How to Make a Debt Chart

If you want to manage your money wisely, learning how to keep track of personal debt is a worthwhile endeavor. It's easy to owe more than you make without realizing it if you don't have a system in place to manage your spending habits. One way to monitor your expenses is through visual means. You can make a debt chart to have a clear picture of how much you owe your creditors and how long it will take to bring your balances to zero. In addition to helping you stay organized, a debt chart can also provide a source of encouragement as you see your balance shrink with each payment. There are many ways to create a debt chart; choose the one you're most comfortable with and that visually resonates with you.

Instructions

1

Calculate how much debt you owe. Write down -- in a notebook or using your computer -- the name of the creditor, the amount of debt owed and the number of months you want to pay down the expense. This may (and, if possible, should) exceed the minimum amount required by the creditor. Calculate the amount of your monthly payment per creditor.

2

Lay the poster board on the floor or on a table in front of you. Determine the number of rows you need to create a chart; use one row per creditor. Measure equal distance between the rows and draw a straight line across with your pencil.

3

Cut the red and green construction paper into squares that number the amount of months you want to pay off your debt. Make sure the squares are of equal size by first measuring with your ruler and marking with your pencil. Write on each red square the words "Owe" followed by the monthly payment amount. Write on each green square "Paid" followed by the monthly payment amount, the name of the month and the year. Do this for each creditor.

4

Label the top of each row with the name and brief description of the creditor. For example, "Main Street Bank credit card." Also include the total amount you owe, such as "$5,000. Glue the red squares along the corresponding rows until you have one continuous red line.

5

Glue a green square over a red square with each payment you submit. If you pay more than the monthly amount you allotted in your budget, write the difference between the increase and the monthly payment below the regular payment line. Do this for each creditor each month to have a debt chart in which you can easily see your debt obligations disappear.

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Annual Credit Report Laws

The website Annualcreditreport.com reports that a credit file disclosure---better known as a credit report--details all of your information held by consumer reporting agencies that may be provided to a third party via consumer report. Mortgage lenders, auto financing lenders or credit cards may request a copy of your credit report to see if you are a credit risk.
Your credit file also lists all companies who have received copies of your credit report, certain medical information, pre-approved credit offers and credit and insurance company reviews. (References 1)

Free Annual Credit Report

Thanks to the Fair Credit Reporting Act (FCRA) , you are entitled by law to receive a free copy of your credit report from each of the three national consumer reporting agencies on an annual basis. The companies are Equifax, Experian, and TransUnion. You can obtain individual reports or all three reports at once by visiting the Annual Credit Report website. (References 2) Additionally, some states require credit reports be made available to consumers at no charge. These states are Colorado, Georgia, Maine, Maryland, Massachusetts, New Jersey and Vermont. (References 1)

The Federal Trade Commission says consumers should take advantage of the free annual credit report so they can fully understand their credit. You should review your report to ensure all information is correct, current and complete, especially if you plan to apply for a loan or a job. Credit reports also allow you to monitor if anyone has used your personal credit information illegally. (References 2)

Other Free Credit Report Requirements

The FTC notes that according to federal law, consumers are eligible to receive a free credit report if a company denies your credit application, insurance application or your employment application on the basis of your credit. You must request the report within 60 days of receiving notice of such an action; the notice will have all contact information for the credit reporting agency involved.

Other provisions entitling you to a free credit report include unemployment (as long as you plan to seek employment withing 60 days), reporting inaccuracies because of fraud or identity theft and being on welfare. (References 2)

Credit Report Disputes

The FCRA requires consumer reporting agencies and information providers to correct any inaccurate or incomplete information listed on your credit report. If you see an error, it is your responsibility to inform both the credit agency and the information provider in writing and request a correction.

Unless it can classify the dispute as frivolous, the consumer reporting agency must investigate your claim and submit its findings to the information provider. At that point, the information provider is obligated to investigate and review the information in dispute, then report back to the credit agency. If your dispute is successful, the information provider is required to notify all three consumer reporting companies. The credit reporting agency must then send you written results and a free copy of your credit report.

If your dispute is not successful, you may request that a statement of your dispute be included in both your credit file and with your future credit reports. If you inform an information provider that an item is under dispute, it must include that information when it reports to a credit agency. (References 2)

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What Is Credit Card Debt Counseling?

If your credit card debt has gotten out of control, credit card debt counseling can be a beneficial alternative to more drastic actions, such as bankruptcy. Credit card debt counseling through reputable organizations helps you to understand your financial situation in detail, as well as what steps you can take to get and keep yourself out of debt in the future.

