Debt & Bill Consolidation Information & Resources

With so much information online regarding debt consolidation, it may be hard to distinguish the valid resources from those that are simply out to promote a product. Several reputable organizations offer reliable information that will help you to launch your research into debt consolidation. By starting out with solid information, you will be armed to make good decisions about what to do with your debt.

Annual Credit Report

The first place to start your debt consolidation process is the Annual Credit Report website. It's important to take a good, hard look at your credit report so that you understand where you stand when approaching lenders for a consolidation loan. Lenders' decisions are based on your creditworthiness, and if you have a low credit score you may not qualify for a consolidation loan, or you may see sky-high interest rates. Through the Annual Credit Report website, you are entitled to a free copy of your credit reports from each of the three credit bureaus -- TransUnion, Experian and Equifax -- each year.

Federal Trade Commission

The Federal Trade Commission offers unbiased advice and information on debt consolidation, and the FTC's website is an excellent place to learn about the benefits and pitfalls of debt consolidation. In particular, the article "Knee Deep in Debt" details the differences between debt elimination by loan, debt management plan and debt negotiation. Reading the information on the FTC website will help you to understand the gravity of taking on a consolidation loan so that you make a solid commitment to paying off your debt.

Bankrate

Bankrate has an extensive article database with information on financial management. The articles are easy to read, even if you have little to no experience with finance information. The Bankrate article "10 debt consolidation myths" by Julie Sturgeon is an excellent resource for anyone considering using debt consolidation. The article explains the differences between debt consolidation and debt negotiation, explains the situations in which debt consolidation is harmful and breaks down the pros and cons of bankruptcy.

National Foundation for Credit Counseling

Those who plan to consolidate through a debt management plan, must be very careful about which credit counseling company they work with. Under a DMP, you pay the credit counseling company and they pay your creditors. However, fraudulent credit counseling companies oftentimes don't pay the creditors on time, causing the debtor's credit score to plummet. Check to see if your credit counseling company is listed as a reputable agency on the website for the National Foundation for Credit Counseling.

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The Importance of Knowing Mortgage Rates

When a person takes out a home loan, the lender will, in nearly all cases, charge him interest on the loan. This interest is assessed on the full amount of the loan and is applied in two forms: fixed-rate and variable-rate. Under a fixed-rate loan, the borrower pays a consistent amount of interest for the whole life of the loan; under a variable-rate loan, the amount of interest paid shifts. It is critical for buyers to monitor these interests rates when taking out a mortgage.

Shopping For A Loan

When a person is shopping for a home loan, he will generally submit an application to a number of different lenders. This is because each lender will charge him a different set of rates and fees, depending on the company's policies. Before shopping for a loan, the prospective homeowner should have some idea of the current interest rate and whether this rate is relatively high or low. If it is high, he may wish to shop for another rate before taking out a loan.

Servicing A Home Loan

When a borrower is repaying a variable-rate loan, the percentage of interest will shift in line with one or more indexes of mortgage rates. To prepare for these shifts, the borrower should identify what indexes his mortgage is pegged to and get some sense of the range and volatility of these indexes. This will allow him to better prepare financially for the payments he will have to make on the loan and reduce his chances of defaulting.

Refinancing

Sometimes, after taking out a home loan, a borrower will seek to replace his current loan with a new one. This process, called refinancing, allows the borrower to take on a new loan with more favorable terms. A borrower is best off refinancing his current loan after the market for mortgage rates has become more favorable. He should monitor the current rates and, if he sees rates drop significantly, begin to consider refinancing.

Considerations

Mortgage rates are most important to people who currently have a mortgage or who are considering taking one on. However, these rates can also be of interest to other parties, particularly investors. A shift in mortgage rates can have widespread effects on the economy. For example, an uptick in mortgage rates was a factor in the bursting of the housing bubble of the 2000s, setting off the largest recession in decades.

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Can I Refinance My Mortgage to Pay Off Credit Card Debt?

