How to Calculate Debt Payments

Consumers struggling with large debt obligations may feel trapped. Having a lot of debt can be overwhelming, but its possible to dig a way out. Evaluate how much is owed and create a plan for paying off debt obligations to make getting out of debt attainable. It wont happen overnight, but over time, debt will slowly disappear.

Instructions

1

Gather your debt statements. Review credit card statements, personal loans and all other debt obligations. Write down the current balance, interest rate and minimum monthly payment for each obligation.

2

Evaluate your monthly budget. Carve out money for debt payments each month. Add up monthly bills and subtract from income. Allocate the amount left over to debt obligations. Also, look for opportunities to cut costs. For example, if the entertainment budget includes eating lunch out daily, consider packing a lunch a few times a week. The money saved can be allocated to debt.

3

Create a target date for paying off debt. For example, if you want to be debt free in 24 months, divide the total amount of your debt over that number. This will provide you the appropriate amount for your monthly debt payments.

4

Calculate debt payments. Calculators, such as the debt free calculator by CNN Money, allow consumers to forecast monthly debt payments and a deadline for being debt free. Enter all debt obligation information, the amount you can afford to pay monthly and deadline for being debt free. The calculator will tell the consumer if the goals are realistic, and if not, what changes must be made.

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How to Add Good Credit to My Report

Whether you have no credit or bad credit, adding good credit to your credit report is a fairly simple task that requires diligence and patience. Good credit reports aren't built overnight; it can take several years to build credit by showing your creditors that you are responsible and take your credit report and finances seriously. Either way, your credit report is an important part of your financial integrity and will remain with you for the duration of your life. Use credit carefully and don't overspend, and you will be rewarded with a good credit score that will allow you to take advantage of lower interest rates and better deals.

Instructions

1

Pay off existing debt, if you have it. The easiest way to raise your credit score and add good credit to your report is to pay off any credit card or loan debt that you may already have. The first step to adding good credit is removing bad credit, if it is possible.

If you have collections accounts that have been written off, contact the creditor and offer to pay small amounts if you can't pay it all. Any amount you pay is better than nothing; the worst thing you can do with a delinquent account is not pay anything at all. Contact creditors and offer them a settlement---you may be surprised to find out that many creditors are willing to take less than you owe if you offer it to them. In exchange, ask the creditor to remove the collection from your credit report completely once you pay the settlement amount.

If your accounts aren't past-due, make a plan to pay off the debt. Don't use the credit cards when you're in the process of paying them off. It might be tempting, but this will hamper your efforts to better your credit and delay paying the cards off.

2

Use your cards responsibly. Once you've paid off your credit accounts, start anew by using your cards only for purchases in which you've set aside the money to pay the entire card balance when the bill comes. Items like gasoline or groceries make good charge options when trying to add good credit because they are necessary purchases that would have otherwise been paid for in cash. Also, limit card usage to one or two accounts, as multiple credit card accounts can be difficult to manage.

If you don't have a credit card, sign up for one and follow the same procedure. Folks with no credit can often find cards that are tailored specifically for people with little or no credit history. Ask your bank if it offers a card for customers with limited credit history---most larger chain banks do. The credit limit on your first card is likely to be low and will let you build a good payment history that will add good credit to your report.

3

Take out a small personal loan and make good payments on it. Personal loans provided by banks are usually unsecured and give consumers a chance to add good credit to their reports by simply paying the bill on time each month. It may take several months for you to become eligible to receive a personal loan, because personal loans require a bit more credit scrutiny than other types of credit accounts. Paying credit card bills on time and paying off outstanding credit debt will likely make you eligible for a personal loan after 6 to 12 months, provided that there are no other negative factors on your credit report. Keep the loan amount small so that it can be repaid in a short period of time, such as 1 or 2 years.

4

Get a secured credit card. If you find that you aren't eligible for personal loans or cannot find a credit card for your credit type, secured cards might be a good option for you.

Secured credit cards have a credit limit that is usually equal to the security deposit that you pay the bank for receiving the credit card---usually $300 to $10,000 or more. The security deposit you give to the bank is placed in a savings account that gains interest over time, increasing the amount in the account each month.

Use the card like any other credit card---responsibly---and pay it off at the end of each month. If you can maintain a good payment history on the card, some creditors will allow the card to become unsecured over time.

5

"Piggyback" on a family member's good credit. This process involves your becoming a co-signer on someone else's credit card or loan accounts. This person should have good credit and pay his bills on time each month. While his good credit can "rub off" on your credit report, his bad credit can too---so choose wisely.

A parent or spouse may allow you to co-sign on an account so that her payments will also show up on your credit, adding good credit to your report.

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Can I Be Sued by a Collection Agency Over a Car I Had Repossessed?

Having your car repossessed can make a bad financial situation worse by taking away your transportation; it can also be a blow to the ego. To add insult to injury, you might even get a collection notice after the lender has already taken your car. A car lender can send your account to collections even after a repossession to collect a deficiency balance.