Choosing a Counselor

Many different organizations offer credit card debt counseling services, but not all of them are working in your best interest. Even when they claim to be a nonprofit organization, some charge high fees that take money away from what you could be paying on your credit card bills each month. Look for credit card counselors that are certified in credit card debt counseling. Any counselor you choose should also be affiliated with a recognized professional organization, such as the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies.

Getting Counseled

Counseling may take place in person, via telephone or online. No matter which route you choose, a counselor will ask you for specific details about your income and expenses, and will help you draw a realistic budget. This will help you track where your money goes, as well as identify areas where you should concentrate on changing your habits. While a credit card debt counselor is not qualified to offer legal opinions, she will discuss your available options with you. Information discussed with your counselor is kept confidential, and counselors may suggest follow-up meetings in the future to track your progress.

Debt Management Plans

One option that a credit card debt counselor may offer you is enrollment in a debt management plan (DMP). Under such a plan, a credit card debt counselor contacts creditors that hold your unsecured debt and negotiates waived fees, lower interest rates and sometimes different due dates for your payments. You then agree to make one lump sum payment to your credit card debt counselor each month, which the counselor then disburses to your creditors on your behalf. If you can stick to a strict budget, do not wish to negotiate terms with creditors yourself and do not wish to file for bankruptcy, a DMP can be a useful solution.

Considerations

As with other forms of counseling, you will get out of credit card debt counseling what you put into it. Additionally, as personal finance expert Liz Pulliam Weston notes, many people wait until they have gotten too far into debt to seek credit card debt counseling. Other options, including bankruptcy, may be faster ways to wipe out your debt and move on with your life. However, if you haven't waited too long and can stick to the advice your credit card debt counselor gives you, it may be the right solution for you.

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How to Write a Pay for Delete Letter

Cleaning up your credit history can prove challenging if you have collection accounts or charge-offs on your credit file. Creditors and lenders report both items after nonpayment on an account after several months. Paying off these old bills doesn't result in an automatic deletion of the item. If you want to pay off the debt and improve your personal score, write a pay-for-delete letter. This involves a creditor or collection agency agreeing to delete a negative item upon receipt of full payment.

Instructions

1

Get the name of the company that owns the debt. Creditors and lenders tend to sell old debts to collection agencies. Contact your creditor or lender first to see if it owns the debt. If not, get the name and address of the collection agency that purchased the account.

2

Check your finances. You can offer to pay the full balance in return for a deletion, or offer to settle the debt for less than you owe. The more you pay toward the debt, the better the odds of a creditor or collection agency granting your request.

3

Draft your letter. Start the letter by mentioning your name and account number. Mention your plans to pay or satisfy the unpaid balance, if the company agrees to immediately remove the negative item from all three of your credit reports. State how much you can afford to send the company -- either the full amount or a settlement.

4

Do not acknowledge owing the debt in your letter. Admitting that you owe a debt can restart the statue of limitations for creditors to collect on a debt. Mention in your letter that you're not acknowledging the validity of a debt. Rather, you're agreeing to pay in order to clean up your credit report.

5

Ask for confirmation in writing: Conclude your letter by asking the company to agree to your terms and delete the negative item upon receipt of your payment. Ask the company to put the agreement in writing using a company letterhead and send it to you, signed.

6

Send your letter by certified mail: To ensure that a creditor or collection agency receives your letter, use certified mail. Someone from the company must sign for the letter, and you will then receive a return receipt.

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How Can I Break My Apartment Lease in a Medical Emergency?

Medical emergencies can lead to bills totaling thousands of dollars, making it difficult or impossible to continue paying rent for an apartment. Breaking the lease and perhaps moving in temporarily with a friend or relative can help with finances. However, getting out of a lease because of a medical emergency is not easy. The lease is a contract that typically doesn't include early termination clauses for medical reasons. The New York Times reports that it is very difficult to break a lease without penalty unless you negotiate with the landlord. This is true, even in a medical emergency.

Instructions

1

Review your payment history with the landlord to confirm that your rent is current. Breaking the lease with the rent current could make for an easier negotiation.

2

Consult with a real estate attorney. Take proof of your medical emergency, such as hospital bills, to the meeting. Ask the real estate attorney to write a letter to the landlord indicating that you are struggling financially because of a medical emergency and must break your lease. Instruct the attorney to ask that the landlord terminate the lease without penalty because of your medical problems.

3

Write your own letter to include with the letter from the attorney. Indicate that because of your medical emergency you have no choice but to move out of the apartment in 60 days and that you are hoping for a fair resolution of the lease agreement.

4

Send the letter by certified mail for impact and documented proof of notice to vacate. Giving the landlord 60 days notice gives the landlord time to find a new tenant. The letter from the attorney will indicate that you have thought this through carefully and that you are ready for a legal battle if necessary.

