August 2013 ~ Credit And Debt Management

Saturday, August 31, 2013

Will Debt Consolidation Affect a Spouse's Credit?

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If you or your spouse are in financial trouble, debt consolidation may provide some relief. However, if you consolidate joint debt, or you jointly enter into a debt consolidation agreement, this will affect both your credit as well as your spouse's. If the debt is in the name of only one spouse, he can prevent damage to his spouse's credit by handling consolidation efforts on his own.

Credit reports belong to individuals, not couples. Unless the couple takes out credit cards or loans together, are joint defendants in a lawsuit, or file bankruptcy together, the information on one person's credit report won't end up on the credit report of her spouse. Likewise, your credit score is based on the information in your reports, not information belonging to your spouse.

Debt consolidation is a way to manage large amounts of high-interest debt from multiple creditors. There are three primary ways of consolidating debt. The first is to take out a debt consolidation loan at a lower interest rate than the existing debt. You'll use the loan to pay off all the debt and then simply pay off the loan over time. The second option is to take out a high limit, low interest credit card and transfer your credit card balances to that card. Again, you'll pay this card off over time at the lower interest rate.

The third debt consolidation option is a debt management plan. Many credit counselors offer this service, though there are some stand-alone debt management firms as well. Your credit counselor or debt management plan representative negotiates lower interest rates and minimum payments with your creditors on your behalf. Each month you make a single payment to the credit counselor, who then disburses the funds to your creditors. If you, take out a debt consolidation loan or credit card or enter into a debt management plan on your own, your spouse's private finances will not be affected unless you live in a community property state.

In a few states, community property rules apply to the debts and assets of married couples. While community property debt laws vary from state to state, a married person who incurs debt shares that debt with her spouse. In such cases, if a wife takes out a debt consolidation loan or low-interest credit card and then defaults on its repayment, her husband could be held responsible for paying that debt. Once the creditors begin to go after the husband, listings from collection agencies and public records like court judgments could end up on his credit report.

When a couple applies for credit jointly, they are both responsible for repaying the debt even if one spouse is the primary beneficiary of the credit or money received. In addition, lenders will usually request credit reports from both spouses and consider them together when making a decision. If one's spouse is paying off a debt consolidation loan, the lender will take the couple's total indebtedness into consideration.

How to Get Rid of an IRS Tax Lien

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The IRS has the right to place tax liens on your property if you owe federal taxes (Federal Tax Liens). While some may be able to prevent the IRS from putting a lien on their property, others are not so fortunate. IRS tax liens can be a burden if you are trying to obtain credit or sell your property.

Instructions

Negotiate with the IRS to get an installment agreement. This agreement will allow you to pay a down payment on the taxes that you owe and pay off the debt by making monthly payments. If you enter into an installment agreement and maintain your end of the deal, either immediately or within a certain time period, the IRS may remove the tax lien. However, if you fail to meet your obligations, the IRS may file the tax lien again, and you may not be so fortunate to receive a deal such as an installment agreement.

Pay or settle the tax lien. If you have the ability to do so, pay the debt owed to the government. If not, get in contact with the IRS, which can be done by visiting their website www.irs.gov or calling them at 1-800-829-1040, and see if they are willing to settle the debt (IRS). In this case, the government may be willing to take a portion of the taxes owed and mark the tax lien paid or settled. Either way, you may be able to obtain credit more easily, as well as sell your property, without any funds having to be paid to the government.

Submit a dispute to the credit bureau agencies. If your tax lien is paid and it is not showing this on your credit report, you need to have it removed. Under the Free Credit Reporting Act, the credit bureau agencies are obligated to investigate any dispute you send to them. If you send in receipts showing you paid or settled the debt, the credit bureau agencies must mark the tax liens paid or remove them from your credit report. This will prevent lenders from knowing if you have had a tax lien. Even if the tax lien is not paid or settled, you may be able to remove the tax lien from your credit report. To do so, you can send in a dispute to the credit bureau agencies to investigate the tax lien. If the government does not provide validation of the debt you owe within 30 days, the credit bureau agencies must remove the tax lien from your credit report.

Do You Have to Sell Your House to Settle Credit Card Debt After Death?

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Dealing with the death of a spouse or a loved one is difficult without the additional worry of financial matters. Many spouses struggle with how to deal with the remaining debt after the debt of a spouse. Losing one income, and deciding the best way to care for your family, are all factors in deciding what to do after your spouse dies.

After someone dies the estate he leaves behind must stand for his debts. This means that any assets he has including the house, investments and money in the bank must be used to pay off outstanding debts. After all the assets have been liquidated and applied toward debt, any remaining debt will be forgiven. If you are a co-owner on the house you will be forced to sell the house or refinance to give the estate his half of the assets to cover his debts.

The death of a spouse does put your home at risk. You need to determine if you can take on the debt by yourself if you want to keep your home. You can use life insurance money to pay off the mortgage or any outstanding creditors. State laws vary in regard to credit card debt and marriage, and you might be responsible for all of the credit card debt whether or not it was in your name. Selling the house and clearing the debts may be the best option for you, if you cannot afford to make the payments on just your salary.

After the death of a parent it is common for the estate to sell the house to stand for the estate. This will take care of any outstanding debt your parents may have. After the debt has been settled the remainder of the estate can be divided among the heirs or children. The executor will make the final decision regarding whether selling the house is necessary.

The executor of the estate will need to send a copy of the death certificate to all creditors along with a letter explaining that the executor will be in touch after he has settled the estate. The executor will sell the assets and divide the proceeds among creditors. If there is not enough money left to cover the outstanding debts, the executor should write to creditors explaining there are not enough assets to cover the debt and any remaining debt will be forgiven. If there are assets left after the estate is settled, they will be divided among the children and the heirs.

Is it Smart to Pay Off Credit Card Debt With a Line of Credit?

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People with a lot of credit card debt often look for ways to consolidate that debt to pay it off or lower the interest rates. One way to pay off that debt is through a line of credit.

A line of credit is the amount a bank or other lender will loan a person without additional approval. A person is given checks to spend against the line of credit at different times. Lines of credit to pay off debt often come in the form of home equity lines of credit.

Lines of credit will often be approved for more than the amount of credit card debt, so you could be enticed into spending more and going further into debt. A lot of lines of credit also advertise a lower interest rate, but then add on hidden fees causing you to pay more in the long run.

A line of credit can consolidate a bunch of credit card debt into one easy payment, often with a lower interest rate.

Paying off credit cards with a line of credit does not eliminate the debt, it just consolidates it and generally reduces the interest rate.

Instead of using a line of credit, you can work with credit companies to settle the debt for a lower rate if you are behind on payments.

What Happens if I File for Bankruptcy and My Wages Are Garnished?

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If you are working under a garnishment order, a portion of your wages are being taken out of your paycheck each pay period to satisfy a debt. If the garnishment is putting a strain on an already tight budget and you have additional debts that you do not have the ability to pay, you may wish to consider filing for bankruptcy protection. Immediately upon the filing of a bankruptcy petition, an automatic stay will take effect and the garnishment must stop.

A creditor must follow state laws and procedures to obtain a garnishment in most cases. Federal debts are the exception to this rule. A creditor must first win a lawsuit in court which will result in a monetary judgment being entered against you for the amount you legally owe the creditor. If you do not immediately pay the full amount of the judgment, the creditor may return to court and ask for assistance enforcing the judgment. Wage and bank account garnishment are often available to enforce a judgment. If the courts grant the request for wage garnishment, an order will be sent to your employer ordering him to hold back a certain amount or a percentage of your wages and forward the money to the court to help satisfy the judgment.

The United States Bankruptcy Code provides the rules and regulations under which an individual, partnership or corporation may file for bankruptcy protection. An individual may file under Chapters 7, 11, 12 or 13 of the code. Chapter 7 protection requires the petitioner to pass a means test and is therefore usually reserved for low-income petitioners with few assets. A Chapter 11 is generally filed by a partnership or corporation but may be used by an individual who has a business to protect. Family farmers and fishermen may use Chapter 12 to protect family fishing or farming ventures. Individuals who earn too much to qualify for a Chapter 7, or who have non-exempt assets they wish to keep, must file a reorganization under a Chapter 13.

When a bankruptcy petition is filed, an automatic stay is entered by the court. The petitioner is not required to request one; it is something done automatically in all bankruptcy cases. All creditors are notified of the filing of the petition as well as the automatic stay. During the time that the automatic stay is in place, creditors may not initiate or continue any collection action for debts of the petitioner -- including wage garnishments. The automatic stay will usually remain in effect until the bankruptcy is discharged unless a creditor ask for the stay to be lifted and provides a valid reason for lifting it to the court.