Car Loans are Secured Debts

A secured debt is a debt you obtained by offering collateral in exchange for the money. When you buy a car and finance the purchase, you give the lender a lien on your car in exchange for the loan. The lien remains on the car title until you pay off the loan. The lien makes your creditor a secured creditor and the debt a secured debt. The creditor has the added security that if you don't pay the debt, it can come and take the collateral. If you default on a car loan and the lender has a lien on the car, the lender can take the car to satisfy the debt.

Repossession

When a car lender takes your car after you default on payments, the act is called repossession. The lender will hire a company to come take your car from your driveway or from in front of your house. If the repo company finds out where you work or that you're storing the car somewhere else, they'll go wherever the car is and take it. Once the lender has the car, the lender will sell it at auction and use the proceeds to satisfy the debt.

A Deficiency Balance is Unsecured Debt

If the lender sells the car for less than the outstanding loan balance, the difference is called a deficiency balance. For example, if your car is worth $3,000 but the lender only gets $1,800 for the car at auction, the deficiency balance is $1,200. The lender will still release the lien and give clear title to the new owner, extinguishing the security interest, but the deficiency balance is your responsibility. Because the lien is gone, the deficiency balance is an unsecured debt, which is a debt that has no collateral backing it.

Collections

A creditor may hire a collection agency to collect a deficiency balance. A collection agency is a third party a lender can use to collect debts on its behalf. A collection agency can send you letters and call you repeatedly to collect the debt. If you still don't pay, the collection agency or the lender will eventually sue you for the amount you owe. If you have a deficiency balance after a repossession and don't pay it, the account can go to collections.

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Are Pensions Exempt From Judgment in New York?

Wage garnishment regulations in New York exempt several forms of income from seizure by a private creditor, including most funds from retirement accounts. These regulations do not usually apply to public creditors like tax agencies and child support obligations. A retired debtor in New York must make appropriate arrangements to pay creditors that have the power to take the money away or risk losing a larger portion of income.

Wage Garnishment Process

A private creditor of a debtor in New York must obtain a court judgment to garnish any portion of a debtor's finances. Private debts include credit cards, medical bills, personal bank loans and private student loans. A creditor must sue a debtor in civil court to obtain a judgment and begin garnishing the debtor's wages. According to BCS Alliance, New York law exempts up to 90 percent of disposable income from wage garnishment. A debtor may pursue the lesser of 10 percent or 25 percent of a debtor's disposable income depending on the debtor's income level.

Exempt Garnishment Income

Income obtained through a private or public pension plan is exempt from wage garnishment in New York, according to the Neighborhood Economic Development Advocacy Project. This can effectively make a debtor ineligible to any wage garnishment actions by a private creditor if the only income a debtor has is through his retirement fund. The court will reject a private creditor's garnishment lawsuit as long as the debtor can show his pension plan is the sole source of his income.

Bank Account Seizures

A private creditor may attempt to freeze your bank account and gain access to the funds to secure payment for a debt. A debtor's finances remain exempt even in a bank account as long as the funds come from an exempt source including a public or private pension plan. A debtor may have to appear in court and show the funds available in her account include exempt funds, which makes the account ineligible for garnishment. This is the case even if only a portion of the funds present in the account are from a protected private or public pension.

Taxes and Child Support

A public creditor may pursue a debtor's pension plan and other forms of retirement to pay back taxes, make child support payments and court-mandated spousal support. Some government agencies, including the Internal Revenue Service, do not need a court order to garnish earnings from a retirement account while in pursuit of a debt. These agencies may also seize tax refunds and other forms of public aid including Social Security retirement benefits to pay public forms of debt.

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How to Contact Credit Bureaus to Correct a Credit Report

When you review your personal credit reports from the three major credit reporting agencies, Experian, Equifax and TransUnion, you might encounter errors. It is your obligation to correct these errors if you want to have them changed. Maintaining accurate credit reports is an important element to improving credit scores and having the best chance at a low-interest rate for loans. The credit bureaus are making it easier to contact them to correct errors on credit reports.

Instructions

1

Draft a dispute letter for the credit report error you want corrected. At the top of the letter, type the date you draft the letter followed by your name, address and phone number along with the name of the credit bureau you are writing and its address. Say that you are writing to correct an error on your credit report. Then, write specific information about the mistake you want corrected, including what the credit report currently says and what it should or should not say. Say that you are attaching a copy of your credit report with the mistake circled, and in the body of your letter provide a phone number where you can be reached if someone from the credit bureau needs additional information. Then, thank the bureau representative for his time and sign the letter. Be sure to attach the page of your credit report with the mistake circled if you contact the credit bureau via mail.

2

Mail your dispute letters to the credit bureaus using the dispute addresses for Experian, TransUnion and Equifax (see Resources). According to Bankrate, a separate dispute letter should be written for each issue that needs to be corrected with each credit bureau, because each issue needs to be investigated separately. Each dispute letter should be sealed in a separate envelope. Send each letter by certified mail, return receipt requested, to have a record of the credit bureau's reception of your dispute letters.

3

Telephone the credit bureaus to speak to a live person about your needed corrections (see Resources). Provide the credit bureau representative with your Social Security Number, updated address and phone number along with details about the correction you require.