5

Follow up in four days with a phone call to the apartment manager if she has yet to reach out. The letter is a tactical move to determine if the landlord plans to hold you to the terms of the lease agreement.

6

Remind the landlord about the letter and tell her you are sorry that you must move out in 60 days because of issues stemming from the medical emergency. Ask the landlord if she is willing to let you out of the lease without penalty because of your special circumstances.

7

Break the lease by negotiating with the landlord. Get your attorney involved if necessary to reach a settlement on the remaining months on the lease if necessary.

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How to Stop Connecticut Unemployment Claims Online

The Connecticut Department of Labor processes requests and inquiries regarding unemployment benefits via the TeleBenefits Line and Connecticut Department of Labor website. If you are currently receiving unemployment benefits in Connecticut and secure a new job, you must stop your current unemployment claim. While this can be done by mail with your claim form, you may have already sent it in before you got the new job. If so, you can take care of stopping your Connecticut unemployment benefits on the Web.

Instructions

1

Visit the Connecticut Department of Labor's Unemployment Insurance Online Claim Center website (ctdol.state.ct.us). Click on "Perform Claim Inquiry."

2

Click on "Create An Account" if you do not already have an account. You need to enter your name, address, phone number, date of birth, Social Security number, email address and security questions to create the account.

3

Log into the account with your user ID and password.

4

Select "Perform Claim Inquiry" from the available options once you are logged in. In the text box that appears, enter in your request to stop your unemployment claims benefits. Click "Send Inquiry" when you are done and it will be sent to the claims center. The processing time for inquiries is two to three business days. Once your request has been received and processed, you will get a response letting you know it has been taken care of.

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Louisiana Garnishee Laws

Garnishment is the process by which a creditor obtains a court order to intercept part of an employee's paycheck and use it to satisfy an outstanding debt. Though federal law acts as the ultimate legal authority that provides Big Picture guidance to the garnishment process, Louisiana also has well-developed rules that function to make sure all parties are being served as fairly as possible. The process of garnishment begins when a creditor declares in court that he is owed a valid debt and has exhausted other options for collection.

Exempt Income

While the creditor and debtor are the initial two parties to garnishment proceedings, there is a good chance that a third party, know as the garnishee, will be forced to become involved, especially if the debtor is employed. As garnishee, an employer is bound by law to collect and remit the portion of income earned by a debtor that is legally at risk. However, the garnishee should be aware that certain kinds of income, such as retirement benefits and pensions, as well as most types of accident, disability or health insurance payouts are not subject to garnishment.

Garnishment Limit

Garnishees also should be aware of the legal limit, imposed by federal and state statutes, on the portion of paycheck that can be held by court order. There are two controlling limits in Louisiana. The employer should use whichever method results in a lessor payment. The first method states that 25 percent of an employee's paycheck can be taken, while the second method allows the harvest of any amount earned in a week that exceeds 30 times the federal minimum wage.

Court Order

A garnishee should never begin taking earnings and remitting them to a creditor without having in his possession a Writ of Garnishment. For a garnishment to proceed in Louisiana, there first must be a judgment in place from the court that decrees the debt valid. After that, the creditor must ask for the issuance of a Writ of Garnishment. Only with such a writ in hand and believed to be valid should the employer begin holding back wages.

Legal Help

The garnishee, unfortunately, finds himself stuck in the middle of what can be an uncomfortable situation, especially if he has a good working relationship with an employee who is being garnished. If at any point during the process he is unclear about his legal obligations, it would be a great idea to consult with an attorney who is familiar with the law and who could offer guidance.

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Important Information About Your Credit Report

Credit reports contain important information about your credit-related activity. Creditors and debt collectors regularly provide information to the three major credit bureaus -- TransUnion, Experian and Equifax. Credit bureaus regularly share the information with your creditors and with other lenders when you apply for credit. A lender's credit decision is based in large part on information listed in the report, although other factors are considered as well. Potential employers may also review your credit report during the hiring process or make periodic checks while you are employed. Executives and employees in sensitive positions handling money are most likely to receive regular credit checks.

Negative Information

Negative credit information such as late payments and charge-offs remains on credit reports for at least seven years, with bankruptcy information reported for 10 years. The Federal Trade Commission (FTC) reports that the information cannot be removed sooner, although creditors and debt collectors are allowed to make corrections or changes to information they provided to the credit bureaus. Some debt collectors may agree to remove negative information from credit reports in exchange for payments. However, the process, called "pay for delete," is not common. Generally all your credit accounts are listed on credit reports with detailed information about credit limits, type of loan, balances and minimum monthly payments.