All bankruptcy petitions begin by filing the petition in the appropriate court. Bankruptcy falls under the jurisdiction of the federal courts and therefore the petition must be filed in the federal court in the jurisdiction where the petitioner is domiciled. The U.S. Courts website provides forms and resources for filing bankruptcy; however, bankruptcy is highly technical and consultation with an attorney is advisable.

How to File a Lien in Missouri

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Unfortunately, creditors filing a lien against a debtors real estate, becomes the only alternative to recoup monies owed to that creditor. This means that once the lien is in force, the debtors real estate cannot be sold legally without satisfying the debt first. It will then become free and clear with no encumbrances on the title. In order to file a lien, certain requirements have to be fulfilled by the creditor, such as a true claim on the debtors real estate with contracts and papers to back up that claim. Read on to learn how to file a successful claim in the great state of Missouri.

Instructions

Gather any papers and contracts together which will back up your claim when you get to the county recorders office. The filing officer will want to take a look at all you have brought with you in order to evaluate your claim. It is up to the filing officer to accept or reject your claim. If the officer accepts your claim, then a lien will be filed against your debtors property.

On rejection of your claim: If your claim at the county recorders office is rejected, this just means you will need to get permission from the court to file your lien. Go to the clerk of the court and state your claim against the debtor. There will be a court date set for a hearing on the matter. If the court finds the evidence is in your favor, then the judge will issue you with a court order to file with your lien.

Ensure that your claim is a valid claim as the so-called debtor may sue you in court of law for filing an invalid lien against his real estate. This means you would be required to pay a minimum of $5,000 to the so-called debtor for his inconvenience. Take a look at the statutes in the resource section of this article for details.

Do You Receive a 1099 Form for Unpaid Credit Card Debt?

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It is possible to receive a 1099 tax form for unpaid credit card debt. Example: You settle a $2,500 credit card balance for $1,000 -- a savings of $1,500. According to the Bankrate.com website, the IRS will treat the $1,500 as income because you never paid it. The 1099 C will be issued by your creditor and must be addressed on your next federal tax return.

The IRS form "Cancellation of Debt Form 1099 C" is a short document similar to a W-2 wage and tax statement. It lists the creditor's name and your name, along with the amount that was unpaid. You could receive the 1099 C as a result of a settlement or a write-off by the credit card company. A write-off is an internal accounting term used by credit card companies when they close an account because of non-payment. Copies of the 1099 C are sent to you and the IRS. Bankrate.com says debt forgiveness of $600 or greater is eligible for a 1099 C.

Bankrate.com says potential tax implications should be an important part of any debt settlement strategy. After consulting with your accountant or tax adviser, you may decide to extend your debt strategy over more than one year to lessen the impact on your taxes.

The IRS does allow for some exceptions for reporting income from unpaid credit card debt. One of the most common exceptions is insolvency, according to NOLO, a legal website. Insolvency means that you were financially insolvent before the creditor decided to settle or write off your debt. To declare insolvency, your debts must exceed the value of your assets. Example: Your assets are worth $50,000 and your debts total $65,000, resulting in an insolvency of $15,000. You settle a debt resulting in a $9,000 savings for you. According to NOLO, none of that money has to be declared on your tax return because the $9,000 is below your insolvency threshold. IRS Form 982, "Reduction of Tax Attributes Due to Discharge of Indebtedness," must be filed if you are declaring insolvency. See a tax adviser for a complete understanding of this exception.

Paying your credit card debts in full will prevent you from receiving a 1099 C. You can accomplish this by making payments as agreed, or by negotiating a special payment plan with lower monthly payments.

NOLO says you should always account for a 1099 C on your taxes -- unless you are filing for an exception. Not including a a valid 1099 C on your return could lead to a complete audit of your taxes, the site says.

Debit Card Policies

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A debit card is similar to a credit card, in that you can use it for various kinds of payments (live, over the phone, or via Internet) and store purchases. Crucial differences exist, however. A debit card is linked directly to a cash account, usually a bank account, from which funds are deducted immediately. No revolving debt is created and no interest is charged. Debit card use use has advantages and dangers associated with it.

Debit cards allow you to make purchases as well as cash withdrawals from automated teller machines (ATMs). The ATM, if it does not belong to a system used by your bank, will charge a fee for the transaction. In addition, your bank may levy a fee.

Some retailers will allow you to use the debit card for a purchase as well as a "cash-back" withdrawal of funds. A personal identification number associated with the card is required for this kind of transaction. No fee is associated with a cash-back transaction.

The pre-paid debit card is charged with money by the store that sells it to the consumer, and can be used for purchases at that store until the balance on the card runs to zero. Online prepaid debit cards are purchased and used exclusively for Internet transactions. These cards can also be used by a company to transfer money to employees, freelancers, and vendors.

Debit cards are widely used in place of written checks for payments for goods and services. Whereas checks carried a "float" in which several days passed before the money was deducted from the account, debit cards withdraw the money immediately, which avoids the danger of a bounced check. In addition, personal information about the user does not appear on the debit card, as it does on the check.

Most banks allow their clients to withdraw a limited amount of money over and above their account balance when using a debit card. A fee is charged for the overdraft, but the customer is compensated with convenience if funds are needed for an emergency. If a user is not aware of the account's overdrawn status, she may be charged a fee for each transaction, which can result in hundreds of dollars of fees owed to the bank.

Debit cards are less secure against fraud than credit cards. Federal law limits liability for a fraudulent transaction with a credit card to $50; however, no legal limit is in place for liability for fraudulent use of the debit card. If the card number is stolen and used, the bank account can be reduced to zero, with little or no compensation offered by the bank. Timely notice to the bank of fraudulent use of your card can greatly limit the amount of your loss and increase the amount of the loss the card issuer will cover.

How to Separate a Deceased Spouse From Credit Reports

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If you have recently lost your spouse, you will need to take steps to secure your credit rating as soon as possible. Begin by removing your spouse from your credit report. While some debts may be waived following a spouse's death, keep in mind that you may still be obligated to pay some of your spouse's debt.

Instructions

Contact the three credit bureaus (Equifax, Experian and Trans Union) in writing to inform them of your spouse's death. The letter should include both of your Social Security numbers and full names, an email address, the date of death and a copy of the death certificate.

Have each credit bureau put an alert on the account so that you can be notified if anyone tries to open an account in your spouse's name. You may also request your spouse's credit report for your records.

Contact all of your spouse's credit card companies and inform them of your spouse's death. They will inform you of any additional steps that you need to take.

Understand that with any joint account, you are still responsible for paying off the debt. Continue to make all payments on time. Credit card companies cannot close joint accounts because of the death of a spouse, however, they will allow you to open a new account in your name.

For any cards issued solely in your spouse's name, contact the credit card companies and request that they close the account.

Can I Get Money If a Company Put a Collection on My Credit Report That Was Not Mine?

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Federal law requires creditors and debt collection agencies to report credit information truthfully. When creditors and debt collection agencies violate this regulation, consumers have the right to sue in civil court. The law allows debtors to pursue creditors for actual damages suffered as a result of the false credit information as well as costs associated with filing the lawsuit.

It is illegal under the terms of the Fair Credit Reporting Act for a creditor to report false information to any credit bureau, according to the Federal Trade Commission's website. If you believe a negative notation is on your credit report in error, your first step is to contact the reporting bureau showing the notation to investigate the debt. The Fair Credit Reporting Act requires the credit reporting bureau to investigate the validity of the contested debt within 30 days of receiving your written request. If the bureau determines the notation is incorrect, the bureau immediately removes the negative notation from your credit report.

Federal law permits you to sue a creditor or debt collection agency in civil court for any damages you suffer as a result of false credit notations and illegal debt collection practices. Damages may include lost wages, payments due to increased interest rates on other accounts and the loss of other credit opportunities due to an falsely damaged credit score. You must show these losses are a direct result of the creditor or collection agency's illegal actions for a court to award you actual damages.

A judge may award you up to $1,000 even if you can't prove you've suffered actual damages from the creditor's false reporting, according to the Federal Trade Commission's website. This award is a kind of punitive damage designed to deter the creditor or debt collection agency from committing the act again in the future. A judge may also award you court costs and filing fees, which means the creditor or debt collection agency must pay your attorney and any fees associated with your lawsuit filing.

