assets once you file for bankruptcy, including a sale of your house. The bankruptcy court may rule that creditors should receive at least some of the profits from a sale of your house after bankruptcy.


    This issue is complex and requires careful discussion with a bankruptcy attorney. Bankrate.com suggests that it is better to sell the home before bankruptcy, keep all the money from the sale and then use Chapter 7 bankruptcy to eliminate all unsecured debt such as credit cards -- if you qualify for Chapter 7. Individual states have different laws about protecting equity in real estate during bankruptcy. That means, depending on the state, you could sell your house in bankruptcy and keep some or all of the proceeds, depending on the law and the amount of equity in your home. However, the law may require you to use the proceeds to purchase another house. That could cause problems because there's no guarantee that someone in bankruptcy will qualify for a new mortgage for several years.

Chapter 7 Bankruptcy

    Chapter 7 and Chapter 13 are two forms of personal bankruptcy. A primary function of Chapter 7 is to liquidate assets to pay creditors. Usually, debtors can keep their primary residence in Chapter 7 because of exemptions. Exemptions protect certain property from liquidation. However, a debtor wishing to sell his house during Chapter 7 could do so. Chapter 7 is the fastest form of bankruptcy, lasting only three or four months. Debtors considering selling their home during Chapter 7 should postpone the sale until after the bankruptcy is completed or discharged.

Chapter 13 Banruptcy

    Chapter 13 bankruptcy lasts far longer than Chapter 7. It takes three to five years to complete Chapter 13 because of a mandatory payment plan. Chapter 13 participants are given a budget for reasonable living expenses, with all other money sent to creditors as part of the payment plan. Many people filing for Chapter 13 are trying to keep their homes and protect them from foreclosure. Chapter 13 also allows for the voluntary sale of real estate, but the court may order contribution of least a portion of the profits to the payment plan. That means waiting until after the bankruptcy to sell it advisable in Chapter 13 as well.

Foreclosure Avoidance

    Some people may choose to sell their homes in bankruptcy to avoid foreclosure on the property. For them, losing profits from the sale is not a consideration because they will lose all equity in foreclosure anyway. Foreclosure remains on credit reports for seven years and bankruptcy for a minimum of 10 years. Some people in bankruptcy decide that they simply cannot afford their mortgage payments and try to sell to minimize damage to their credit report.

How to Borrow Money to Build Credit

In what seems like a catch-22, you need to have credit history to get many types of credit, but the only way to build credit history is to use credit. However, a few types of credit are available to people with little or no credit history. If you borrow money through one of these methods and repay it consistently, you will slowly build your credit history and enhance your chances to borrow more money in the future.



    Go to your local bank or credit union with $300 or more in cash. If you already bank there, have at least $300 available in your account.


    Ask whether the bank or credit union has secured credit cards or secured loans for which it reports the payment history to all three major credit bureaus. Borrowing from a bank that does not report to the credit bureaus will not help your credit score. If this bank does not report, keep asking at other banks until you find one that reports payment history.


    Apply for a secured credit card or secured loan at the bank you have found. With either of these forms of borrowing, the bank requires you to put money in a special savings account to get a credit line or loan of an equal amount. The bank holds your money as a security deposit that it can use if you don't make payments.


    Multiply the credit limit on your secured credit card by 0.3 to find out the maximum amount of credit you should use on that card at any given time. For example, if your credit limit is $300, multiply $300 times 0.3 to find that you should never have a balance over $90. Keeping your balance to 30 percent of your limit helps the portion of your credit score that considers the amount you owe.


    Make at least one charge on your secured credit card each month. It is best to use the card to buy something that you would have gotten anyway and have the cash to pay for.


    Pay your bill on the secured credit card or loan each month by the due date. This builds payment history on your credit report, which will help increase your score. Plus, if you pay your secured credit card bill in full, you will not owe interest.

Friday, June 28, 2013

Credit Card Company Tricks

A credit card is an easy, convenient way to make payments. They are also a great way for companies to make money off of you in any number of ways. No one has to agree to take a credit card, and credit card companies often use tricks and tactics that can take advantage of your willingness to skip over the fine details so you can use the card as soon as possible.

Rate Increases

    While the CARD Act of 2009 imposed significant restrictions on the ability of credit card companies to increase interest rates, they can still do so. Card companies cannot increase rates on fixed-rate cards during the first year without first notifying the cardholder at least 45 days prior to the increase and only after the cardholder is late on a payment. However, they can increase the rates after the first year without these restrictions, and can increase rates on variable-rate cards.

Fees, Fees, Fees

    Credit card companies love fees, as these are guaranteed money makers. They can't force you to buy something, but they can impose any number of fees. Paying your bill a few days late? That's a fee. Transferring balances from another card? There's a fee there too. And some of these fees, like balance transfer fees, cost a percentage, not a flat rate. That means the more money you transfer, the more fees you have to pay.

Different Rates

    Credit card companies love to claim that they offer low interest rates. While these claims are true, that doesn't mean the offers apply to everyone. Credit card companies typically have a range of interest rates that apply to a credit card, and they determine what interest rate you get offered based on your credit score, according to Liz Pulliam Weston of MSN Money. Always ask what credit rates apply to your card before you sign any agreement.

Choosing What Laws Apply

    Credit card agreements can be long, complicated documents that make people fall asleep within the first few paragraphs. If you can, read through the entire document carefully. You'll likely find a provision that says something like, "This agreement is governed by the laws of the State of X." What this means is that regardless of what state you actually live in, your credit card agreement is covered by a different state's laws. It shouldn't be a surprise to you that the state listed in the agreement usually has laws that are much more favorable toward your credit card company.

Explanation of a Debt Settlement

A proliferation of ads promising to erase debt has lured overburdened consumers into striking deals that may leave them in worse financial shape. The culprits are debt-settlement companies that negotiate deals with the creditors in the hope that the creditors will settle for lump-sum payments of less than they're owed. The debt-settlement industry is largely unregulated, according to the Federal Trade Commission, so make sure you understand the process and its risks before you enter into an agreement with a debt-settlement company. You also can attempt to reach a debt settlement with your creditor on your own, without the assistance of a debt-settlement company.

How Debt Settlement Works

    If you choose to try to settle your debt through a debt-settlement company, the company you hire usually will advise you to stop making payments to your creditors. Instead of paying your creditors, you'll make monthly payments into a special account the debt-settlement company maintains on your behalf. Once you've amassed enough money to encourage your creditors to settle your debts, the debt-settlement company will attempt to negotiate payoff amounts of less than your balances. If the creditors agree, the debt-settlement company pays the creditors from your account.

Risks of Debt Settlement

    The debt-settlement process can take many months, or even years, and there's no guarantee your creditors will settle. In the meantime, late fees and interest continue to accumulate, the number of days past due shown on your credit report continues to increase, and your creditors may continue their collection efforts. In addition, the debt settlement company collects its fee from your payments into the settlement account. You'll likely pay the company a monthly fee, and you may have to pay a percentage of the savings you reap by settling. This is money you otherwise could have used to pay down your debt. If the creditors refuse to settle, they can sue you. Although the debt settlement company won't defend you in a lawsuit, it might use the money in your settlement account to hire an attorney on your behalf. In this case, according to the Iowa Department of Aging, you'll have to decide whether to defend yourself against the lawsuits or negotiate payment plans with your creditors. Even in a best-case scenario, in which you save enough within a reasonable period for the debt-settlement company successfully to negotiate settlements with your creditors, the creditors may report to credit bureaus that you settled for less than you owed. Although these notations damage your credit less than bankruptcy would, they're still serious blemishes. You'll also have to pay income taxes on the difference between your credit balances and your settlement amounts.