Court Records

Public record information from state and country courts, such as monetary judgments and tax liens, also appears on credit reports. Credit bureaus purchase court records through a third party and add the information on reports. Judgments are a legal decision ordering someone to pay money. Credit card lawsuits often result in judgments, although settlements out of court are possible. Debts resolved through settlement typically are listed on credit reports as "paid for less than the full amount owed," according to "Black Enterprise" magazine.

Inquiries

Credit reports also include a list of companies requesting your credit report. There are two types of inquiries. So-called "hard" inquiries are initiated when you apply for credit and authorize the creditor to review your credit file. Excessive hard credit inquiries may result in a drop in credit score, because creditors fear you are loading up on credit for a spending spree or because you are desperate for funds. "Soft" credit inquiries occur when a current creditor or employer reviews your credit or when other lenders scan your report to consider you for "pre-approved" credit offers or when you check your own credit report. Soft inquiries do not affect credit scores.

Other Information

Certain identifying information also appears on credit reports, including your full name and current and previous addresses. Current and past employers are also included, if applicable. Similar information on your spouse is included if you have joint credit accounts.

Free Reports

The Fair Credit Reporting Act allows free access to your credit reports once a year from each of the three credit reporting bureaus. Free copies of the reports are available through AnnualCreditReport.com. The website is endorsed by the Federal Trade Commission and allows printing of credit reports. Viewing the reports online or ordering by telephone is also allowed.

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Do it Yourself Debt Settlement and Negotiation Tips

Although attorneys and debt settlement and negotiation companies are options for working with your creditors, you also can negotiate and settle on your own. This typically is a good option if your debt situation is uncomplicated, and you feel confident in your knowledge of your rights. Following a few tips in do-it-yourself negotiation and settlement may help you get the result you want.

Statute of Limitations

Laws regarding debt collection vary by state, but every state has a statute of limitations for how long a creditor can collect a bad debt. If the statute of limitations has expired for your state, you do not have to pay the debt, although some creditors still try to collect. Always check to see what debts you truly have to pay before you start contacting your creditors. Inform the creditors with whom you have expired debt that they legally cannot collect to put an end to hassling.

Credit Score and Report

Before you negotiate, get a free copy of your credit report and score from each of the three major credit bureaus: TransUnion, Equifax and Experian. Debt settlement and negotiation can cause your credit score to drop, at least initially. You should know what your credit score is so you know approximately where a drop in your score may place you. The copy of your credit report also will show you what debts have given your credit score the most dings, which may influence the order in which you attempt to settle or negotiate.

Research and Specifics

Every creditor has a history of debt negotiation and settlement, or they are aware of what other creditors are able to offer in settlement and negotiation. Write or call your creditors and ask to speak to someone in the debt collections or customer service department. Then ask about previous negotiations and settlements--for example, ask what percent of the principal balance the creditor has taken in previous settlements. Base your settlement and negotiations on their information. When you write your settlement and negotiation communication, show you've done your homework: Quote the specific figures representatives provided to you, along with the representatives' names and the dates of communication. The idea is to show the creditor has accepted similar offers in the past. Offer a specific percentage and be clear about how and when you will pay the remainder of your balance. Provide documentation that supports your plan.

Written Communication

Always conduct all of your negotiations with a creditor in writing. Written communications make it easier to clear up miscommunications. They also give you evidence of what has transpired, which you can take into a court of law if necessary.

Extra Fees and Charges

Creditors often tack on fees and charges when you are late on payments. These payments generally aren't as much as your total principal. Start your negotiations by asking your creditor to forgive the extra fees and charges they've added. In some cases, this can make payment on the total debt more manageable, and many creditors are willing to waive fees if it means they get at least most of what you owe.

Civility

When you negotiate, be as polite as possible. The more professionally you conduct yourself, the more likely it is that the creditor won't be inflamed by something you say and deny your settlement or negotiation request.

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How to Absolve Debt

You can achieve a complete absolution of your debt through a variety of ways, the most extreme of which is bankruptcy. Absolving debt means eliminating it, and filing for personal bankruptcy can certainly accomplish that. Chapter 7 bankruptcy, which is for people with low-to-modest incomes, allows you to eliminate credit card debt and other unsecured debt in about four months. Chapter 13 bankruptcy, the other form of personal bankruptcy, requires a five-year payment plan to your creditors based on your income and expenses. Unsecured debt remaining at the end of the five years will be eliminated. Bankruptcy destroys your credit, but other less painful options for absolving debt are available.

Instructions

1

Find a nonprofit credit counselor. Ask your bank or credit union to refer you to a reputable counseling agency like those affiliated with Consumer Credit Counseling Service. Or seek a referral from community organizations such as The United Way or Red Cross.