A group of consumers may join together to file a civil lawsuit against a creditor or debt collection agency. The group may seek damages up to $500,000 including filing fees and court costs. The ceiling of the monetary award for damages in a group lawsuit is higher than an individual lawsuit to reflect the need of a larger group of debtors and to punish the creditor or debt collection agency for a perceived pattern of behavior in reporting false credit information and illegal collection practices.

Should You Consolidate Debt?

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Debt consolidation is an effective way to reduce your payments and pay down your balances faster, and once you've paid off the consolidation loan and eliminated your balances, you can use extra income to increase your personal savings. But while consolidation helps simplify debts, this method isn't right for everyone. Weigh the factors and decide if consolidation is right for you.

Debt consolidation is the process of taking out a new loan and using the cash from this loan to pay off your present balances. Debts included in a consolidation can include credit card bills, medical bills, auto loans, student loans and other installment payments. Consolidation benefits consumers who dislike juggling multiple accounts each month. Combining debts into one simplifies personal finances and creates one bill and one payment.

Before making the decision to consolidate your debts, consider your present interest rate on credit cards and other loans. To benefit the most from a consolidation, it's imperative to receive an interest rate on the loan that's cheaper than your current rate. The interest rate impacts the monthly payment, and acquiring a better rate can save you money on debt payments each month. Get a debt consolidation quote from at least two banks. Compare rates in relation to what you're currently paying and assess the savings. Pick the loan with the lowest rate and best terms.

Qualifying for a loan to consolidate your debts will require a good credit history. In other words, a good candidate for a debt consolidation loan is someone who pays his bills on time. Several late or skipped payments and other credit issues such as collection accounts can harm your chances of qualifying for financing. Check your credit report and score before applying for a loan. The higher your score, the better your odds of getting a loan. Dispute any inaccuracies on your credit report and have these errors updated before applying for a loan. Get your credit report from Annual Credit Report and order your personal score from Myfico.com.

If using a consolidation loan to pay off credit card balances, only apply for a loan if you don't plan on using the cards in the future. Too often, consumers pay off credit cards with a loan consolidation, and then reaccumulate balances on these credit cards. It can take a few years to pay off a debt consolidation loan, and if you acquire new debt on credit cards, you could essentially double your debt and complicate your finances. After paying off cards, store the cards in a place that's not easily accessible or destroy the cards with scissors or a shredder.

How Lenders Report to Credit Reporting Agencies

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When a lender agrees to give you a loan, credit card or other form of credit, that lender takes a risk. The risk is that you won't pay the money back in the manner you agree to. To protect against these risks, lenders rely on credit scores and credit reports to make their decisions. These are based on information reported to the credit reporting companies through different methods.

When it comes to consumer credit scores, there are three main companies, each of which has its own credit scoring system and methods of collecting information: Equifax, Experian and TransUnion. These companies deal in information, collecting it, organizing it and assigning numbers (credit scores) based on it. How a credit company gathers its information is up to each company, though they generally rely upon creditors who report borrower behavior to the company.

Each lender reports borrower behavior to one or or more of the credit reporting companies. Some companies, for example, have software that automatically sends borrower data to the credit reporting bureau. Other companies, such as those with few accounts, report information less regularly. These companies sometimes use intermediaries, such as collections agencies or credit reporting service companies, that report information on behalf of their customers.

Like any other process, the credit reporting process is subject to mistakes of various kinds. Many creditors report vasts amounts of information about borrowers, and these data entry and reporting procedures can result in mistakes large and small. You have the right to not only inspect your credit report every year, but also to demand a credit reporting company change erroneous information.

Credit reporting companies do not only rely on lenders to provide information about borrower behavior. They also collect data from publicly available sources. For example, if you have a lawsuit filed against you, this lawsuit is public information. If you end up losing the lawsuit and the court files a judgment against you, the credit reporting company can access that information and use it as part of your credit report.

Debt Management and Repayment Plan

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The big caveat about any debt management and repayment plan is that you have to stick with it. Executing a debt or financial management plan often involves more than plugging in the numbers. You have to commit to a lifestyle change that puts paying off debt ahead of other things like eating out or buying new items. That means creating a budget, sticking religiously to a payoff plan and even taking more work, if necessary.

The first step to tackling debt is to write down exactly what you owe, to whom and what the interest rates are. Put the information in a spreadsheet or money management program so you can keep track of progress as you pay debts down.

Create a budget. There are several budget formulas. One recommended by MSN Money's Liz Pulliam Weston allots 50 percent of your after-tax income to must haves including mortgage or rent, utilities, car payment, food, tuition and any debts you contractually have to pay a certain amount on each month. Thirty percent of after-tax income is for things you want. Twenty percent of after-tax income goes to paying debts and savings. You can adjust this ratio to pay more on debts if you're in a hurry to pay them off. Even if you're focused on paying debts, most budget experts such as Pulliam Weston recommend an emergency savings account so you don't have to dip into credit cards again.

If you've made a budget and you don't have enough income to cover expenses and debt payments, you may have to figure a way to cover the gap. This might mean cutting something out of your budget or cutting many little things out of your budget -- like buying lunch out every day. On the other hand, it might mean getting a second, part-time job. Either way, you need to find a way to bring into alignment what goes out and what comes in.

Pick an approach for paying bills off more quickly. You can use the snowball approach, which has you pay off smaller bills first, then roll the amount you paid on that bill into the next bill until all your bills are paid off. You can also use the avalanche approach which tackles bills with highest interest first, therefore saving money on interest. Either way, keep track of the debt amounts going down. It encourages you. In addition, put credit cards away until the debt is paid off. If that takes more than a few months, you may want to make a purchase here and there to keep the card active for credit rating purposes. However, pay the purchase off immediately.

Who Pays Personal Loans Upon Death?

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After the death of a loved one you may be wondering who is responsible for paying off the deceased's personal loans. Debt is not inherited and will not be passed on to the next person as long as you are not a cosigner on the loan. However the estate will need to pay for the loan.

The executor of the estate will be responsible for settling any debts the deceased left behind. This means that any assets the person left behind must be applied to any remaining debts. The executor is in charge of selling any assets such as the home or cars the deceased owned and dividing the money between the remaining debts. The executor will need to send a copy of the death certificate to the creditors along with a letter stating that the estate has paid all it can towards the debt.

If there is not enough money in the estate to pay off all of the debts, then the remaining amount will be forgiven. Debts with assets attached to them such as a mortgage or car loan will take the proceeds from the sale of those items. Any remaining money will be put in the pool to pay off other debts. Savings will need to go towards any debts that remain. Generally the executor will add the total debt and the total assets and give the same percentage to each debt. After the estate is settled the executor will need to send a letter to the creditor stating that the estate is settled and that any remaining debt needs to be forgiven.

If a personal loan has a cosigner on it, then the cosigner will take on the responsibility of the loan. It will not transfer into the estate the same away a debt without a cosigner will. When someone cosigns on a loan they agree to pay off the money if something were to happen to the other person. If you are a cosigner you can try to have the estate cover a portion of the debt, but generally this will take last place on the list of debts. Additionally the bank will not forgive outstanding balances.

Any life insurance benefits that are paid out will not be included in the estate. Life insurance will go to the beneficiary named on the policy and does not need to be applied to outstanding debts. You can use the money to pay off the debts if you choose to, but you are not legally obligated to. For example you may choose to use life insurance money to pay the mortgage so the remaining family can continue to live in the home.

Frequently Asked Questions about Credit Cards

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A credit card can be a convenient way to pay for everyday items, but it requires responsibility. According to MSN Money, improper use of your credit card can cause your credit rating to slip below 620, which would make it difficult to get car or home loans. Get the answers to the frequently asked questions about credit cards before you start using one.

If you or someone you know is looking into getting a first credit card, the number of choices can be overwhelming. According to online financial resource Bankrate, finding your first credit card can take some time. Find a bank or credit card company that offers a low interest rate and apply. Do not apply for more than one card at a time as multiple credit applications can bring your credit down. Try three cards and see if you get one. Once you get accepted by one company, stop applying. If the credit card companies will not give you your first card, try a department store card or a secured credit card account. A secured credit card account is one where you need to have the funds in your bank account to back up your spending.

To build your credit and qualify for more credit in the future, you need to use the credit you have. According to MSN Money, the ideal amount of credit you should be using at any time is no more than 30 percent of the card's limit. When you get over that amount, pay your card back down before using it. By using up to 30 percent of your card's limit at a time, you are showing that you can maintain your credit accounts without maximizing them, and that you are a responsible consumer.

If you realize your card is missing, or it has been stolen, call the customer service phone number on your credit card bill immediately. Your credit card company will cancel your current account and issue new cards with a new account number on them. Your balance from your current account will transfer to the new account.