Alternatives to Debt Settlement

    The first option is to work with your creditors to find a solution to your difficulty in keeping up with your payments. The creditors may reduce your interest rates or lower your payments by giving you extra time to pay off your balances. If you're unable to negotiate a plan on your own, seek help from a nonprofit credit counseling agency to create a debt repayment plan. Under such a plan, you'd make one monthly payment to the agency, and the agency would disburse it to your creditors. Credit counseling agencies charge lower fees than debt settlement companies do. In addition, because many creditors fund credit counseling agencies in an effort to avoid bad debt, the chances are good that your creditors will work with the agency. If you're forced to drop out of the program because you can't keep up with your negotiated payments, you at least will have paid down some of your debt. You also can contact your creditor directly and attempt to reach a debt settlement for a lump-sum payment that is less than the total amount you owe.

Choosing a Reputable Debt Settlement Company

    If, after weighing the risks and considering your options, you decide to work with a debt-settlement company, make sure you can cancel your agreement and receive the money in your settlement account if your creditors sue you or refuse to settle. The debt-settlement company probably won't refund fees you've already paid, however. In addition, the company should offer full disclosures about the risks and limitations of settlement. Finally, check with the Better Business Bureau and your state attorney general's office to inquire about complaints made against any company you're considering hiring.

How to Deal With Late Credit Card Payments

Even the most organized individuals may accidentally make late credit card payments. Vacations, moving and other events cause distractions. However, once you miss credit card payments, it's important to take action right away. Payment history makes up the largest chunk of a credit score, according to MSN Money.



    Pay right away. Contact the creditor and make the payment over the phone if possible. If your lender can't do this, send a payment through mail or online banking.


    Ask the lender to remove the late fee. Consumers with a positive track record (very few late payments) have more leverage. Contact the customer service number for your credit card company and ask to remove the late fee. Explain the circumstance that caused the late payment (out of town, moving, ect).


    Speak with a manager. If the customer service representative doesn't have the authority to remove the late payment fee, talk with his manager. If you have numerous late payments on your account, the manger might not be flexible. However, if you only have an incident or two in the past, she may agree to lift the fee.


    Request that the late payment not be reported to credit bureaus. If the creditor agrees to remove the late fee, get a verbal agreement that the company won't report the late payment. If they do, this will adversely affect your credit score.


    Review your credit report. Consumers are entitled to a free credit report every 12 months. If you haven't ordered one lately, request it. Free credit reports can be ordered with Annual Credit Report ("see Resources"). Review the credit report to ensure the credit card company didn't place a late payment on your account.

Thursday, June 27, 2013

Credit Policies & Procedures

Any company that sells products and services on credit will have some type of credit policies and procedures in place. If the policies are too lenient or too strict, they will have a negative impact on their ability to operate profitably and stay competitive within the marketplace.

Ability to Pay

    A company extending credit to a consumer will first look at the prospective client's ability to pay. The company will look at the amount of total income in relation to debts owed.

Willingness to Pay

    Organizations also take a look at a customer's willingness to pay. They will review your credit report to see how you paid your debts in the past. Anyone with an excessive amount of past-due debts may be denied credit.


    The next criteria looked at is the customer's stability. The longer you have been on your job and at your residence, the better.

Scoring System

    Some companies use an automated credit scoring system. If your application does not score a certain number of points, you may be rejected automatically without a live person reviewing your application.


    If your credit file has bankruptcies, judgments, liens, charge offs, bad debts, foreclosures and collection accounts, there is practically no chance of your being approved for credit. Credit policy can refer to credit extended to a consumer or business.

Credit Procedures

    Companies commonly offer terms of 2/10 or net 30. A buyer can pay the invoice in 10 days and receive a 2 percent discount or the balance in 30 days and receive no discount. If an account becomes delinquent, a credit hold can be placed on an account to prevent further purchases. Overdue accounts can also be sent to a collection agency for further action.

Derogatory Credit Information

Derogatory Credit Information

Lenders, insurance companies and even employers use credit reports to determine risk factors and consumer trustworthiness. Derogatory credit information may include delinquent payments, bankruptcies and high balances. How this information affects your credit report depends on your initial credit score and the severity of the event.


    Late payments, high balances, debt settlement, collection accounts, tax liens, credit application inquiries, foreclosures and bankruptcies all lower credit scores. Lender inquiries affect your score the least, whereas bankruptcies may lower your score as much as 240 points.

Time Frame

    Most negative credit information remains on your credit report for seven years. Inquires stay on your report two years, and bankruptcies may remain for up to ten years. Unpaid tax liens may stay on your credit report indefinitely unless you are a California resident, in which case they are removed after ten years.


    Derogatory credit information may result in less favorable lending terms, higher insurance rates and denied rental applications and may hinder future lending options and even limit employment opportunities.


    Check your credit report annually to make sure the information is correct. Rectify credit report errors by contacting both the credit-reporting agency and the company that reported the information.

Wednesday, June 26, 2013

What Personal Information Does a Credit Report Contain?

What Personal Information Does a Credit Report Contain?

Credit reports contain a variety of information that credit grantors use to determine credit worthiness. Because of the personal information included in a credit report, care should be taken to ensure identity security.


    In addition to information given about your credit history and debt obligations, credit reports may also include your name, aliases or maiden name, date of birth, occupation, current and previous addresses and phone number.

Additional Information

    Credit reports also allow for a consumer statement in the personal information section. This statement can include any information you would want lenders to know about certain situations in your credit history. It gives you an opportunity to provide explanation for defaults, shared accounts or bankruptcies.


    Personal information is included on a credit report so lenders who view the credit report can verify your identity.This personal information is often compared to fields completed on an application for credit.


    Credit reports do not contain information about a person's driving record or criminal record, although complete background checks will include those items.


    The personal information listed on a credit report can be enough to enable identity theft if the report were to get into the wrong hands. Review your credit report on a regular basis to ensure that personal and credit information is accurate.

Help With Money Problems

Help With Money Problems

No matter how your money problems came about, there is no quick fix short of a large windfall. Even that is no substitute for good money management, which is a life skill that will help you through good times and bad. Ignore the claims of companies that say they can "erase your bad credit." You need to take charge of your financial life, which means making significant changes in the way you spend and save money.

Review Your Credit Report

    You need to know where you stand financially before you can begin to fix your financial problems. Start by taking an analytical look at each of your credit reports from the three major credit bureaus: Equifax, Experian and TransUnion. Note any discrepancies between the reports from the three bureaus and dispute any errors you find on your credit report by writing a letter to the creditor and then sending a copy of the letter to the credit bureau.

Create a Personal Balance Sheet

    Create a personal balance sheet by listing all of your debts and all of your assets. Subtract the debts from your assets to determine your net worth. Free templates and other money management tools are available at Mint.com. A good understanding of your overall financial picture will help you to know where to begin solving your financial problems.

Create a Budget

    Track your expenses for at least one month, keeping a detailed log of every expenditure you make. Often, seeing where your money is going will open your eyes to how you can reduce expenses. Prioritize your bills and pay them as soon as you can in the month, paying the most important bills first. Do not wait until a few days before the due date to pay each bill. Force yourself to save, even if it is a dollar a week, but increase your savings with the goal of saving 10 percent of everything that comes in.

Get Help

    If you need help, the Federal Trade Commission (FTC) offers advice on selecting credit counselors and debt management plans. The FTC suggests that you ask credit counselors what services they offer, ask to see their formal written agreement and ask if they are licensed in your state. Debt management plans are not the same as credit counseling and they are not right for everyone. Debt management plans take an active role in your finances. You deposit money monthly with the organization and it disburses your funds, paying your unsecured debts. With your approval, the organization negotiates with your creditors to lower interest rates and remove fees. Always check your monthly statements. Completion of the plan may take 48 months or longer.