2

Make an appointment with the counselor to discuss your financial situation. Authorize her to pull your credit report for an analysis of your debt.

3

Discuss various debt-elimination strategies with the counselor, including bankruptcy, debt settlement and debt management plans. Nonprofit counseling agencies generally help only with debt management plans, which require a four-year commitment and strong oversight of your finances. You will mail a check each month to the agency for all your debts, and the agency will send individual checks to your creditors. The agency will also negotiate better interest rates and ask your creditors to lower your balances by reversing some finance charges and fees. At the end of the four years, you should emerge with your unsecured debt eliminated or greatly reduced.

4

Start debt settlement if you'd rather take a different course. Debt settlement allows you to eliminate your debts by paying less than the full balance. In 2009, at the height of a financial crisis in the United States, some card companies were settling delinquent debts for as little as 20 percent of the balance, according to The New York Times. Settlement offers are generally for about half the balance, however. Settlements usually are available from your creditor after you fall three or four months behind. Accounts are generally sold to debt collectors after six months. Contact your creditor directly to ask for a settlement agreement and try to settle for as little as possible.

5

See a bankruptcy attorney if you prefer more drastic action. Initial consultations are usually free, and you should use that to your advantage by seeing three or four attorneys before making a decision.

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What Is Interest-Free Credit?

When a person takes out a loan, he is generally required to pay interest on the principal of the loan. This interest is calculated as a percentage of the total loan amount and is assessed over a specific period of time. For example, a loan may carry an annual interest rate of 5 percent. "Interest-free" credit is a type of loan that does not carry any interest.

Loans

When a person takes out a loan, he will generally agree to pay back the loan over a specific period of time. In most economies, money loses value over time due to inflation. To compensate the lender -- and often to allow him to earn a profit on the loan -- the lender will charge the borrower interest on the loan. Loans without interest, therefore, result in the lender losing money.

Zero Percent Interest

Some parties will offer a loan at zero percent interest, meaning there is no interest charged on the loan at all. This can happen for various reasons. For example, a person may not charge his friend interest on a loan. Or, the lender may choose to charge the person a flat fee for the loan, meaning that, although the borrower is paying for the loan, he is not doing so in the form of interest.

Warnings

Many companies that advertise zero percent interest rates on loans may reserve the right to raise the interest rate under various circumstances. For example, on many credit cards, the finance company that issued to card is legally allowed to raise the interest rate on the card if the borrower defaults on a payment. In other cases, the loan is only temporarily free of interest.

Credit Cards

Many times, zero percent interest is offered as an introductory rate on credit cards. For example, the company that issued the card may allow the person to pay no interest on his loans for a first year. However, the person will be required to make a minimum payment on the loan. And, after the introductory rate has expired, the person will be required to pay a much higher rate of interest.

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How to Know if Your Student Loan Is Delinquent

When you have a student loan that is approaching repayment status, your lender will send you an initial notice detailing a payment date as well as the amount that you must pay. The day after your payment is due, your loan becomes delinquent or late. If you are not sure if your student loan is delinquent, you need to take action before it goes into default and negatively affects your credit score.

Instructions

1

Verify the date of your payment on your student loan statements from your lender. Look for the words "Due Date." If you don't receive paper statements in the mail, look on the lender's website to find out your payment due date. Or you can call your lender and request the information.

2

Look in your mail for past-due notices from your lender or be aware of calls from the lender. If you have Caller ID, you can look each day to see if you have received a call. During the 15 days after you miss your payment, the lender should send you a letter notifying you that your payment is late.

3

Speak to the lender to make arrangements to bring your student loan account current. Ask about any penalties or late fees that you may have incurred.

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Will Food Stamps Affect When I Can File Taxes?

Food stamps, also called SNAP -- supplemental nutrition assistance benefits -- are government-provided vouchers that allow low-income people to purchase groceries. Although these benefits are administered by state governments, funding is provided mainly by the Social Security Administration, a federal agency. Federal agencies are financed primarily by federal tax revenues. Receiving food stamps, however, will not affect when you are required to file your taxes.

Food Stamps

Food stamps are meant to help people buy groceries. These vouchers are provided only to individuals and families who, according to a set formula, would not have enough money to buy a sufficient amount of food. These stamps cannot be used to buy non-food products, such as household items, alcohol or tobacco. Food stamps are assigned based on a person's income, but will not be affected by when they file their taxes.

Tax Filing

In most cases, taxes must be filed yearly -- although people will often pay taxes throughout the year. All people who make a certain amount of income are required to pay taxes. This limit varies depending on the kind of tax. However, in some cases, a person who is receiving food stamps will not be making enough money that he is required to pay income taxes.