Credit card debts are debts accrued after cardholders fail to pay off purchases or loans made through the card at the agreed-upon time. In some cases, a cardholder's mortgage can be refinanced to free up cash to pay off this debt.

Features

Eligible homeowners can refinance into a number of different types of mortgages. Some mortgages allow for lower interest rates on the loan, while others reduce the size of monthly payments. Still others, call "cash upfront mortgages," allow the mortgage owner to borrow a sum of money against the value of the home.

Solution

A new mortgage that resulted in lower monthly payments or in the payment of cash to the mortgage holder could allow him enough financial breathing room to pay off his credit card debts. However, he would first have to qualify for such a new mortgage.

Considerations

The terms of the new mortgage available to a homeowner depend greatly on the homeowner's credit rating. If the homeowner faces significant credit card debt, he will likely be considered at greater risk of defaulting on his home loan than another customer, forcing him to pay a higher rate of interest, to offset the borrower for his increased risk.

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Does a Debt Collector Have a Right to Ask for My Wife's Money?

What a debt collector has the right to do and what they actually do are often two different things. Debt collectors are known for their relentless pursuit of payment, often trying to scare a debtor into making a payment just to be left alone. If you owe debt and are being pursued by a debt collector, they do have the right to after your wife's money in some instances.

Collection Laws

The Federal Trade Commission publishes a handbook outlining the specifications of the Fair Debt Collection Practices Act. This act provides rules on how debt collectors are supposed to act, particularly in terms of the methods they may use to contact debtors. Under the provisions of the act, no debt collector may contact a person other than the individual debtor unless trying to determine location information of the original debtor. This provision prevents a debt collector from legally contacting your wife, letting alone trying to take her money, without your express permission. The exception to this is if your wife is also a legal party to the debt.

Individual Property

In most states, spouses are only responsible for the debts of the other spouse if they are incurred jointly after marriage. For example, if you live in Nebraska and you open a credit card in your name, even after marriage that debt belongs to you only. As a result, debt collectors can only go after you if you owe them a debt. Similarly, any property you own in your name only belongs to you solely for legal purposes. As a result, debt collectors cannot go after your wife's money if it is in her name only, but they may be able to attach it if you both incurred the debt jointly and you have jointly owned assets.

Community Property

In nine states, ownership laws known as community property laws exist. In these states, most debt and property acquired after a marriage is considered to be equally split between the two spouses. If you live in a community property state, it may be more difficult to prevent a debt collector from coming after your wife's money. If you can demonstrate that money your spouse owns has always been in her name, even before the marriage, and is not now used for your joint benefit, you can legally prevent a debt collector from attaching it. However, that may be more difficult to prove in a community property state.

Penalties

If you know your rights, you can legally force a collector from harassing or pursuing your wife if she is not legally responsible to pay any of your debt. The Fair Debt Collection Practices Act describes extensive legal ramifications for failure to adhere to the provisions of the act.

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What Are Some Future Consequences of Borrowing Too Much Debt?

Getting yourself into debt has both short-term and long-term consequences. In the immediate future, you're stuck with high payments and a potentially compromised lifestyle. These concerns can become exponentially worse if you don't nip your debt in the bud. In fact, you may find that your life is more difficult because of your debt load.

Higher Interest Payments

The most obvious long-term consequence of having too much debt is that you'll owe more money to your creditors. You'll also owe much more in interest payments than you would if you didn't have the debt. That's money that you could be saving for your future.

Lower Credit Score

Having too much debt doesn't just hurt your wallet. Your abundance of debt will be reported to the credit bureaus. An increased debt load with a stagnant salary can lead to an increase in your debt-to-income ratio. As this number increases, your credit score decreases because it indicates that you're unable to meet your growing obligations with your current salary.

Difficulty in Securing Credit

Since your credit score is dwindling, your chances of obtaining new lines of credit are significantly diminished. If you already carry a lot of debt and are applying for more credit, loan officers and credit card companies may see your current debt load as a red flag that you're unable to meet your debts and may therefore deny you credit as a result. Further requests for credit could also be seen as an attempt to generate quick cash to pay off your current debt load.