Tuesday, June 25, 2013

Independent Debt Advice

Independent Debt Advice

Getting debt under control takes hard work and commitment. Independent debt advice involves strategic planning, addressing the real issue behind problem spending and making a pledge to adjust spending habits, all of which can help you find relief without resorting to quick-fix debt solutions, which could end up hurting your credit score.

Talking to Creditors

    In lieu of using a debt settlement or debt consolidation company, consider contacting creditors yourself. Credit card companies and other lending institutions may be sympathetic to the financial hardships of customers who are upfront about their situation before defaulting on payments. A lender may offer a debt repayment program that reduces the interest amount and/or monthly payments.

Budgeting Your Spending

    Knowing exactly how much you make versus how much you have to pay for essential expenses, like housing or insurance, can help you discover ways to save money so you can pay off our debts faster. In a budget, it is also important to note how much you spend on miscellaneous items such as eating at restaurants for lunch or buying music online. If you notice you are spending more on non-essential items than you intend, think of ways to reduce or eliminate the expense. For example, if you purchase food for lunch, consider packing your own instead.

Knowing Your Debt

    To get a good hold of your debt, you must know your debt. Along with a budget, notate the total amount you owe each creditor, your current monthly payments, the monthly payment amounts you can afford, interest rates and the anticipated amount of time it will take you to pay off each debt. Creating a timeline can help you keep track of your progress and create a list of priority debts. Instead of making the largest debts priority debts, financial expert Dave Ramsey suggests making the smallest debts a priority. Once you pay off the smaller debts, you will have extra money to use towards the larger ones, which will help you pay the larger debts faster.

Planning for the Future

    Out of control spending often begins with one purchase beyond an individual's means, and it is easy to fall back into bad habits. Stick with a budget even after you pay off your debts to help you build up a savings account or plan for a large expense that you can pay for with cash, such as a vacation.

Difference Between a Paid in Full Account and a Charge-Off

Difference Between a Paid in Full Account and a Charge-Off

When you receive your credit report, you may find certain unfamiliar terms. The terms "paid in full" and "charged-off" may appear in relation to a debt account, such as a credit card bill or a loan. They signify the status of your debt account and may affect your ability to obtain credit.


    Your lender informs the credit reporting agencies when you have paid off your debt so the account appears as having been paid in full on your report. On the other hand, your lender stops taking account of a debt if you have not paid it off 120 to 180 days after the due date. The lender then reports it as having been charged-off. The lender does this to keep bad debts off the company's financial statements and avoid overestimating its assets.


    If you have completely paid off the debt related to an account, your credit report should show it as having been paid in full. On the other hand, an account may have the charged-off status whether you have paid for it or not. The credit report may differentiate between a paid charge-off or an unpaid charge-off. The paid charge-off status appears if you pay for the debt after the lender reports it as having been charged off. If you negotiate a partial payment of the debt, the lender may consider it a settled charge-off.


    Although the lender has considered your debt as bad debt and removed it from the financial statements, the lender may still attempt to collect payment from you. The lender may have an in-house collection department that contacts you to request payment. The lender may also choose to sell your debt to a collection agency for less than your owed balance. The collection agency then contacts you for payment in the hopes of making a profit.

Effects on Credit

    Having the charge-off status on your credit report may lead to inability to get credit because future lenders see it as a sign of a risky borrower. To remove it, you may contact the creditor and pay off the debt. Request that the lender update your credit report with the new information. Depending on the case, the credit report may then show a "paid charge-off" or "paid in full" status. If you don't do anything, the charge-off will disappear in seven years.

What Is the First Thing to Do to Establish Credit?

Establishing a credit history can be tough because you need credit to establish a history but cannot get credit without first having a credit history. Fortunately, you may employ several steps to make your finances attractive to a potential creditor. The first thing to do among those steps is quite simple and can be accomplished by visiting your local bank or credit union.

Open a Checking Account

    Opening a checking account is a simple first step to establishing your credit history. The amount of money you keep in your account doesn't have any affect on your credit but many credit card companies require you to disclose if you have a checking account when you apply for a card. Using your checking account also can give you practice managing money and paying bills, which helps you manage credit better and instills the importance of only spending what you can afford to spend.

Find Stable Employment

    A credit card company wants to know that you have stable employment so you can reliably pay your credit card bill each month, The longer you are able to stay with the same employer, the better the employment looks on your credit card application. This shows your reliability and decreases the chances of you suddenly losing your source of income. If you have a sporadic employment history, it may be difficult for you to establish credit, because a potential creditor may view you as a bad risk.

Apply for One Credit Card

    You don't need to apply for 10 or 15 credit cards to establish your credit history. In fact, applying for a large amount of credit cards can actually hurt your credit score because of all the inquiries into your financial record from potential creditors. You only need one credit card to begin the process of credit building. You should apply for an unsecured card without an annual fee. An unsecured card is a credit card that does not require a down payment to open the account. If the credit card company turns you down because of insufficient credit history, call the company and explain your situation. The company may just reverse course and issue you a card with a low spending limit based on your employment history.

Spend Wisely

    Never use a credit card to make a purchase you cannot otherwise afford. This puts you in a financial hole and at the mercy of finance charges and interest fees. Use your credit card to make smaller purchases that you can pay off completely within a single 30-day billing cycle and always pay the bill on time. This helps you establish a positive history of using credit appropriately. If you are unable to keep the monthly balance of your card at zero, try to always make more than the minimum payment to limit interest charges.

Sunday, June 23, 2013

How Do Deleted Items Affect My Credit Score?

How Do Deleted Items Affect My Credit Score?

Repairing your credit history can be a lengthy process. Your ability to buy a house or get a low interest rate depends on your credit score. Your credit score is impacted by payment history, debt-to-income ratio and other factors. Deleting any of these factors can change your credit score. Here are a few of the deletions that can improve your credit--and a few that can hurt your score.


    The Fair Credit Report Act (FCRA) was created to ensure that account information is reported accurately, and provides consumers with legal rights to sue for any FCRA violations (see Resources).

Personal Information

    Debt collectors can use personal information to validate accounts. Deleting incorrect addresses or name misspellings can help delete erroneous accounts on your credit report.


    Excessive inquiries can lower your credit score and impede your ability to obtain credit. Dispute unauthorized inquiries and request deletions to improve your credit rating.

Negative Accounts

    Removing negative accounts can raise credit scores by 10 to 15 points.

Closed Accounts

    Deleting closed accounts with good payment history can decrease your credit score, as the length of your credit history counts for 15 percent of your credit score.

Structured Debt Explained

Structured Debt Explained

Structured debt is simply any type of dept such as a credit card or car loan, by which the lender customizes terms for the borrower. Typically, it is structured to include incentives for the borrower to do business with the lender. Borrowers, however, must be careful that this "special" structuring doesn't appear to be more favorable to the lender by including increased fees, penalties and payments.

Fine Print

    Structured debt is also called "customized debt" and "tailored debt." Borrowers must be clear on terms and all the fine print of the contract. The final amount to be paid off should be calculated.


    In many debt consolidation schemes, the company will offer to pay off all the borrower's loans and give him a lower monthly rate. The length of payments, though, will be extended to make a larger profit for the company.


    To give an example, a person may have $10,000 in credit card debt, is paying the minimum of $200 per month, with the total debt to be paid off in four years and two months (actually longer if interest is taken into account). The debt consolidation company will create a structured debt for the borrower to pay $156.45 for six years. While the terms may appear attractive, the borrower will actually be paying $11,264.40. While the debt is structured so the borrower is paying $43.55 less per month, he will actually be paying $1,264.40 extra.

Your Best Interests

    After clearly understanding all terms in the structured debt contract and the total amount she will actually be paying, a borrower must determine if this is the best situation for herself. If she cannot afford $200 per month and is willing to pay the additional sum after six years, then she should accept the deal.