As of September 2010 there is no cap on the interest rates a credit card company can charge. According to a 2009 article in the New York Times, the Senate shot down legislation that would have capped interest rates at 15 percent. Credit card companies must notify card holders in advance about pending rate hikes and give consumers the opportunity to opt-out of the hike, according to the Credit Cards website. If you opt out of a rate increase, you will no longer be able to use your card, but you will be able to pay off the balance at the old interest rate.

It is important to understand the difference between a credit and debit card. When you present your card to a clerk at a store, that clerk will normally ask you if your card is a credit or debit card. According to educational financial resource EdFund, a credit card offers spending based on a revolving line of credit that is not tied to any source of income. A debit card is tied to your bank account and the amount you can spend with a debit card depends on how much money you have in the bank.

How to Transfer Assets & Property Titles After Death

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When a person passes away, she often leaves behind a variety of assets the title to which must be legally transferred to her heirs or beneficiaries. The title to a car must be converted to show the heir owns it legally for example, and the deed to land or a home may need legal adjustments as well. The process for legally transferring assets and titles to a beneficiary or heir is achieved by going through a probate court process.

Instructions

Talk to a state probate attorney or visit the local court house to open a probate case.

Compile a list of the decedent's assets and debts. Generally a court assigned or personally assigned estate executor takes care of this step.

Send death notifications or wait for the estate executor to send all death notices that are required by law in your state. Some states require newspaper notices to be published and a set period of time to pass so that all legitimate creditors have time to list their claims to the estate.

Wait for the probate judge or estate executor to pay off all debts and finalize estate settlements.

Distribute property and assets to beneficiaries according to the decedent's will. This requires waiting for the judge to finalize property and asset transfers, after which the executor changes titles and ownership documentation as needed for physical assets.

Does Money Owed to a Landlord Come Before an IRS Lien?

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Generally, from a legal standpoint, you would not pay money owed to a landlord before an IRS lien. The IRS has the power to potentially seize any and all property to collect monies owed. If you do not have enough money to pay your bills and decide to file for personal bankruptcy protection, you may be able to temporarily avoid paying back rent or back taxes owed.

A federal tax lien is the legal instrument securing the government's claim to your assets for back taxes owed. Once the IRS files notice of the lien, your creditors will be publicly notified of the government's claim against all your assets, including those acquired after the lien is filed. Generally, the IRS lien becomes the senior (leading) claim against your assets in the event of personal bankruptcy or foreclosure, second only to the first mortgage holder if you are a homeowner. In the case of money owed to a landlord, the IRS lien takes precedence.

One of the few debts that typically cannot be discharged in a Chapter 7 personal bankruptcy is back taxes. If you owe money to the IRS and it files a federal tax lien against you, the lien attaches to all of your assets of value (car, house, jewelry), as well as your rights to certain assets (accounts receivable if you are a business owner). As a renter who does not own any real property, you may not have any assets of sufficient value for the IRS to pursue, but if you try to buy a house down the road, it is likely the IRS lien will still be found on your credit report and may hurt your chances of qualifying for a home loan.

Once you file for bankruptcy, an automatic stay goes into effect, which prevents your creditors from any further collection actions. The automatic stay may also prevent you from being evicted from your rental home, if the landlord has not yet gone to court to obtain an order of eviction against you. If the landlord already filed an order of eviction prior to your bankruptcy filing, the eviction cannot be stopped. There are two exceptions that may enforce the automatic stay: you pay the rent that would be due during the 30-day period after you file for bankruptcy; or you pay all back rent due, prior to filing for bankruptcy.

Generally, the IRS, state and local taxing authorities get the benefit of an automatic lien for any past due and unpaid taxes you may owe. It is typical for these taxing authorities to get preferential treatment. They may even be paid out of your savings, 401k or other assets ordinary creditors cannot reach. As previously stated, you may be able to have tax debt discharged, or eliminated, under Chapter 7 bankruptcy if you have no assets, but under Chapter 13, your tax debt is included in your repayment plan. Unsecured debts, such as money owed to a landlord, get paid last, if at all.

How to Improve Bad Credit Fast

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There are a few tips to improve credit fast. You will need to do a few simple things to get a higher credit score.

Instructions

The first step is to check your credit reports for errors. When your credit report is correct you need to focus on paying down your debt levels. The credit bureaus use a ratio of of debt to income as a major factor in computing your credit score. Paying down your debt levels will improve your credit and score quickly.

Pay on time. If you are late just a few times it can really hurt. Be sure to send payments with time to spare. This will give you an extra cushion if your payment gets held up in the mail.

Sometimes it will help your credit score to raise your credit limit. This will allow for you to have a lower percentage of credit usage and will help improve your credit. Make sure to keep on top of your credit and credit reports and get your score into a good range.

Does Oregon Allow Recourse After a Foreclosure?

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In a non-recourse state, you will not be liable for more than what your home is worth, when it is sold through a short sale or auction. A recourse state does allow a lender to pursue you for the deficiency amount, if the proceeds from the sale of your property are less than what you owe. Although identified as a non-recourse state, Oregon does allow recourse after a foreclosure in certain cases.

Typically, if a state is a non-recourse state like Oregon, a lender cannot pursue you for the difference between the balance on your mortgage loan and the proceeds from the sale of your property. Recourse states allow a lender to come after you for the difference (deficiency judgment). However, even in non-recourse states, particular types of loans -- refinanced purchase loans, second mortgages, home equity lines of credit and home equity loans -- are often recourse loans. Your loan contract should indicate whether the loan is a recourse or non-recourse loan.

The primary method of foreclosure used in Oregon is the non-judicial foreclosure, in which there is no court involvement. Judicial foreclosures, which proceed through the court system, are also allowed and are typically used in the absence of a power of sale clause in the deed of trust. In Oregon, the deed of trust is the document securing title to a property, and the deed remains with a trustee until the underlying mortgage loan is paid in full. A non-judicial foreclosure in Oregon requires the lender to provide notice of the proceedings, known as foreclosure by advertisement. Generally, it takes about six months to complete an uncontested foreclosure in Oregon, longer if you decide to fight it in court.

Usually when you buy a home in Oregon, and you sign the deed of trust or mortgage contract, you are giving your permission for the lender to sell your property in the event that you default on your loan, through a special provision called the power of sale clause. Whether Oregon will allow recourse after a foreclosure depends largely on the language set down in your contract.

Two factors primarily affect whether you will be liable for a deficiency judgment after foreclosure: whether you owe more on your property than it is worth or have substantial equity, and the language used to outline the terms found in your mortgage contract. If you owe more on your home than it is worth, the time and expense to obtain a deficiency judgment is usually not cost-effective, unless you have other substantial assets. Oregon does not allow recourse after a foreclosure for non-judicial foreclosures. Deficiency judgments (recourse) are not allowed for any residential deed of trust, regardless if it was a non-judicial or judicial foreclosure. In all other cases, an Oregon lender has the right to pursue a deficiency judgment if the sale of your property will not fully satisfy the mortgage debt.

How Long Do Inquires Stay on a Credit Report?

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When you apply for a loan, credit card or line of credit, the lender will conduct a credit check to determine how much of a lending risk you are and the level of interest you should be charged on the account. Unlike many other items on your credit report, credit inquires drop off your credit history fairly quickly.

A credit inquiry is a record of a credit check conducted by a potential lender. Applications for certain types of employment will also result in a credit check and an inquiry.

A "hard pull" is a type of credit check made by a lender or employer. It can temporarily lower your credit score by a small number of points. A "soft pull" occurs when you pull your own credit or when a company pulls your credit for marketing purposes.

Credit inquiries will remain on a consumer credit report for one to two years, depending on the credit bureau reporting the inquiry and the inquiry's purpose.

Inquiries remain on a credit report to provide potential lenders with information on your recent credit or loan applications. This can influence a lender's decision on whether to approve or deny your application.

Too many credit inquires within a short period give the impression that you are "shopping for debt." This makes you a higher lending risk because it suggests you may be having financial problems.

If you're shopping for a loan to purchase a new home or car, multiple lenders may request your credit report. All inquiries that are received within a 30-day period are treated by the credit bureau as one inquiry. These inquiries will not adversely affect your credit score if they were made in the 30 days prior to scoring.

How to Use Margin with an Online Brokerage

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Margin allows you to borrow money from your broker against securities in your account. Every broker has a list of marginable securities that you can borrow against and sets the maximum limits for borrowing.