4

Fill out a form online with the credit bureaus to report your needed corrections (see Resources). On the forms, you will be asked personal information like your Social Security Number, date of birth, phone number and mailing address. You also will be asked about which specific part of your credit report needs correcting and detailed information about why you are seeking a correction. When you are finished filling out the form, click Submit to register your requests.

5

Follow up with the credit reporting agencies about your correction requests, if you don't hear back from them within 30 days. Follow up using the same format you utilized to submit your initial request and ask them again to fix the errors.

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How Is a Default Judgment Collected in New Jersey?

Courts can order a default judgment against parties who fail to appear for court hearings or fail to answer their complaints. In New Jersey, before a party can collect money pursuant to a default judgment, she must obtain a Certification of Proof from the Special Civil Part Law Division within a Superior Court of New Jersey.

Overview of Default Judgments

Judgment creditors have several ways to collect their debts from New Jersey residents, including executing on personal property, requesting a bank levy and garnishing a debtor's wages by sending him a Notice of Application for Wage Execution. A litigant in New Jersey can request an entry of default by entering a default judgment in court. In a New Jersey Superior Court, the process is known as a Certification of Proof. A party can file a certification to begin collecting on her judgment if she requests the certification within six months from the date a Superior Court entered the default judgment in her favor.

Writs of Execution

To execute a judgment, a judgment creditor must file a Writ of Execution with the clerk of the Special Civil Part. New Jersey Superior Courts require creditors to pay 10 percent of their judgment amounts for the costs of helping them execute their judgments. If the prevailing party is unable to collect his entire judgment, the court will collect 10 percent of the amount collected as commission. The New Jersey Special Civil Part Division is unable to execute judgments on a debtor's real estate. Furthermore, according to the New Jersey homestead exemption, each debtor is able to keep $1,000 of his personal property. If a debtor does not have other personal property, the judgment creditor must use a different method of judgment collections. After locating a debtor's personal property, a court officer can sell the property during a public auction.

Bank Levies

New Jersey law allows creditors to execute bank levies against a debtor's bank account. A creditor can request that a court officer locate a bank account and collect funds from the account. To execute a bank levy, a creditor must have the name of the debtor's bank, the bank's address and the debtor's account number. Under New Jersey law, court officers do not have a legal obligation to find bank accounts on a creditor's behalf. If an officer locates a debtor's account after receiving the necessary account information from a creditor, the creditor must file a Motion to Turn Over Funds directing the bank to turn over the frozen funds from the debtor's bank account.

Wage Executions

Under New Jersey law, a creditor can request an execution of a debtor's wages if the debtor works within the state and earns more than the weekly minimum wage of $217.50 as of 2011. A creditor must file a Notice of Application for Wage Execution and send the debtor a copy of it before the execution. New Jersey law does not allow courts to levy certain types of wages or benefits to satisfy a judgment, including Social Security benefits, unemployment benefits, child support payments and Veterans' Administration benefits.

Considerations

Since state laws can frequently change, do not use this information as a substitute for legal advice. Seek advice through an attorney licensed to practice law in New Jersey.

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How to Fight Unfair Bank of America Interest Rates

If you believe that Bank of America has raised an interest rate on a credit card, loan, or mortgage that you have with the company, you may be able to protest it and convince them to reduce the rate. Interest rate adjustments on credit cards or loans made by massive corporations like Bank of America are rarely performed by actual human beings. The company has established systems for altering interest rates offered based on shifting market conditions, changes in the credit score of the customer, or shifts in the financial needs of the bank.

Instructions

1

Determine a negotiation strategy for reducing your interest rate with Bank of America. If the bank informed you of why it increased your interest rate, use that knowledge to your advantage. If your rate was raised due to a late payment, you may be able to get the rate restored if you catch up on your account and promise to make future payments on time or schedule automatic payments from your existing bank account. If the rate was adjusted due to market conditions or other reasons, you may be able to use your status as a customer in good standing to have your rate adjusted back down.

2

Contact Bank of America's customer service department either on the phone or using their secure online chat through their online banking service. You can call the bank at (800) 432-1000. Ask why the bank increased the interest rate on your loan or credit card. Request that they lower the interest rate. In most cases, the initial representative will transfer you to a supervisor or will confer with a superior to determine their authority to alter your interest rate.

3

Threaten to move your account to another lender if the interest rate is not reduced to its original rate. You can refinance mortgages and personal loans with other lenders. You can apply for a balance transfer credit card and use it to transfer the balance off of your Bank of America card and close the account.

4

Request that Bank of America send you an agreement to adjust your interest rate in the mail before agreeing to any conditions over the phone or during an online chat. This will encourage them to stick to their end of the bargain, as it will be easier to prove that they violated their contract if they fail to change your interest rate.

5

Refinance your loan or balance transfer your credit card if Bank of America fails to lower your interest rate. Lenders are highly competitive with one another. Each major lender spends substantial amounts of money on customer service and advertising to attract new customers. As long as your credit rating is intact, you'll likely be able to move the balance of your loan to another business and save money in the process.

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