Interest Deferment

    One common structured debt instrument is to defer interest until the end of the loan. This is commonly found in bond issues in which the debtor has a better chance to have the project funded with bond proceeds once revenue is beginning to be generated that can cover the principle and interest when it's finally due.

Divorce & Bad Credit

Divorce & Bad Credit

The Centers for Disease Control and Prevention reported the marriage rate as 6.8 out of 1,000 of the population in 2009, and the divorce rate in the same year as 2.4 for every 1,000 people. Any credit held jointly reflects on both partners, and poor credit habits and the failure to make payments means difficulties for both people in obtaining future credit.


    Poor credit affects the consumer interest rates paid on loans. It also increases the premium prices you pay for car and home insurance policies as well as the cost of taking out a student loan and mortgages. Credit reporting agencies track credit through lender and credit card company reports, and determine a credit rating and score for individual borrowers. Married couples using joint credit receive a score based on the credit of the individual partners, but poor credit habits impact both partners equally when credit is shared.

Married Couples

    Credit companies extend credit accounts both jointly and to married individuals as separate accounts. Couples holding joint accounts hold joint responsibilities in borrowing and making the payments on the balance, and credit reporting agencies record married couples holding accounts only as personal and independent borrowers. According to the Federal Trade Commission, couples with separate credit accounts allowing the other spouse rights as an "authorized" user are equally responsible for their spouse's debt, regardless of the original borrower name on the account.

Divorce and Credit

    Legal divorce judgments recognize separate credit accounts as personal property, not as joint property, in states without community property rights. Credit reporting companies in states recognizing community property rights, including Texas, California, Idaho, Nevada and Arizona, hold both spouses responsible for debt when the account allows both people to sign for credit. When one spouse used the credit exclusively for personal purchases outside the joint marriage funds, that spouse holds the responsibility for any debt.

Removing Spousal Credit Problems

    Even when a divorce degree divides joint debt, credit held jointly still reflects on the credit reports for both people. Courts require spouses to provide proof of any exclusive credit status during bankruptcy proceedings; credit agencies mandate the same proof to remove credit dings due to spousal spending or when a spouse fails to make payments on a debt held as personal debt during the marriage.

Proactive Actions

    Divorcing couples must take steps to separate individual credit from joint accounts by contacting each credit company and lender to determine how the credit is held. Order credit reports to confirm joint, individual and authorized-user accounts. Telephone the lenders listed on your credit report, and follow up with a written request, to remove your soon-to-be ex-spouse from any account not intended as a joint account. Contact the credit reporting agencies directly to identify any lenders unwilling to remove the spouse from accounts.

How to Qualify for an Unsecured Loan With a Judgment

It is possible to qualify for an unsecured loan with a judgment on your credit report. It depends on the lender's credit guidelines and the type of loan you are seeking. For example, certain secured loans, such as payday loans, do not require a credit check. The Federal Trade Commission strongly advises against payday loans, but they are popular with people who cannot qualify for standard financing.

Legal Action

    A judgment is a legal decision reached by a judge. She issues a judgment after hearing a lawsuit and agreeing that you failed to pay a debt or you should pay financial damages because of a civil dispute. The judgment orders you to pay a person or firm a specific amount of money. Judgments are listed on credit reports for seven years and are considered negative credit events. Some lenders refuse to lend to people with unpaid judgments on their reports, regardless of their credit score.

No Collateral

    Unsecured loans are risky for creditors because the loans aren't backed by collateral. The judgment labels you as a credit risk, prompting some lenders to fear you will simply walk away from a new unsecured loan if you develop financial problems and cannot pay. Judgments often eliminate consideration from banks and credit unions, forcing you to apply elsewhere for unsecured loans at exorbitant interest rates.

Credit Repair

    Judgments cannot be removed from your credit report unless the information is inaccurate or has been listed on your report for more than seven years. Major credit bureaus Experian, TransUnion and Equifax regularly review court proceedings to gather the information. Paying the judgment results in your credit report being updated to show the the listing as a "paid judgment." Paying the judgment increases your chances of eventually being approved for unsecured loans at reasonable interest rates. A paid judgment shows creditors you are trying to repair credit mistakes.

Secured Credit

    You may be better off without credit if you are forced to borrow money at high interest rates. Instead, create a plan for earning extra money and paying off the judgment. Pay all your other bills on time while paying down debt as well. Eventually the paid judgment will have less of an impact on your credit score and you may qualify for unsecured loans at reasonable rates.

Saturday, June 22, 2013

Help for My Credit

Credit, in the form of revolving credit card accounts and fixed term loans, gives you buying power but also builds up debt. Help is available, whether you are just starting to have bill paying problems or are already delinquent on most or all of your accounts. Assistance comes in simple forms, like financial management education and more involved measures like debt management plans and bankruptcy filings.

Credit Counseling

    Credit counseling helps your credit by providing customized assistance, such as teaching you money management or budgeting techniques, going over your bills and making budget suggestions and referring you to financial education. Many counseling firms have free information on their websites for self help. Choose a non-profit counseling firm and get an up-front disclosure of any fees. The most reliable firms are financed mainly by creditor contributions, according to the Better Business Bureau. The National Foundation for Credit Counseling, a professional group, gives referrals to local counselors.

Debt Management Plans

    Debt management plans, which credit counseling firms administer, give you a structured framework in which to repay your debt, usually within three to four years. Your credit is helped because credit counselors often convince your creditors to deduct late payment fees, drop interest rates and change your delinquent accounts to on-time status with the credit bureaus as long as you follow the payment plan, according to the Bankrate financial site. Your payments go to the counseling firm, which redistributes them to the appropriate accounts.


    Bankruptcy releases you from responsibility for some or all of your debts, but it devastates your credit rating and sometimes requires you to liquidate your property. Chapter 7 bankruptcy has the most impact because it releases you from almost all of your bills and forces the sale of most of your assets, according to the Federal Trade Commission. Chapter 13 bankruptcy is milder, allowing you to keep much of your property but requiring you to partially pay some bills. Bankruptcy is a court action that shows up on your credit reports for 10 years and federal law requires you to go through counseling before filing and a post-bankruptcy money management class.

Credit Report Clean-Up

    Help your credit quickly by checking your credit reports through the website AnnualCreditReport.com, which provides them for free every 12 months, and disputing incorrect information with TransUnion, Experian and Equifax, the FTC explains. The bureaus do not monitor your data for accuracy but you can report mistakes through their online forms, which gives them 30 days to investigate and fix or eliminate the information. Your credit rating improves once the negative entries are gone.

Help With Debt Management & Reduction

Help With Debt Management & Reduction

Anytime you receive goods or services today in exchange for a future payment promise, you incur debt. Although some amount of debt is largely unavoidable, too much debt can significantly affect your present-day financial life as well as limit future opportunities. Fortunately, it is never too late to begin practicing the art of debt management and reduction. While success ultimately depends on your level of commitment, help is available from a variety of sources.


    Successful debt management requires an understanding of personal finance. You need to learn about debt, budgeting, the importance of saving and, most importantly, the steps you can take to achieve your financial goals. Learn about money by taking a class at your local community college, reading books or by visiting online sites such as MyMoney.gov, MappingYourFuture.org and HandsOnBanking.org that offer free instruction on a variety of personal finance topics.

Assess Your Situation

    In order to successfully manage and work toward reducing debt, you must be fully aware of your situation. Create a list on paper or as an alternative, consider using free personal finance software you can access at sites such as MySpendingPlan.com, Mint.com or MoneyStrands.com. Using whichever method you choose, create a list of all monthly expenses and creditors, the type of debt, total balance and monthly payment amounts and if applicable, the interest rate. Compare this list to your monthly income to see a total picture.