Instructions

Select the margin feature when you open an online brokerage account. If you have a cash brokerage account, ask your broker how to add margin. Once it's approved, the use of margin is automatic: if you have sufficient collateral in your account and exceed your cash balance, your broker will automatically advance you the money.

Use margin to buy stocks online. Typically, you can borrow up to 50 percent of the purchase price. For example, if you have $5,000 cash in your account, you can buy $10,000 in stocks. You must be fairly certain that the profit potential of the stocks you are planning to buy is greater than the margin interest that you will be charged.

Check with your broker first to see if the stock you are interested in is marginable---some recent IPOs, thinly traded and foreign issues may not be.

Get additional leverage by consolidating your investments in a margin account. Other investments you own---mutual funds, bonds---may also be marginable.

Borrow against your holdings in an emergency. If you own $10,000 in securities, you can withdraw up to $5,000 in cash from the account (more against bonds).

Use margin judiciously. Leverage magnifies both gains and losses. You must maintain a 25 percent minimum equity in your account. If your account value declines below the minimum, you will get a margin call--a demand to deposit more cash or securities within three days or the broker will sell your holdings to cover the loan.

Get off margin as soon as the market goes into a correction. Most stocks decline in a correction; and declines are usually faster than run-ups. There is no reason to magnify your losses while waiting for a margin call.

How to Clean up and Remove Negative Information From Your Credit Report

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If you don't know what's on your credit report, allowing lenders, employers and credit card companies to run your credit is a game of financial Russian roulette. Consumers often assume that because they have a positive history of managing debt well and paying their creditors on time that they must have good credit. Unfortunately, reporting errors occur more frequently than most people realize. The U.S. Public Interest Research Group estimated in a 2004 report that roughly 79 percent of all credit reports contain at least one error. Clean up your credit report and increase your credit score by working to remove the negative information in your credit records.

Instructions

Visit the Annual Credit Report website and request a free copy of each credit bureau's credit report. The website is maintained by the credit bureaus themselves -- making it the only website approved by the Federal Trade Commission for providing consumers with their free annual credit reports. If you already pulled your free reports for the year, you can purchase your credit reports directly from the credit bureaus.

Make a copy of each credit report. Read through the copy of each report, checking for negative items, such as collection accounts, late payments or public records, that you do not recognize or that clearly reflect a reporting error. Highlight errors when you find them.

Write a short letter to each credit bureau explaining that you discovered information within your credit history that is incorrect. Mail a copy of your letter along with the copy of your credit report that contains the highlighted errors to the credit bureaus. Each bureau will then contact the company that provided the information and ask that the company verify its information's accuracy. If the company cannot do so or does not respond within 30 days, federal law requires that the credit bureau remove the item.

Read through the credit inquiries each credit bureau has on file for you. If you discover inquiries from banks, finance companies, credit card companies or collection agencies that you do not recognize, write the company a letter demanding that it contact the credit bureau and remove its inquiry. Inquiries stemming from a money transaction aren't inherently negative, but these "hard" inquiries lower your credit score by several points each and the damage can quickly add up.

Write a letter to each creditor whose entry contains one or more late payments. Request that the creditor remove the late payment record as a gesture of goodwill. Not all creditors will remove a legitimate late payment upon request, but some will do so for long-standing customers.

How to Raise Your Credit Score in 90 Days

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Ninety days is a reasonable time table for improving your credit score. Updates to your credit report are made by your creditors every 30 days, giving you plenty of time to make some moves with a 90-day plan. The bigger question is just how much you can expect your score to improve. Everyone's credit situation is different, with a number of factors used to compute your credit score. Among the considerations are your payment history, the type of credit you have, such as credit cards and loans, and your level of debt.

Instructions

Reduce the balances on existing credit card accounts to no more than 30 percent of the credit line on each account. Check your billing statements for the balances and then make payments. MSN Money reports that creditors like to see a large gap in your credit line and the amount of credit you are using.

Make payments to bring all of your credit accounts current, if necessary. This includes car payments, school loans and mortgages. Paying your bills on time and maintaining low balances are the two most important factors in improving your credit score, according to Privacy Rights Clearinghouse, a national nonprofit consumer information company.

Use old credit cards that that you may have paid off and put away. MSN Money reports that credit card companies may stop updating your accounts to the credit bureaus if you stop using the cards. Pull the cards out, make small charges and pay them off in full each month. The cards will start reporting again, which could help improve your score.

Get a copy of your credit report and score. View and print your report from Annual Credit Report.com. The site offers free credit reports under the terms of the Fair Credit Reporting Act. Order your credit score separately, for a fee.

Write letters to the credit bureaus disputing any errors or outdated information included on your credit reports. Bankruptcy information can be reported on your credit report for 10 years, and all other negative information can be reported for seven years. Write letters to the credit bureaus using the addresses on the credit reports. Removing outdated or incorrect information could boost your score.

Order another copy of your credit report and score after 60 days and again at 90 days to track your progress. You're entitled to three free reports every 12 months from Annual Credit Report.com. During that time you can order one free credit report from each of the nationwide credit bureaus -- TransUnion, Equifax and Experian. You must order and pay for your credit score separately each time.

Is a Credit Card Chargeoff an Option?

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You should avoid a credit card chargeoff at all costs. A chargeoff will lower your credit score, which is what other lenders use to determine your creditworthiness. Having a chargeoff on your credit report is weighted heavily by potential lenders. They will classify you as a higher risk and may deny you credit. If you are granted credit, expect to pay higher interest rates and fees.

The card lender will report your chargeoff to the credit bureaus. Payment history is a large component when calculating your credit score, so a chargeoff is the worst mark you can receive on your credit report. Other lenders use this information to determine your creditworthiness, in which case you may be denied a loan or be forced to pay a higher interest rate and fees and in some cases put down higher deposits. This becomes especially relevant when looking to secure a loan for expensive purchases such as house or car.

Even though your account is charged off as a loss to your lender, this does not stop the collections process. The credit card lender sells your bad loan to a third-party collections agency, which will make further attempts to collect the debt. This information may also show up on your credit report. If your debt is high enough, the collection agency may sue you, and you may receive a summons to appear in court. Failure to appear will lead to a default judgment, giving the collections agent the right to proceed to garnish your wages (if it is legal in your state).

You have several options to avoid a chargeoff. One option is to make minimum payments to avoid late fees. Another option is to settle with your card lender. You can also use a debt settlement service. If you settle your account after it has been charged off, your credit report will be updated to show "Charged-off-Settled" or "Charged-off Paid." Both are better than a simple chargeoff.

As a last resort, you do have an option to file a petition for bankruptcy to have your credit card debt discharged before it reaches chargeoff status. However, getting your credit card debt discharged is not certain. You must first pass a "means test" to determine eligibility. A bankruptcy filing will remain on your credit report for up to 10 years and will also affect your ability to borrow in the near term.

How to Hire a Debt Consolidation Company

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If you are in debt and considering consolidation, the following tips will help you get the best service from your debt consolidation company and avoid being scammed.

Instructions

Don't go with the first debt consolidation company you find. As when shopping for anything else, do you research before choosing a debt consolidation company. You have probably seen several companies advertising on television and online. Take down the names and contact information for all of the companies that catch your eye. As a general rule, you should probably contact at least three different debt consolidation companies before making your decision on whom to hire.

Talk to the Better Business Bureau (BBB). A good place to begin researching debt consolidation companies is the BBB's website, located at BBB.org. Make sure that the company you work with does not have any serious, unresolved complaints.

Talk to others who have used debt consolidation companies. If you have friends or family members who have consolidated debt, talk to them about the companies they've worked with. You may also want to look on Internet message boards to hear about others' experiences with specific debt consolidation companies.

Get everything in writing. Before you agree to work with a debt consolidation company, get a written copy of their policies and fees. Take the time to review it carefully and clarify any questions you have in advance before signing anything.

Make sure everything is clear. The debt consolidation process can be complex, so be sure that you understand all of the terms from the start. If your debt consolidation company is not helpful and up front in answering your questions, consider working with someone else. Remember that your financial health is at stake!

Free Debt Help & Advice

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Use debt settlement, credit counseling, debt consolidation or bankruptcy to eliminate your mounting debt. As of July 28, 2010, the United States Federal Trade Commission passed the Credit Card Debt Settlement Act, granting the growing number of distressed consumers relief from personal debt. This includes credit card debt, doctor bills, collection accounts and personal loans. It does not include alimony, mortgages or student loans.

You qualify for a credit card debt settlement program if you have more than $10,000.00 (U.S. dollars) in unsecured debt and can prove that you are experiencing financial hardship.