Deadlines

The deadlines for filing taxes vary depending on the kind of tax -- federal, state or local -- as well as the rules of the government assessing the taxes. In addition, many filers choose to get extensions on the deadlines. Many governments offer extensions for a number of reasons. It is not difficult to get an extension for the filing of federal taxes, although it is unrelated to the receipt of food stamps.

Considerations

The only way that the receipt of food stamps would affect when a person was required to file his taxes would be indirectly, if the person was suffering a sudden financial hardship that required him to be put on food stamps. In some cases, the IRS will allow for late payment of taxes due to unforeseeable occurrences. This can include, in some cases, events that can put the person onto food stamps.

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How Does Being in a Debt Relief Program Affect Credit?

If you have fallen behind on paying back unsecured debts such as credit card bills, debt relief may be an option. Debt relief programs allow you to pay your debt management company a lump sum each month, which it then distributed to your creditors. You can pay off your debts using such a program, often at reduced interest rates; however, you must consider the effects of the program on your credit.

Short-Term

Debt relief may negatively impact a person's credit in the short term. Credit reporting agencies note in the person's credit history that he is enrolled in a debt relief program. This may make some creditors hesitant to extend credit to the debtor because people generally enter debt relief only after falling far behind on their debts and damaging their credit.

Credit Score

The debtor's credit score may go up over time. Debt relief allows debtors to pay off debts at reduced rates; often, debtors pay less than the full amount of the debt when they enter debt relief. This makes it more likely that the debtor will be able to make monthly payments and eventually pay off the debt. Paying back debts always positively impacts the debtor's credit score, and collections accounts are removed from her credit report once they are paid off.

Initial Credit Rating

The effect of debt relief on your credit depends upon how good your credit was prior to debt relief. If you had good credit -- i.e. you only have one or two problematic debts but have paid everything else on time -- entering debt relief can devastate your credit rating. If your credit was poor, however, debt relief will initially have a negative effect but will improve their credit rating somewhat once the debt is paid off.

Considerations

Before deciding to enter debt relief, think about the potential effect on your credit. You may be able to settle your accounts on your own by talking to your creditors, which will not negatively impact your credit rating. You must also consider how likely you are to be able to make payments to your debt relief provider on time. If you have trouble doing this, you will not be able to clear the debts from your credit history and will have an additional black mark from entering debt relief.

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Can I Write a Letter of Discrepancy for Everything on My Credit Report?

The federal government gives each person with a credit report the right to review and contest items found within it. If a person wishes to contest every item on her credit report, she's required to be meticulous in her documentation and provide sound evidence and reasoning why the information contained on the report is inaccurate. This is necessary for any credit bureau to take the claim seriously.

Your Guaranteed Rights

The Fair Credit Reporting Act requires all three major credit reporting bureaus--Equifax, TransUnion and Experian--to deliver you a free copy of your credit report upon request every 12 months. This gives you the opportunity to review the information contained in your credit report and allows you to initiate proceedings to have any errors investigated. If you believe you've discovered massive discrepancies in your credit report, you should contact the credit reporting bureaus as soon as possible.

Contesting Items on Your Credit Report

The major credit reporting bureaus are bound by federal law to investigate all claims of false information on a credit report. An exception to this rule occurs if the company views your request as "frivolous." To submit a request for a credit bureau to examine your entire credit report, you are required to include in writing your name, Social Security number, current address and the names of all your creditors. If your spouse is named on any of your accounts, her identifying information must be included. You are also required to include why you believe each creditor has reported incorrect information.

Credit Bureau Obligations

The credit bureaus are required to investigate your claim within 30 days of receipt of your certified letter of discrepancy. The investigation includes formally contacting each creditor and asking the creditor to validate that the account in question belongs to you and to verify spending records and payments. If the creditor finds the information it provided is inaccurate, the creditor is required to immediately notify all three credit bureaus with the corrected information. You may also request the updated information be sent to any creditor who has viewed your credit report in the last six months.

Identity Theft and Fraud

If any of the three credit reporting bureaus finds evidence of identity theft or fraud in its investigation of your credit report, it is required to move immediately to have creditors freeze the suspicious accounts and contact the local authorities. According to the Federal Trade Commission, your liability on accounts where identity theft has occurred is limited to $50. It is illegal for a creditor to tell you otherwise.

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What Are the Advantages and Disadvantages of Credit Cards & Consumerism?

Credit cards and consumerism are closely linked. Often, people choose to purchase objects by borrowing money rather than by spending money they already have. This is often done through the use of lines of credit accessed via credit cards. Consumerism -- the creation of a desire to purchase goods -- often pushes people to use these cards. Consumerism and credit cards, examined together, have a number of advantages and disadvantages.