Take Action

    Reducing your debt load will not happen without taking positive action. Create a budget you can live with but that reduces unnecessary expenses and then contact all of your creditors, whether or not you are in default, and attempt to work out repayment terms you can follow. If the debt involves a student loan or a type of secure credit such as an auto loan or mortgage, see if you can negotiate a short-term reduction or suspension of payments.

Outside Assistance

    Outside help is available in the form of credit counseling and debt management plans. Credit counseling is a good idea if you need additional help assessing your situation, getting and staying organized or creating a plan for reducing debt. In most cases, when you work with a credit counselor, you are responsible for carrying out action steps such as setting financial goals, creating a realistic budget and contacting creditors to work out repayment terms. However, if your counselor feels your situation is serious or creditors appear unwilling to with you, she may recommend that you enroll in a debt management program. In a program such as this, a debt management specialist works out repayment terms and sends monthly payments to creditors on your behalf with funds you provide each month.


    If you decide to participate in credit counseling, choose your counselor with care. Be wary of any that charge upfront or monthly fees or that encourage you to enroll in a debt management program before assessing your situation.

The Child Support Laws in South Carolina If You Break a Court Order

When parents divorce, the court often requires the non-custodial parent to pay child support to the custodial parent to aid with expenses related to raising the children. Failure to pay puts a parent in contempt of court and puts him at risk of civil and criminal penalties. In South Carolina, parents can work with the Child Support Enforcement office to locate deadbeat parents and get them to pay.

Civil Consequences

    Parents who default on their child support obligation may be sued for the amount of money they owe to their children. Once a court enters a judgment against a parent, the parent faces several civil consequences. His employer may be required to garnish his wages, or withhold a certain amount for child support every pay period until the debt is paid. In addition, the court may report the parent's non-payment to the credit bureaus and seize tax refunds.

Locating Parents

    The South Carolina Department of Child Support Enforcement posts the names and photos of parents who owe child support that it is attempting to locate, as well as the amount of child support these parents owe. The Department of Child Support Enforcement also accesses public records such those from the Department of Motor Vehicles in an attempt to locate the absent parent. It then compares information gathered through these records to law enforcement databases to obtain additional information about the parent's whereabouts.

Criminal Penalties

    Parents who do not pay child support can lose their driver's license until it is paid. As of February 2011, the parent may also be fined up to $1,600 or sentenced to a year in jail for failure to pay child support if she cannot provide a suitable reason for her delinquency such as severe financial hardship. If the parent fails to attend a hearing regarding her delinquency, the court may issue a warrant for her arrest for contempt of court.

Contacting Child Support Enforcement

    If a parent fails to pay child support as ordered, the custodial parent must first apply for service from Child Support Enforcement before the order can be enforced. The custodial parent must obtain an application online from Child Support Enforcement and fill it out completely, providing information about both parents, both parents' employers and the identity and number of children involved in the case. Child Support Enforcement charges an application fee of $25 as of 2011.

Friday, June 21, 2013

How to Negotiate Debt With Credit Card Companies

How to Negotiate Debt With Credit Card Companies

Sitting with a pile of unpayable bills rattles the nerves of us all. Don't give up. Look at the available options, take a deep breath and plunge in. Take back your life. Take control of your credit card bills and other debt. Sometimes it is difficult to admit you are in over your head. It is important to step in and take control of the situation before it is beyond repair. Negotiating debt with credit card companies is a viable option.



    Loss of a job, injury, healthcare expenses or out of control spending can land families in a difficult financial position. Avoiding your debt is not the best solution. It will not disappear. In fact it will only continue to grow. Avoiding your credit card responsibilities may seem like the simplest answer, but it is not.


    Your embarrassment, shame, pride, fear all need to be put to the side. Instead of avoiding bills, step up and contact the credit card company to understand all options available. Debt consolidation companies are not the only way to reach these settlements. Individual credit card owners can represent themselves to negotiate their own credit card debt settlement.


    Understand the implications of a debt settlement. Debt settlement is when an individual contacts a credit card company or other lender to discuss options for decreasing the amount of funds owed. A reduction in the total amount owed, a change in payment plans, waiving of late fees and penalties are all possible outcomes. Credit card companies are willing to listen and discuss these options.


    Think about what this might do to your credit history. Discuss with the credit card company if and how they report a debt settlement in your credit report before you agree to anything. Some companies will just close your account to new activity and allow you to pay down the negotiated balance without any negative notation on your credit report. Others may record this as a loss in capital to their company. When a company reports any negative activity on your current creditworthiness, it will impact your future ability to obtain loans. Creditors may not be willing to extend credit to an individual who has undergone a debt negotiation. Or a creditor will charge a higher interest rate to loan funds in this situation, considering the loan a higher risk.


    Negotiating a debt settlement is attractive to credit card companies. It does indicate that an individual is nearing foreclosure or bankruptcy proceedings. Credit card companies do not negotiate debt out of the kindness of their own hearts. They want to receive some of the funds owed to them before the situation becomes any more difficult. In bankruptcy proceedings, credit cards are one of the last debtors to be paid. Negotiating a debt settlement is a better alternative for the credit card company. At least they get something.


    Make the call. Contact the credit card company and ask to speak with a supervisor. Explain the difficulties in paying the bill. Ask what options are available. Write down all alternatives as they are explained and make sure you understand everything. If debt negotiation is not discussed, bring it up as an option. Do not expect to resolve everything in the first call. Credit card companies are not going to give up collecting money due just because you made the call. Get the name and number of who to contact to finalize your options. It is OK to wait a day to understand your options and make a clear headed final decision.


    Make it work. Once your final decision is made, call the credit card company again. Discuss the alternative you need to take. If you decide to negotiate your debt, try starting with around a third of the debt you own. For example, if you owe $12,000 say that you are willing to pay $4,000. The credit card company will negotiate up from this point. Focus on the number you are willing to pay, not the number that you actually owe.

What Is a Debt Solver Program?

What Is a Debt Solver Program?

Debt solver programs exist to help people who -- for whatever reason -- find themselves unable to make payments on time. There are many reasons for someone to be unable to pay her debts including job loss, medical expenses and irresponsibility with credit. Debt programs make it possible to get back on track financially. Use a program approved by the United States Department of Justice and check the company's rating with the Better Business Bureau before signing up for its services.

Credit Counseling

    Credit counseling services assist you in making a budget. You will discuss your complete financial situation with a counselor. The counselor will help you identify the bills you have to pay, including housing, utilities and food, and any needless spending. Sticking to the budget will help you pay down your unsecured credit and implement a savings plan. The initial consultation can take up to an hour and you are able to make follow-up appointments on an as-needed basis.

Debt Management Plans

    If you find that you cannot make payments after developing a budget, your counselor may recommend a debt management plan (DMP). With a DMP, your counselor will look at all of your debts and develop a payment plan with your creditor. You will make monthly payments to the DMP and the company will distribute the money to the creditors. The DMP company may be able to negotiate lower interest rates and removal of late payment fees. It can take up to four years or more to pay your debts and you may be required to cease using your credit accounts and not open any other lines of credit.

Debt Negotiation

    Debt negotiation companies negotiate with creditors in an attempt to decrease the amount you owe. You make regular payments to the debt negotiating company while the company negotiates a settlement. The company will not make any payments to your creditors until you reach an agreement and then they will make a lump sum payment to your creditor from your account.


    By law, creditors must report late payments to credit bureaus. They do not have to work with you on your debt. Late payments, settlements and charge-offs will negatively affect your ability to receive credit in the future. The Internal Revenue Service can tax non-paid debt over $600 per creditor as income. Some consumers have discovered that the companies they are working with have not made any payments to their creditors and that they still owe the full amount plus late fees and interest. While many of these companies are non-profit, they may still charge you to establish an account, monthly maintenance fees and a percentage of the amount the company saves you. The company you hire may drop you as a client if your creditor sues you while in its program.