If you qualify, you can expect to eliminate up to 50 percent of unsecured debt with the aid of a professional debt settlement company.

The United States Credit Card Debt Settlement Act of 2010 has reshaped the debt settlement industry into a performance-based service. The result is that you can now obtain a free debt consultation with a debt relief specialist from debt consolidators like freedebtsettlementadvice.com, debtdecreaser.com or moneymanagment.org, for example.

A debt relief specialist will advise you on how to best create a plan to eliminate your debt based on your particular circumstances.

You can also contact:

United Debt Associates

425 N. Front Street

Columbus, OH 43215

U.S.A.

877-853-6466

Debt settlement will negatively impact your credit for up to six years, whereas a bankruptcy will negatively impact your credit for up to 10 years. In 2009, the average debt settlement was negotiated for 50 percent of the actual balance owed. You can expect to eliminate a substantial amount of your debt with the help of a federally approved debt settlement company. Your debt settlement company will negotiate on your behalf with your creditors to reduce your balance and monthly payments to avert bankruptcy.

Consult a debt consolidation company to find out what your credit options are and for help in reducing your dependence upon credit. A credit counselor may advise you to sell unused assets to pay down your debts or even to get another part-time job to supplement your income. A licensed credit counselor will assess your credit situation and give you timely options as to how you can consolidate and pay down your debt before it gets out of control.

Debt consolidation is an accelerated repayment plan. A certified credit counselor will advise you on how to consolidate your debts. The credit counselor will work to negotiate with your creditors in creating a plan to consolidate existing debt and facilitate timely and affordable repayment of your overdue bills.

You may have to choose bankruptcy if the previously mentioned options do not work for you. Chapters 7 and 11 bankruptcies involve the selling of your primary assets and using the money from the sale to cover existing debt. You will generally be able to keep your car and home in most states, as long as they are not considered luxury items. Bankruptcy will make it difficult for you to obtain affordable credit for up to 10 years. After bankruptcy, you may receive offers of credit, but at significantly higher rates.

Free Help With Low Interest Rate Credit

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Consumers may often find themselves inundated with credit card offers in their mailboxes, but it can take some effort to get one with a low interest rate. Consumers with good credit ratings should shop around to ensure they're getting the lowest rates possible and be willing to negotiate with creditors to get the best deals.

You may be your best source of free help for reducing the interest rates on your credit cards. Just making a phone call to your card issuer to request a lower rate could save you hundreds of dollars in interest charges over time if the issuer agrees. You may have unsuccessfully asked for lower rates before, but it doesn't hurt to ask again. If you have kept your accounts in good standing by paying your bills on time and not exceeding your credit limits, play up those points with your card issuer's customer service department to try to get a better rate.

Consumers should seek better deals on credit card rates even before they open new accounts. Contact a credit card company's customer service department and tell the representative you're interested in opening an account but you first want to know what interest rates are available. Don't be afraid to ask for a rate that's lower than the ones quoted. If you have a good credit rating, emphasize that with the representative to justify your request for a lower interest rate.

Some financial websites allow users to shop online for low interest credit cards. For instance, the Bankrate website allows people to compare low interest offers and apply for a credit card if they find a deal they like. However, the card issuers display an interest rate range on the site, such as 11.9 to 19.9 percent. There's no guarantee you will receive the lowest rate so contact the companies with the best offers to find out how high your interest rate would be before you apply.

People who don't have a good credit history to qualify for low interest credit cards can use free advice provided online to improve their credit scores. Raising your credit score can help you qualify for low interest cards in the future. Fair Isaac Corporation created the FICO scoring model that's used by creditors and lenders to judge people's creditworthiness. The company's website includes tips for improving FICO scores, such as paying bills on time since late payments can have a significantly negative impact on a FICO score.

How to Reduce Loans

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The best way to reduce your loans is to pay them off on time. Most borrowers intend to do this when they take debts, but circumstances can arise to make repayment challenging, if not impossible. If this is the case, the next best method is to apply debt reduction strategies to begin digging yourself out of debt. These strategies may include settlement, consolidation or modification. Each strategy has its downside, however. Be careful when you begin exploring debt reduction, keeping in mind creditors do not like to change the terms of contracts.

Instructions

Keep paying your debts. Even when you are attempting to modify or close a loan, you must maintain payments in order to avoid racking up additional financing fees. Do not stop payment unless you have been granted forbearance or have determined you will be entering default.

Research federal assistance programs. Often, these programs are the most affordable methods for reducing your debts. Programs are available for student loan consolidation, mortgage refinancing and foreclosure alternatives.

Contact your lender. Inform your lender you will be seeking loan modification in order to reduce your total debt. If your lender participates in federal programs you qualify for, such as the Home Affordable Modification Program for mortgages, the lender must consider your application.

Apply for modification directly with your lender first. You will need to provide income verification to show that circumstances have changed that will prevent you from meeting your current payments but will let you make adjusted payments after modification. The goal is to convince the lender it stands to benefit from your modification. If the lender knows you will default without modification, but you will be able to repay the loan if it is modified, the lender is more likely to work with you. Lenders will not often reduce your principal loan sum unless your property has decreased in value substantially. They will be more likely to reduce your interest rate and financing fees, which can still save you thousands of dollars.

Consider third-party modification. If your lender refuses your application to reduce your debt, you may want to work with a credit counseling service. These services often issue you a loan to pay off your existing debts. The counselor will work with your current lenders to negotiate a low payoff quote, reducing your total debt. However, the new debt may have high interest rates, and you will still need to repay this loan in order to truly reduce your debt.

Is Debt Consolidation Right for Me?

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When multiple creditors call you expecting payments, you may be overwhelmed financially and not know where to turn. One option to consider is debt consolidation. Debt consolidation involves borrowing money from one source to pay off all of your debts. While common, debt consolidation is not for everyone.

With debt consolidation, the goal is to get all of your debts into one single package. This way, you can make one payment every month instead of multiple debt payments throughout the course of the month. You could do this by taking out a loan and using the money from that loan to pay off all of your other accounts. You could also use a credit card to pay off multiple accounts, which would put the entire balance on one card.

Consider consolidation if you are paying very high interest rates on most of your accounts. If you have several credit cards with balances, you may be paying very high interest rates. If you borrow money through a home equity loan or some other type of personal loan, you can usually get a much lower interest rate. This could save you thousands of dollars over the course of paying off the debt.

Another reason to consider consolidating your debt is to reduce your number of accounts. When you only have to worry about making a single payment every month, it is much easier compared to making multiple payments. If you do not keep up with all of your payments, it can lead to late charges and credit score damage.

Even though debt consolidation can help eliminate interest and accounts, it is not always the best approach. When you pay off your credit accounts, this opens the balances back up for use. If you are not disciplined enough, you may accumulate even more debt. If you do not have good credit, debt consolidation may not even be an option, because you cannot take out any additional loans to pay off your debt.

Can They Put You in Jail for a Civil Suit for Credit Card Debt?

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When credit card debts go unpaid, the credit card company or its debt collector may sue you to get its money. Because civil suits are legal actions between two or more parties and not actions taken by the court, you won't be sent to jail as a result of being sued for credit card debt. You may be ordered to pay the debt by the court, however.

Before civil suits are filed by a credit card company, the company attempts to settle the debt out of court. If collections efforts don't succeed, the debt is turned over to a collection agency and written off by the credit card company. If the collection agency is unable to collect, it may file a civil suit against you seeking the total amount due plus collection costs.

If a judge rules in favor of the credit card company or collection agency, you'll be ordered to pay the debt plus any administrative fees or court costs. Credit card debt is considered a breach of contract, not a criminal act provided the debt wasn't attained through fraud, so you will not be sent to jail as part of the judgment.

In some cases, you can be found in contempt of court for failure to pay a credit card debt after a court judgment has been rendered. While this is rare, it can happen if upon review, the judge decides that you have put forth no effort to comply with the court's order. If you are found in contempt of court, you may be given additional fines or sentenced to time in jail. This is considered a separate charge from the lawsuit that led to the judgment.

Most judges will try other means to collect what you owe if you have not made payment by the time they review the case. The most common method is to garnish your wages, taking money from your paycheck. If your income is limited or you can't pay for some other reason, the court may adjust your payments lower or issue an order reducing the debt.

How to Avoid Debt Consolidation Scams

3:21 PM No comments

In a difficult economy, many people look for help managing spiraling debt. Loans that enable you to consolidate your debts are widely available, and solidly reliable financial institutions have offered such personal finance assistance for many years. A plethora of other businesses also offer debt consolidation loans. Among them are those that aggressively market what essentially boils down to a scam. Their tactics distinguish them from legitimate debt management mechanisms.