Credit Card Advantages

One of the main advantages of credit cards is that they allow people access to money for a short period of time that they would not otherwise have access to. If money borrowed against a credit card is paid back immediately, the rate of interest applied to it is very low and perhaps non-existent. Therefore, these cards can allow people to make important purchases during periods in which they are temporarily short of cash.

Credit Card Disadvantages

One of the main disadvantages of credit cards is that they can be easily misused. Typically, if a person is late paying back a credit card debt, he is charged late fees, as well as face a punitive rate of interest applied to the money he has borrowed. A person who does not handle money well can go deeply into debt by borrowing money and being unable to pay it back.

Consumerism Advantages

Consumerism is a belief system that encourages the purchase of consumer goods. Consumerism's main advantage is that it helps boost the economy. When people buy more goods, businesses receive more revenues. With high revenues, these companies can afford to hire more workers and make new and better products. This tends to raise the quality of life for everyone and allows people to make more money.

Consumerism Disadvantages

Consumerism -- particularly consumerism enabled by access to easy money, such as credit cards -- can push people deeply into debt. When a person is in debt, much of his income goes toward servicing that debt, rather than toward the purchase of goods and services. In addition, consumerism can distract people from more important goals and create a culture that celebrates materialism over moral values.

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How Much Will Debt Consolidation Affect My Credit?

When debt looms, debt consolidation is just one of several solutions. Debt consolidation involves taking out an additional loan with which you pay off some or all of your debts. This doesn't necessarily reduce what you owe, but sometimes you can get better interest rates and monthly payment minimums that are more reasonable given your budget. However, consolidation is not without an impact on your credit. The amount of the impact depends on multiple factors.

The FICO Percentages

To understand how consolidation impacts your credit score, you first must grasp the Fair Isaac Corporation (FICO) method of credit scoring. With this method, factors that impact credit are given a certain percentage, with some factors counting more toward your credit score than others. Your payment history, such as if you've given creditors their money on time, is the largest percentage of your score, comprising 35 percent. The amount you owe, such as $9,000 on a $10,000 card, comes next at 30 percent. The length of your history, which shows how long you've used credit, makes up 15 percent of your score. New credit accounts and the type of credit you use both make up 10 percent.

How FICO Translates Under Consolidation

Consolidation impacts your FICO score primarily under the length of history category. When you get a consolidation loan, you use the money to terminate your debt with your previous creditors. If doing this closes your accounts, then you can truncate your history length. This can impact your credit history negatively. It's best to leave your oldest accounts active, even if you get the balance down to zero.

The other area of FICO involved in consolidation is the new credit accounts, because you have to get a new loan in order to consolidate. Typically, a single new account shouldn't impact your score much, but if you consolidate while you're opening other credit lines, creditors may look at your score and wonder why you're needing so much credit.

Paying It All

In general, paying off a debt in its entirety typically looks good on your credit history. This is what you end up doing with consolidation. For this reason, the more accounts you consolidate, the more consolidation will improve your score, provided you are able to leave the zero-balance accounts open and retain your credit history length.

Program Requirements

Sometimes consolidation companies require you to complete debt management or debt education courses as a stipulation for getting a consolidation loan. They generally just want to make sure you understand the risks associated with the consolidation and have a plan to pay back what you owe the company -- the ultimate goal is to educate you toward better money management. These courses sometimes show up on your credit report. They don't always impact your credit score, but creditors sometimes frown on them, seeing the need for credit counseling as a bad sign. Other creditors see credit counseling as an indication that you've learned the skills you need to handle a debt responsibly.

The Bottom Line

In general, consolidating debt shouldn't have a large impact on your credit, as new credit accounts and length of payment history comprise only 25 percent of your FICO score. Usually, consolidation helps your credit automatically by clearing outstanding debts. However, by the time you look to consolidation, your credit already likely will have dings from missed payments and other issues. Plan to walk a straight financial path after consolidating to preserve the score you have.

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How Does Slow or Non-Payment of Medical Bills Affect Your Credit?

Medical bills are a fact of American life. Whether you have insurance or not, the high cost of medical care means that most of us will eventually rack up medical bills that are difficult or impossible to pay. But if you are slow to pay medical bills, or do not pay at all, you may find your credit will suffer.

Reporting to Credit Bureaus

Whether your credit will be affected by unpaid medical bills depends upon whether your medical provider reports to credit bureaus. Chances are the provider does, which means that nonpayment shows up on your credit report, sooner rather than later. And even if the provider does not report to credit bureaus, they likely work with a billing or collection agency that does, which means that it is almost inevitable that nonpayment or slow payment of a medical bill will damage your credit.