Wednesday, June 19, 2013

Credit History & Mortgage Problems

If you're unable to make your mortgage payment on time every month it will mar your credit score because payment history is the biggest factor in determining your credit score, according to the Fair Isaac Corp. The National Association of Realtors reports that late mortgage payments will decrease your score more than late credit card or car payments.


    Before you bought your house, your lender determined how much mortgage you could afford and your interest rate, in part, by using your credit score. Payment history, which shows your ability to pay bills on time, makes up 35 percent of your total score, so paying the mortgage on time is crucial, according to Fair Isaac Corp. A late car or credit card payment will decrease your credit score, but The National Association of Realtors said credit agencies like Vantage will knock at least 100 more points off your score if you miss a house payment.


    The longer you are unable to pay, the more it damages your credit history. In the "payment history" section of your credit report, you'll see late payments categorized -- by 30, 60, 90, 120 or 150 days or more late. Experian reports many loan modification programs aren't available until you're delinquent by at least 90 days. By this time, your credit has been severely damaged.


    In 2011, Fair Isaac Corp. studied three people -- all with solid scores of 680, 720 and 780 -- and followed how their late payments impacted their scores in various stages of delinquency -- 30 days, 90 days, short sale, foreclosure and bankruptcy. After 30 days, the 680 score slid to 600 to 620, while the 780 fell to 670 to 690. At 90 days late, the 680 score remained the same, but the 780 dropped at least another 20 points. By the time the former 680 credit holder entered into short sale, foreclosure and bankruptcy, scores had dropped to 575 to 595 and 530 to 550 respectively, while the former 780 score plummeted to 620 to 640 and 540 to 560 respectively (scores were the same for short sale and foreclosure).


    After being late on the house payment by 30 days, it's estimated it will take nine months for a person with a 680 score before the delinquency to fully recover that score again. It will take three years to recover if your score was 100 points higher to begin with. FICO's findings become even more dramatic when serious delinquency is considered; to recover the original 680 score after a bankruptcy, it will take five years, while a person who formerly had a 780 score will need seven years to a decade to recover that score.

Can a Judgment Take Away Personal Property?

Most often, a creditor with a judgment against you won't take your personal property. While state laws vary, a significant percentage of your property is probably exempt. This means that your creditor has to go to the time and expense of taking certain legal steps, even after he has gotten a judgment against you, and the money he recovers might turn out to be negligible. A creditor does have the right to try, however, and some of your property is easier to get to than other items.

Household Items

    To take your household items, such as furniture, computer equipment, entertainment equipment or jewelry, your creditor must first apply to the court for a writ of execution of the judgment he has against you. A process server, usually your county sheriff, will then come to your home and take an inventory of what property you have for potential sale. Depending on the law in your state, some of your property is probably exempt. For instance, in Ohio, approximately $1,000 worth of your household items and personal property are safe from seizure. In Virginia, $5,000 worth of household goods are exempt, as well as $1,000 of your clothing, and $10,000 worth of any equipment you need, such as a computer, for work or school.


    Unless you own your car free and clear, there is no loan against it, and it is a newer model with significant equity, it is probably safe from a creditor with a judgment against you. More than $3,000 of your equity in your automobile is exempt in Ohio. In Virginia, it is $2,000. If you have a loan against your vehicle, the exempt amount is the difference between the loan value and what your car is worth.

Bank Accounts

    Bank accounts and your wages are the most vulnerable to a creditor with a judgment against you. The creditor must also file a request with the court to levy your bank account or garnish your wages, but once he receives approval, he can deal directly with your bank or your employer. He can't take your entire pay check, however. He is restricted to a percentage, after taxes; the percentage varies by state law. Social security income, child support, disability income, workers' compensation and unemployment benefits are usually exempt.

Real Estate

    If you own real estate, only rarely will a creditor force the sale of it to collect on your debt because the process is involved and expensive. However, he may place a lien against your property so you can't sell it without first satisfying the judgment against you. Alternately, you can sometimes make an agreement to satisfy the lien through the sale proceeds.


    Unless you have significant assets that you own outright and income from employment, you may be "judgment proof." But this is not a legal concept; it simply means that trying to collect from you is probably more trouble than it's worth because after exemptions, there's not much, if anything, for the creditor to seize.

    If a creditor does attempt to take your assets, check with an attorney in your state as soon as possible. If that property turns out to be exempt, you have a limited period of time to object to the court and either stop the seizure or reclaim the property.

How to Report a Judgment to a Credit Bureau

How to Report a Judgment to a Credit Bureau

A judgment is a final decision made by a court of law in a lawsuit or criminal proceeding. It is usually recorded with a clerk of court in public records. Credit bureaus report judgment information in credit reports that relate to debt collection. A creditor who has been awarded a judgment can report it to the credit bureaus so it appears on the debtor's credit report.



    Collect the information regarding the judgment. Since judgments are recorded in public records, obtain a copy of the judgment. It will have a control file number (CFN) and an official records book and page number for identification. Some county clerk of court offices scan copies of court documents and upload them onto the county clerk's website. This is another way you may be able to obtain a copy of the judgment.


    Contact a credit bureau. The three major credit bureaus are Experian, Equifax and TransUnion. Call them and let them know you would like to report a judgment on a consumer or business. They may ask you to mail the details regarding the judgment to them.


    Receive confirmation the judgment was included in the credit report. You can ask the credit bureaus to provide you with written confirmation the judgment was recorded in the consumer's or business's credit file or report. It may take a month or longer for the information to be recorded. A consumer or business can try to dispute the information you reported. Make sure you have a copy of the judgment so the credit bureau has proof the information is accurate.

The Procedural Requirements for Wage Garnishment in Indiana

Both judgment creditors and employers must follow wage garnishment procedures in Indiana. Wage garnishment allows the creditor to take part of the debtor's pay to satisfy the debt. A creditor typically must get a money judgment in court against the debtor before trying to garnish wages in Indiana.

Creditor Returns to Court

    The judgment creditor must return to the Indiana court that granted the money judgment he wants to garnish, and he must file an affidavit or motion to support the garnishment. The filing has to include statements and details required under Indiana law: the debtor owes the creditor the amount requested; the creditor has notified the debtor and taken steps to determine what, if any, property he has eligible for seizure; and the debtor does not have property the creditor could seize to satisfy the judgment.


    Once the creditor has filed with the court, he must notify the debtor and garnishee, and wait the number of days required by the court for the debtor and garnishee to answer. The debtor and garnishee can be different parties. For example, if the debtor on the judgment is a business, the responsible person for the business is the garnishee. After the time has passed, the creditor can move forward with the garnishment.

Notice of Garnishment

    The court issues a writ of garnishment -- which includes a worksheet to calculate the garnishment amount -- to the employer of the garnishee. The employer must comply with the writ. The garnishment amount is the lower of two amounts in Indiana: 25 percent of the debtor's weekly net pay or what remains after multiplying 30 times the state hourly minimum wage, $7.25 at the time of publication. If the debtor does not take home at least 30 times the minimum wage each week, the employer can't garnish and must return the worksheet to the court showing the figures.


    Garnishment procedures for some types of debts are not the same in Indiana. Local and federal government debtors, such as income tax and student loan collectors, can garnish wages by sending a special notice to the employer; no judgment is needed. Court-ordered child support garnishments do not need a separate judgment to garnish for arrears.

    Indiana allows a debtor to set up a payment plan with the judgment creditor to avoid garnishment. If all parties approve, the employer does not receive a garnishment notice, and the debtor voluntarily gives the creditor money according to the agreed-on payment schedule.