Instructions

Check to make sure the company is legitimate. Call your state's attorney general's office and the Federal Trade Commission. Check with the Better Business Bureau to see if any complaints have been lodged against the company.

Keep your financial information private. To provide a quote, a debt consolidation program only needs to know your creditors' names, balances and interest rates. They do not need to know your account numbers, Social Security number or other personal information.

Compare fees not monthly payments. You should receive the same rates from every debt consolidation program because they all get the same deals from creditors. If one company is offering you a lower monthly payment, it may be because it is extending the period of the loan. This may cause you to pay more in the long run.

Beware of extra fees. Do not pay for a quote or analysis. Many debt consolidation services charge high up-front fees or hidden fees that will pop up months after you begin. Some fees are built into the monthly payment. They take a payment from you and send it on to the creditors. Some agencies charge you as much as 10 percent more than what they send the creditors. Then they also get a 10 percent to 15 percent rebate back from the creditors.

Take a moment. Employees at many consumer credit counseling services are taught a script to play on your emotions and fears. When you go to talk to a counselor, take a friend who will promise to keep you from making an immediate decision to sign up. Tell your friend to make you leave and come back after you have talked it over and looked at all the details.

How Do Debt Relief Agencies Affect Credit Scores?

11:23 AM No comments

Many people turn to debt counseling agencies before considering debt relief agencies. This may be a better option because they have less of an effect on credit scores. With debt counseling agencies, your credit score is not affected, although a note is issued to the credit bureaus that you are paying your debts through a debt counseling or debt management agency. With debt relief agencies, you can often pay down your outstanding debt with one lump sum a month--minus any fees and penalties the agency was able to get waived--but you aren't able to use current credit cards or apply for any other credit services. This would require you to take on more debt. In addition to this, the credit bureaus are notified of your debt relief usage and, depending on your credit score, effectively lower your credit score by as little as 50 to more than 200 points.

How much your credit score is affected by a debt relief agency depends a lot on what your current credit score is. Scores below 560 are not generally affected as much as scores above 700. This is because a 560 score is not typically considered a good score to begin with. Lenders examining a loan for a person with a 560 credit score already know that there is some degree of risk when lending to this person. Conversely, lenders know that an individual with a 740 credit score has a solid record of being a responsible, credit-worthy borrower. All of this changes, however, if that individual must rely on a debt relief agency. In general, individuals with a credit score of 700 or better may want to consider refinancing or restructuring mortgages or loans. If these aren't options, debt consolidation services are the next alternative because they have less of an impact on credit scores than debt relief agencies.

Even though a debt relief agency may initially negatively affect an individual's credit score, the benefits that may come with receiving this type of assistance are likely to improve one's credit score in the long run. Therefore, depending on one's circumstances, it's usually a better idea to take the short-term hit in order to get on the road to long-term credit benefits. The only time this may not be advisable is if an individual already has an application out for a loan that is badly needed. In this instance, it may be better to keep one's credit score solid than to take on the help of a debt relief agency. Remember, however, that you can always visit a financial counselor or adviser who may be able to provide advice or services that can help you with your debt, with no effect on your credit score.

What Is My Responsibility After Receiving a Request for Entry of Default?

6:53 PM No comments

The primary goal of a civil lawsuit is to resolve a dispute in a nonviolent way. The parties do not have free reign in court, however. Civil procedure rules mandate issues regarding notifying the parties about claims and defenses and the way to ask for a default judgment. A default judgment may arise if one party fails to appear or otherwise defend his case.

The plaintiff is responsible for requesting an entry of default. After filing a lawsuit and serving the defendant with notice of the lawsuit, the court allows the defendant a period of time to answer the claims. If the defendant fails to answer the complaint, fails to appear in court on time or simply does nothing to defend his case, the plaintiff may ask the clerk for an entry of default. The clerk will enter the defendant's default and send the defendant a notice.

The defendant can object to a request for entry of default. If the defendant does nothing in response, the court may hear the plaintiff's evidence, take what the plaintiff says as true (since the defendant offered no contrary evidence) and enter a default judgment. The default judgment entitles the plaintiff to whatever he asked for in his complaint. If the plaintiff sued the defendant for money damages, and the plaintiff proved what the defendant owed, the court can enter a default judgment for the sum asked for. The defendant is legally obligated to comply with the judgment unless the defendant has a defense against the default.

The defendant can ask the court to set aside a default judgment. Courts will only grant such a request under limited circumstances. The motion also must be timely. Common defenses to a default judgment include "excusable neglect" (such as being too sick or injured to respond to the debt) or lack of notice (meaning the plaintiff failed to properly notify the defendant about the claims).

Even if the plaintiff prevails by receiving a default judgment, collecting on the judgment may become another issue. While the judgment is a legal obligation, the defendant may still try to avoid it. The plaintiff would need to take additional legal measures to collect on the debt, such as by initiating a second lawsuit to seek remedies like wage garnishments.

How Does Unsecured Debt Vs. Secured Debt Affect Credit Ratings?

7:29 PM No comments

Your credit score indicates how financially responsible you are for landlords, employers and lenders, and while a small percentage of your score depends on the type of credit you possess, the majority of your score looks instead at how you handle your debt. Still, it's important to understand the differences between your unsecured and secured debt and the ramifications each has on your credit and your life.

Unsecured debt is always reported to the credit bureaus as a reflection of the way you manage your money. It is debt that isn't tied to any collateral, such as a car or home. The two biggest factors in calculating your credit score are whether you make your payments on time (35 percent) and how much debt you're carrying in relationship to your credit limits (30 percent). This second factor is called your debt utilization ratio. If you don't make payments on your unsecured debts within 30 days of the due date, your credit score may fall by as much as 100 points.

Not all secured debt is reported to credit bureaus. Finance experts recommend that people who are building or rebuilding credit ask lenders whether the actions on their secured credit card offerings are reported to the credit bureaus -- if not, they aren't doing making any progress toward laying the foundation for obtaining credit. If a secured debt, such as a mortgage or auto loan, is reported to the credit bureaus, it is judged by the same factors as your unsecured debt, with timely payments and debt utilization ratio being calculated into the overall score. About 10 percent of your credit score is based on the variety of credit you have, and secured debts may help to contribute to the mix.

Unsecured debt generally carries higher interest rates because it isn't tied to any kind of collateral. In most cases, people use unsecured credit cards; however, those who don't qualify for credit or who are only offered high interest rates because of a lack of or bad credit history may opt for secured credit cards. With secured credit cards, you make a deposit into an account, and that is typically the limit for that card. For example, if you have placed $500 into an account, you may only spend up to $500 on the card. After responsibly using a secured credit card for several months or a year, borrowers may be better qualified for unsecured credit cards.

Large debts make a larger impact on your credit. For example, a mortgage is a secured debt. If your house is foreclosed upon, it may negatively impact your score by as much as 200 to 300 points, according to Bills.com co-CEO Andrew Housser. In bankruptcy, unsecured debts may be cleared, while secured debts are generally liquidated, meaning that the object or funds securing the loan are taken away and/or sold.

Reliable Prepaid Debit Cards

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If your credit score's not what it could be and you can't open a bank account that comes with a debit card, managing your everyday spending and making purchases can be a struggle. Fortunately, if you're in this position, you can apply for a prepaid debit card. They work in exactly the same way as a standard card when paying for goods and services but allow you the freedom of shopping and paying your bills with plastic without worrying about overspending.

Visa and MasterCard prepaid debit cards are available from a number of issuing banks around the country. You can apply for a card online, in an issuing bank's branch or over the phone. Prepaid debit cards are accepted by thousands of vendors around the world just like a standard debit or credit card. To the casual observer, a prepaid debit card looks and operates in exactly the same way as a regular Visa or MasterCard card.

You can add funds to most prepaid debit cards online, at a number of top-up points in shops around the country, and at your issuing bank's branches. You can also have your wages or benefit checks paid directly onto your card. Some issuing banks set a maximum amount you can add to your card, while others will allow you to load as much money as you like.

Some prepaid debit card providers charge a monthly fee for the service, while others will charge you each time you top your card up with funds. A few card providers will waive fees if you load a certain amount onto your card every month. a number of prepaid cards charge a fee if you withdraw money from certain locations, but the majority allow you to make purchases for free. Shop around for the card that's going to work best for you. If you're planning to top your card up frequently and regularly withdraw cash, you'll want to find a deal that charges low top-up and withdrawal fees.