Slow Payment

If you are slow to pay your medical bills, your credit may suffer not one, but two negative entries: initial nonpayment to the medical provider, and the medical provider's subsequent shuffling of your unpaid account to a collection agency. It may seem like double-dipping, but your credit report will show both incidences; first, your medical provider report failure to pay the bill, then the collection agency reports the amount owed. Both entries are recorded on your credit report, and the combination will reduce your credit score. While you can improve your score by paying the collection agency, the damage is done.

Nonpayment

It's unlikely that if you do not pay a medical bill, the only entity that will report this knowledge to the credit bureaus is the medical provider. When the account is turned over to a collection agency, the collection agency continues to report that you are not paying on the account. The agency can continue to report this until they charge off the debt, or report it as unrecoverable. What often happens, however, is that the debt is sold to yet another collection agency, which begins the process all over, and enters another negative item on your credit report.

Undoing Damage

The best way to avoid the damage unpaid medical bills can do to your credit is to make some kind of payment arrangement with the medical provider as soon as you receive a bill. Many providers offer a discount for cash payment, or will offer you an affordable payment arrangement.

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Is My Partner's Debt Mine?

You may have said "for richer or poorer" when you said your vows, but financial difficulties ruin many a marriage. Debt incurred before and during a marriage can be a point of contention, so it's smart to openly discuss responsibilities. You may not have a legal obligation to pay your partner's debt, but you might feel a moral obligation to help out.

Pre-marriage Debt

When you marry, your partner's debt remains in his name and is still his responsibility. This doesn't pose a problem if he is actively making payments on it. However, in a case where he doesn't pay a loan back, the company can go after joint accounts or receive the money from a tax return that you filed jointly.

Debt During Marriage

The debt that you incur during marriage becomes your responsibility as a couple. This is true even when one person buys a high-ticket item for her use only. This is why it's important to discuss any large purchases before you make them. Set your own limit for what you need to discuss before you buy -- for some couples, the limit might be $50, while for others it might be $1,000.

Debt and Divorce

What happens to debt when you're going through a divorce depends on the state that you live in. Some states have "community property" laws, which means that all debt and assets incurred during the marriage will be divided equally at the dissolution of the marriage. In other states, you have to work with lawyers or mediators to determine a fair way to divide debt and assets. Once you know that you're getting a divorce, it's smart to close any joint accounts, so that you don't incur any more debt in the name of the couple.

Personal Decisions

In many cases, whether you consider your partner's debt as your own is based on your feelings as a couple. Though you may not be legally liable for the debt, you may find that his debt is holding you back as a couple, lowering credit scores and taking up too much of your income. You may choose to work together as a couple to bring that debt down rather than taking a "yours and mine" approach. Additionally, some couples maintain separate accounts during their marriage, agreeing that any debt that your partner incurs should be his and his alone. Legally, however, you may have to pay up if he slacks off on his bills.

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How to Answer a Summons for Breach of Contract on a Credit Card

Failing to make payments as agreed on your credit card account may result in the card company or a debt collector suing you for breach of contract. You would receive a summons, which is a legal notification of the lawsuit. Generally summonses are hand-delivered to your home or place of business. A second document, called a complaint, is attached to the summons. The complaint is the actual lawsuit and explains why you are being sued. You must respond to the lawsuit with a legal document of your own, called an "answer."

Instructions

1

Review the summons to determine how much time you have to respond--generally 20 to 30 days, depending on the state. This information will be stated clearly on the front page of the summons along with the address of the Clerk of Court. Failing to respond by the deadline could result in a default judgment being awarded against you, according to the Judicial Branch of Georgia. A default judgment gives the credit card company a complete victory and the right to seek garnishment of your bank account and wages for the full amount due, plus legal fees.

2

Write your answer. Your responses should be numbered to match the allegations in the lawsuit. Respond to each point by admitting that the allegation is true, denying that it is true, or indicating that you do not have enough information to know if the allegation is true or untrue. The exact wording you use is up to you, according to the Minnesota Judicial Branch. Sign your name at the end of your answer and also provide your address and telephone number and your case number, which is included in the summons.

3

File your answer in person with the Clerk of Court in your town. Also send a copy to the credit card company attorney, whose address will be listed in the lawsuit. Send the copy certified mail with a return receipt requested. Filing the answer protects your rights and gives you time to create a defense for a trial date that will be set. Or use the time to contact the attorney for the credit card company and work out a settlement. Illinois Legal Aid reports that you are sure to lose in court if the credit card company proves that the debt is legal and you owe it. Illness, joblessness and an inability to pay are not legal defenses, according to Illinois Legal Aid.

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