How to Easily Repair Credit

How to Easily Repair Credit

Having a low credit score can significantly derail your attempt at securing loans with reasonable interest rates. If you have made bad financial decisions in the past by making late payments or you've had your car or other belongings repossessed by banks, you may find yourself with a below-average rating. Fortunately, you can take steps to improve your credit score. Though you will not see progress overnight, in time you should see your number tick up to an acceptable rate.



    Check your credit reports for errors. According to CBS News, over 80 percent of financial lenders use your FICO score in determining your loan specifications. This FICO score is figured by averaging your credit ratings from the three credit bureaus: TransUnion, Equifax and Experian. Obtain your credit report from the FICO website or another service. Study your reports and look for any errors, such as accounts opened in your name without your knowledge. Contact the specific reporting bureau in writing and detail the mistake or fraudulent activity. The company may take up to 30 days to respond to you regarding their decision to remove the erroneous items.


    Downsize your credit card accounts. Check with your credit card companies to see if you can make balance transfers at low interest rates. Consolidate your cards so that you have the least number of payments possible. Look at your history with each company and close the newer accounts, but keep the older accounts open. Having long-standing relationships with credit companies reflects positively on your report.


    Pay on time. The biggest factor in determining your FICO score is your payment history. Thirty-five percent of your rating is based on whether or not you pay on time, how many past-due accounts you have and how recently these problems occurred. Make a spreadsheet that lists all of your accounts, along with their due dates and payments required. Keep track of these payments and never assume that you have a grace period.


    Pay higher balances down first. Your credit score is adversely affected by any account that has a balance due that is more than 35 percent of your limit. You should still make your minimum monthly payments on your lower accounts, but you should strategically pay more on these higher accounts, at least in the beginning of your process.

HUD Certified Consumer Debt Counseling Agency Requirements

HUD Certified Consumer Debt Counseling Agency Requirements

The U.S. Department of Housing & Urban Development (HUD) provides a list of HUD-certified credit and debt counseling agencies on its website. These agencies provide consumers with the budgeting skills and savings tips that they can use to change negative spending habits. Unlike non-certified credit and debt counseling agencies, though, those affiliated with HUD must agree to certain requirements. Make sure that the agencies with whom you are considering working, follow these requirements. Working with a HUD-certified credit and debt counseling agency might save you a significant amount of money.

No-Charge Services

    Several HUD-certified debt and credit counseling agencies participate in the government agency's Housing Counseling Program. As part of this program, these agencies provide foreclosure-prevention advice and homeless counseling at no charge to consumers. If you do turn to a HUD-certified debt counseling agency for assistance on keeping your home, make sure that it does not charge you any fees for specific foreclosure-prevention services.

Fee Services

    As long as the services they provide are not related to foreclosure-prevention and homeless counseling, HUD-certified debt, credit and housing counseling agencies are allowed to charge what HUD calls reasonable fees--though the agency doesn't define what it considers "reasonable"--for other counseling services. These services include credit counseling, debt counseling, pre-purchase housing counseling services and other services.


    Before they can charge fees, though, HUD-certified counseling agencies must first meet certain requirements. According to HUD's regulations, the counseling agencies must inform clients of the fee structure, and exactly what they'll be paying, before they begin providing them with any services. They must also offer their credit, debt and housing counseling services free of charge to those consumers who can't afford to pay the counseling agencies' fees.

    Finally, HUD-certified counseling agencies must charge fees that are commensurate with the services that they offer. This means that these agencies can't overcharge their customers, though HUD does not state definitively what a "commensurate" fee is.

What Is a Revolving Credit Balance?

What Is a Revolving Credit Balance?

You may hear bankers and others with a taste for finance speaking about revolving credit balances. Both businesses and consumers can have revolving credit extended to them by a bank or other lender. In short, revolving debt is a fixed amount of money that does not have to be repaid every month. As of March 2010, there was $852.6 billion in revolving debt in the United States, the majority of which is credit card debt.


    The majority of revolving credit comes from loans extended to consumers through credit cards. Your revolving credit balance is the total amount outstanding on each of your credit cards. Unlike a home mortgage or other loan, a revolving credit does not need to be paid off in a specified period of time. Revolving credit can be drawn down at any time, but typically has a limit that is based on a person's credit score and ability to pay off the debt.

Interest and Fees

    While revolving credit does not need to paid off by a certain time, it can accrue interest on a monthly basis and be subject to fees if not paid off in full every month. The interest rate and fees can often be changed by the bank that issues the credit card.

Failure to Pay Your Balance

    Revolving credit is typically unsecured debt, meaning the bank that extends you a loan through a credit card does not have a claim on your house or personal property if the card goes unpaid. Therefore, the bank cannot repossess your property if you fail to pay off the loan over time.

Implications for Credit Score

    Your combined revolving credit balance has a significant impact on your credit score. Unpaid balances can negatively affect your score and your ability to obtain credit cards in the future. Conversely, demonstrating that you can pay off your credit card balance every month can greatly increase your credit score and make it easier to obtain loans in the future. The total amount of revolving credit that you are able to borrow (the total maximum available on all of your credit cards) can also affect your credit score depending on how may cards you currently have.

Obtaining Revolving Credit

    Obtaining a revolving line of credit typically requires you to fill out an application with a credit card company, bank or other financial institution. The size of your credit limit is determined by your credit report and credit score. Some people with higher credit score can be "pre-approved" for revolving credit, which enables you be approved for credit quicker.

Tuesday, June 18, 2013

How to Settle With a Citi Card

How to Settle With a Citi Card

Settling credit card debt with Citibank is a negotiation process that takes planning and an understanding of how much banks can accept to improve their financial standing with the Federal Reserve and removing bad debts from their books. Understanding settlements made with other Citibank customers and their financial situations will allow the person looking to settle the debt to gain leverage over the bank and ask for specific programs. Knowing the specific debt settlement programs will direct the bank agent to the program they can easily place you in. Each bank has a different program to offer.


Settle a Citibank Credit Card


    Search various online forums that specialize in settling credit card debt. Review what others in the forums are writing about settling their credit cards with Citibank or the deals that they are working out to pay down the debt faster. Sites like Bankrate.com and Credit Card Forum have excellent blogs and forums where Citibank card customers report strategies used and deals obtained from the credit card banks like Citibank.


    Gather your personal financial information together. When discussing a settlement with a creditor or a bank, it will ask questions about your bills and income. The banks do this to make sure that you need the program being offered and that your budget has enough income to afford the new payment owed to them.


    Contact the customer service number on the back of your Citibank credit card. Each card has a specific number attached to it. Usually the general customer service person cannot help negotiate a debt, but she can connect you to the internal collections department that has the ability to do that.


    Explain to the customer service agent what you want to accomplish with the call. This should be done politely and clearly. This will allow you to get to the agent that can get your debt settled.


    Negotiate the best deal you possibly can with the customer service agent. Be polite and firm with the agent. Let her hear your situation and make an initial offer. You may qualify for a better program than your research was able to find. If you get a better deal, you might want to take it. If the deal is not as good as being reported from your online research, ask the agent if she can do any better. Explain you were looking for a specific payment or interest rate and that would make the payment comfortable for your budget. Don't mention you found it in a forum or on the Internet. This might make the agent less likely to work with you.


    Enjoy the monthly savings.

Monday, June 17, 2013

Debt and Collateral Recovery

Debt and Collateral Recovery

When you apply for a secured loan, you must provide your lender with collateral. Your collateral can be your home, car or retirement accounts. Secured loans often come with a lower interest rate because they present less of a risk for the lender.


    In the event you fail to meet your financial obligations to your lender, the lender reserves the right to repossess your collateral as payment for the debt. If, for example, you pledged your home title against a secured loan, the lender may force you into foreclosure in order to recover the amount you owe. If you pledged your car, your lender has the legal right to repossess the vehicle.