As you can only spend as much money as you put onto your prepaid debit card, there's no chance of you incurring any overdraft fees or other charges. When your funds have run dry, your card will decline. The majority of prepaid debit cards allow you to check your account balance online if you're worried that your money's running out, helping you avoid any potentially embarrassing situations at the checkout. Some card providers will even send SMS balance updates to your cell phone.

What Can Be Used to Secure Debt?

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Lenders are often only willing to issue a loan if the borrower is willing to secure it. This means that the borrower must offer the lender collateral that the lender can seize if the borrower fails to pay back the loan under the terms agreed. There are different forms of collateral a lender is willing to accept, although objects of significant value, such as houses and cars, are most common.

Collateral is often used to secure a loan that is used to purchase a specified object. In these cases, the object being purchased will be used as collateral on the debt. When a person purchases a home, he will do so by taking out a mortgage on the loan. The lender who issues this home loan will commonly make the house act as collateral.

Almost any item can be used to secure a debt. However, most lenders will especially value assets that are "liquid," meaning readily convertible into cash. Some assets are significantly more liquid than others. Most securities, such as stocks and bonds, can be readily sold on the market and converted into cash. However, other assets, such as real estate and certain types of retirement accounts, such as 401(k)s, can be converted into cash only with much greater difficulty.

According to the Denver Business Journal, a number of surprising objects have been used to secure debts. The common factor is that all of them have monetary value and have a value that the investor can expect to remain relatively consistent. These include watches, jewelry, tickets to sporting events, golf club memberships, opera tickets, antique furniture, vinyl record collections, insurance policies, medical instruments, wine collections and tires.

In some cases, money itself can be used to secure a debt. This may seem senseless -- if the borrower has money available, why is he borrowing money and paying interest? However, a borrower may be borrowing money simply to build his credit history. Many borrowers with little or no credit take out secured credit cards -- credit cards secured by money in a bank account -- to help them build their credit score.

How to Mix Personal With Business Accounting

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Many people with small or home-based businesses freely mix personal and business accounting. They may use a single checkbook to buy groceries, pay the mortgage -- and purchase supplies for their business. They may use their cell phone for business and personal use and pay the cell phone bill out of the family checking account as well. Some separate bookkeeping is often necessary, but the Internal Revenue Service does recognize one business structure that is perfect for mixing personal and business accounting.

Instructions

Conduct your business as a sole proprietor. The IRS describes a sole proprietor as someone who owns and operates an unincorporated business by herself or himself. The IRS reports that the business structure is common and freely allows people to mix personal and business accounting. No special forms, licenses or applications are necessary for a sole proprietorship. You're free to immediately begin business as a sole proprietor and to mix personal and business accounting.

Maintain accurate records of all expenses for tax purposes. Sole proprietors use standard personal federal income tax forms to deduct business expenses or report earnings. However, proper record keeping is necessary to separate personal expenses from business expenses.

Review your personal and business accounting situation regularly -- perhaps annually -- with an accountant or attorney. A major drawback to sole professorships is that you assume full liability for the business. That means all of your personal assets are at risk if someone files a lawsuit against you for actions by your business. A person selling arts and crafts probably does not have to worry about liability issues. But a roofer or electrical contractor may need a different business structure that does not mix personal and business accounting while offering significant personal liability protection.

Credit Questions & Answers

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Credit cards and other forms of credit involve borrowing money and paying it back at a later date. Credit can be a convenient alternative for purchasing goods and services, but it can be costly. It is important to understand the basics of credit use and credit scores to be financially responsible.

Credit cards allow a consumer to borrow funds up to a specified credit limit, with interest accruing on money spent that is not paid back by the end of the month. The interest rates on credit cards are often very high; when you make minimum required payments on a credit card, a large proportion goes toward interest and not the principal. Paying back the full balance each month will allow you to avoid interest charges and improve your credit history.

A credit score, also called a FICO score, is a number calculated by credit reporting agencies that is an estimate of the risk you pose to lenders. Credit scores range from 300 to 850. A high credit score will make lenders more willing to give you new credit and loans at favorable rates, while those with low credit scores may have difficulty getting approved for credit and loans.

Several things affect a credit score. Your payment history -- paying on time -- is the most important factor in determining a credit score. The amount of credit available to you vs.your total credit debt is the second most important factor. Other factors include the length of your credit history, the types of accounts you hold and how much new credit you have received recently.

Making debt payments on time and carrying a low balance of debt vs. your total credit limit will help your credit score. A long credit history and avoiding new debts will also tend to help your credit score. Foreclosure and bankruptcy can severely harm a credit score. Co-signing a loan (agreeing to pay a loan if someone else doesn't pay) will also tend to hurt your credit score.

How Do Collection Agencies Obtain Your Social Security Number?

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A Social Security number is one of the most significant pieces of identifying information that any company or individual can have about a consumer. Regardless of how closely an individual guards his Social Security number, a collection agency may still obtain it along with other private financial information in its effort to collect a debt.

The Fair Credit Reporting Act allows any company or organization access to a consumer's credit report as long as it can demonstrate a permissible purpose for pulling credit records. One example of a permissible purpose as defined by the FCRA is a creditor's right to periodically review its clients' credit files. Once an individual's debt is remanded to a collection agency, the agency becomes a creditor and can legally access the debtor's credit report--which contains personal information such as his address, date of birth and Social Security number.

A collection agency's purpose is to collect consumer debts. Whether it works in conjunction with the original creditor, or purchases the account and collects independently, the original creditor provides information about the debtor to the collection agency to facilitate the debt collection process. If the original creditor possesses the debtor's Social Security number, it may turn that information over to the collection agency--along with any other information it has about the debtor--when the debt is sold or transferred.

Some consumers believe that a collection agency already has Social Security numbers when, in fact, it does not. The Fair Debt Collection Practices Act prohibits debt collectors from making false representations about the collection agency itself or its intentions, but this doesn't stop the practice from occurring. Thus, a debt collector may claim to already know the debtor's Social Security number in an effort to coerce the debtor into voluntarily giving up the information. Some collection agencies even send out form letters asking debtors to "verify" their information in order to obtain missing Social Security numbers.

A 2006 report by the United States Government Accountability Office states that public records about an individual, such as bankruptcy petitions and property records, often contain the individual's Social Security number. Public records, and the personal information they contain, may be accessed by anyone. As long as a collection agency knows an individual's address, it may investigate any public records that exist about the debtor in that county in an effort to obtain his Social Security number.

Collection agencies occasionally have the Social Security numbers of consumers who do not legitimately owe a debt due to identity theft. When identity theft occurs, the thief steals a consumer's personal information to apply for new credit in the innocent victim's name. The thief often uses the victim's Social Security number when applying for fraudulent accounts. The unpaid debts are then sent to collection agencies--along with the Social Security number of the victim.

Welcome to our website credit and debt managementr.

Saturday, August 31, 2013

Credit Reporting

Debt Consolidation

Community Property States

Joint Credit Applications

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How to Remove an IRS Tax Lien

Assets Stand for Debt

Death of Spouse

Death of Parents

Settling the Estate

Line of Credit

Risks

Benefits

Reality

Alternative

Friday, August 30, 2013

Garnishment Process

Bankruptcy

Automatic Stay

How To Apply for Bankruptcy Protection

Instructions

Taking the First Steps

Thursday, August 29, 2013

Identification

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Expert Insight

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Warning

Debit Cards and ATMs

Cash Back

Pre-Paid Debit Cards

Debit Cards and Checks

Overlimit withdrawals

Fraud

Wednesday, August 28, 2013

Instructions

Federal Reporting Regulations

Suing for Damages

No Damages Suffered

Suing Creditors Collectively

Tuesday, August 27, 2013

Definition of Consolidation

Interest Rate

Credit Scores and Consolidation

Self-Control and Consolidation

Three Companies

Borrower Activity

Mistakes

Multiple Sources

Write It Down

Create a Budget

Cover the Gap

Choose an Approach

Executor Will Take Care of Debt

Outstanding Debts Will Be Forgiven

Cosigners

Life Insurance

Monday, August 26, 2013

What is a Good First Credit Card?

How Much Can I Spend and Keep My Good Credit?

What if I Lose My Card or it is Stolen?

What is the Highest Interest Rate I Can Be Charged?

What is the Difference Between a Credit Card and a Debit Card?

Instructions

Sunday, August 25, 2013

Federal Tax Liens

Personal Bankruptcy

Evictions

Special Preference

Instructions

Recourse/Non-Recourse

Oregon Foreclosure Laws

Power of Sale Clause

Deficiency Judgments

Definition

Types of Checks

Time Frame

Function