    If the value of your collateral is not enough to satisfy the full amount you owe, the lender may file a lawsuit against you for the balance. Should the court decide in favor of the lender, it will grant the lender a judgment. In many states, court judgments give lenders the right to garnish your wages or seize your bank accounts.


    Even if you did not pledge any of your assets as collateral on a loan, your creditor may still be able to seize collateral through a lawsuit. A successful judgment in many states gives unsecured creditors the right to place liens against your personal property and subsequently seize the property.

Can a Wage Garnishment Be Stopped While a Small Claims Case Is in Dispute?

Stopping wage garnishment is difficult. Garnishment is a legal order allowing a creditor or debt collector to freely withdraw funds from a debtor's bank account or paycheck for an unpaid debt. The Internal Revenue Service and state tax collectors can also garnish bank accounts and paychecks. It is possible to dispute garnishment orders, but usually the garnishment continues while a court considers the dispute.


    Garnishment often occurs after a debt collector wins a lawsuit alleging that a borrower failed to pay a debt. Lawsuits are common in credit card debt, with debt collectors often winning default judgments when the debtor fails to show up in court or respond to the suit in writing. The judgment is a legal order requiring the debtor to pay a specific amount of money. If the debtor does not pay the judgment, the debt collector can request garnishment. State and federal tax collectors can garnish bank accounts or wages without a court hearing or judgment.


    Banks and credit unions must comply with garnishment orders, and they do so by freezing the debtor's bank account without warning. Employers must also immediately comply with court orders for garnishment. Bank garnishment shuts off all access to the account holder, except for deposits. Wage garnishment forces employers to send a percentage of the employee's paychecks to the debt collector each payday.


    Debtors can challenge garnishment through the courts through an appeals process. The appeal must specifically challenge the garnishment order. A small claims dispute not directly related to the garnishment will not stop the garnishment.


    A consumer affairs attorney can file legal motions to end garnishment by filing documents called a Claim of Exemption form and a Petition for Appeal. A debtor can also file the forms, but an experienced attorney may provide the best chance for a successful outcome. The legal motions can lead to an end to the garnishment or a reduction in the amount garnished. However, the garnishment will continue until a judge in the case makes a ruling on the dispute. A debtor can dispute the garnishment by arguing that certain money in his bank account, such as Social Security payments, are exempt from garnishment or that the garnishment makes it impossible for the debtor to afford food and shelter.


    Ending garnishment is also possible through direct negotiation with the party holding the garnishment order. The tax agency or debt collector may agree to lift the garnishment order if the debtor agrees to pay the amount due in full or commit to a payment plan or settlement agreement.

Sunday, June 16, 2013

Definition of a Debt Management Plan

When you find yourself in a large amount of debt, you may be tempted to take drastic actions, such as filing for bankruptcy or settling your debt. Instead of going to such extremes, you may want to look at a simpler option known as a debt management plan.

What is a Debt Management Plan?

    A debt management plan is a type of system that involves paying off your debts over the long-term. Setting up this plan typically includes negotiating lower interest rates on your credit accounts. You then make one monthly payment to the debt management plan and all of your creditors are paid out of this money. One of the typical criteria for getting involved with a debt management plan is that you do not accumulate any more debt while you are in the plan.

Who Offers These Plans?

    In most cases, credit counseling services are the ones who offer this kind of plan. A credit counseling service looks at your situation and offers some options for you to consider. The service typically recommends a debt management plan if your situation is not bad enough to warrant bankruptcy. The credit counselor then can set up the plan for you and start accepting payments from you. You will pay money into an account with your credit counseling service. Then, the credit counselor pays your creditors for you and also keeps a portion of your payment as a processing fee.

Time Frame

    When you enroll in a debt management plan, you should plan on being a part of it for several years. For instance, most debt management plans are set up to last for somewhere between three and five years. You make a single payment every month and then the credit counseling service deals with making the multiple payments for you throughout the month. This will continue until you end your participation in the plan or until you pay off your debts.

Possible Scams

    Even though many credit counseling services are legitimate companies, some are nothing more than a scam. These scams may collect your money from you and then never make the payments for you. When this happens, it hurts your credit because your payments are not being made. Some companies also have hidden fees that you may not know about when you make your payment to the plan. Companies in this market have even been known to lie about having non-profit status to create trust. Before signing up with this kind of company, it is important to look at its track record in the industry.

Can Creditors Take Money From My Account After I Write a Check?

Creditors cannot continue to take money from your account after you write a check---unless you authorize it or they receive permission from a civil court to garnish your bank account. Debt collectors often use account information from a personal check to identify a debtor's bank account. That gives them the information they need to pull money from the account after a judge signs garnishment orders. However, many steps are necessary before that happens.


    Months or even years can pass before a delinquent debt reaches the status of a garnishment order. Credit card companies usually close accounts and list them as charged-off after payments fall six months behind. Stepped-up collection efforts begin from there, with the account sold or assigned to a debt collection agency. If the first agency cannot collect, the account may move to other agencies over several months. At some point an agency may file a lawsuit, leading to a monetary judgment signed by a judge. The judgment requires the debtor to pay a specific amount, with garnishment possible if the debtor does not do so.


    Garnishment gives the debt collector the right to withdraw money from the debtor's checking account. However, it is up to the debt collector to find the debtor's banking information. The easiest way for that is to review personal checks the debtor previously submitted for payment. Garnishment can begin once the debt collector has the banking information and a court order.


    Banks must agree with a court-issued garnishment order, and they are not required to notify the account holder. Garnishment freezes the account, with the account holder allowed only to make deposits. Checks written on the account will bounce and the banking system will block the debtor's ATM card for payment transactions. The garnishment usually remains in place until the debt collector receives full payment for the judgment.


    Negotiating directly with the debt collector is one way of removing the garnishment. The debt collector may release the garnishment order in exchange for regular monthly payments from the account by electronic transfer. Some debtors choose to simply stop using the checking account and have their paycheck electronically deposited onto a prepaid debit card.


    Bankruptcy immediately stops garnishment through a court order called "the automatic stay." However, bankruptcy is an extreme debt management strategy and is best reserved as a last resort. The debtor must include all debts in bankruptcy---and not just the debt resulting in garnishment. Bankruptcy information remains on credit reports for 10 years.

How to Lower APR Rates on Credit Cards

Interest rate increase restrictions on credit cards are about to go into effect, thanks to new governmental standards. Before those restrictions occur, however, many card companies may begin increasing rates in an attempt to maximize their profits before the restrictions take hold. But there are several methods you can use to reduce your rates.


How To Lower APR Rates On Credit Cards


    Keep a low credit-to-limit ratio. For instance, if you have a card limit of $1,000 and you typically carry $200 a month on the card, you have a relatively low debt-to-limit ratio of 20 percent. Mention this to your card company. Users who are able to better manage their available balances show their card company they are a lower risk and, therefore, typically receive better interest rates.


    Request a balance increase before requesting a better interest rate. Many card companies want to see how their users can handle higher credits before they lower the rate. The principle behind this is simple: If you are responsible with a higher credit limit, you are less of a risk.


    Tell your credit card company that you have lower interest rates on cards you carry from other companies. Include information about your payment history, the credit limit you have and the debt-to-limit ratio of your card with that company.


    Ask for a lower rate regardless of your history. According to Bankrate, a significant number of credit card users saw an instant reduction in their interest rates by simply asking. Be persistent. If you don't receive the reduction on your first call, call back after a short period of time.


    As a last-ditch effort to find a better rate, find another card. Websites such as cardoffers.com and bankrate.com can help. Tell your current provider you will be changing to a new provider if they can't lower your rate. If they won't budge, sign up for the new card and call to cancel your old one.
    Keep in mind that it's possible to find a card from the same provider with a lower rate.