Difficulty in Securing Employment

A sub-par credit score and denial of credit can pale in comparison to the ultimate consequence of having too much debt--the inability to acquire new employment. If you're able to find another job you want, your credit score may prevent you from landing that job. Some companies use credit scores as a predictor of your future reliability as an employee. Too much debt on your record can convince your potential employer that you're unable to manage your resources properly and are therefore unemployable by that company.

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What Is 'Debt Division' in a Georgia Divorce?

In Georgia, divorcing spouses who are unable to reach a mutual agreement must request a judicial divorce property distribution hearing. Since marital debts require repayment by both parties and creditors can hold each party separately liable for full repayment of those debts, spouses can compel debt repayment from spouses who do not contribute by filing a request for a temporary hearing.

Temporary Hearings

In Georgia, spouses who agree upon the decision to divorce can file for an uncontested divorce and receive a divorce decree after 31 days. Under Georgia law, either spouse can file a motion for a temporary hearing to resolve any immediate matters that must be resolved before their divorce is finalized. The hearing is not final, and judges will not award divorces during temporary hearings. However, judges can order temporary debt repayment or make temporary property awards. One spouse may request the other to repay debt or contribute to debt repayment until the court issues a final divorce decree. Temporary orders can also prohibit transfers of property until the final divorce decree or prevent intentional waste of marital property.

Equitable Property Distribution

Georgia is an equitable property state. Equitable property laws require judges to divide marital property equitably, not necessary equally, between spouses. Marital debt includes mutually acquired credit card debt, even though only one party was primarily responsible for accruing the debt. Martial debt also includes car loans and mortgage loans acquired during the marriage.

Lack of Formula

Georgia has no statutory formula for dividing marital debts and property during divorce and does not require its courts to use any set distribution formula when dividing marital property. Courts can consider marital fault, responsibilities of custodial parents, age, educational backgrounds and future earning capacities of each spouse and marital contributions of each spouse. If one spouse acquires debt after the date of separation or filing of divorce, then the court can order that spouse to be solely responsible for paying the debt.

Separate Property

As long as the parties did not acquire marital debt or convert separate debt into marital debt, then courts will order each party to be solely responsible for repaying separate debt. Separate property is not subject to equitable distributions. Separate property includes debts acquired by one spouse before the parties married. Examples of separate debt include mortgage loans for real property titled in only one spouse's name and purchased before the spouses married. However, if one spouse purchases the property after marriage after obtaining a loan to finance the purchase, then the house and debt are marital property, regardless of titling. Other examples include student loan debts and credit card loans obtained before the parties married.

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Consequences for Unpaid Medical Debt

Dealing with unpaid medical bills is a problem that many people face on a regular basis. With the rising cost of health care, it is easy to accumulate a relatively large bill from a medical provider. When you have medical debt that you cannot afford to pay, you may have to face a number of consequences.

Credit Profile

When you have medical debt that goes unpaid, the medical facilities can report this to the credit bureaus. If you have several accounts showing up on your credit report, it can lower your credit score. When you try to apply for financing in the future, prospective lenders can see that you owe the debt. This could negatively affect you when it comes to being approved for financing or credit of any kind. If you pay off the accounts, you can have them removed from your credit report.

Collection Actions

When you have unpaid medical debt, the medical facilities will most likely try to contact you to collect the debt. You should expect several phone calls from the collections agency that the medical facility uses. The collections agency might also send you letters and statements, telling you how much you owe. If you do not want to continue receiving collection calls, you can ask the collections agent to communicate with you in writing. You could also hire a lawyer and then all collection calls will have to go through him.

Lawsuit

Once the debt gets to a certain point, the medical facility could potentially file a lawsuit against you. When the medical facility filed a lawsuit against you, you will be served a summons by your local court system. You will then be expected to show up in court on a certain date. Once the court hears the medical facility's case against you, it will usually issue a judgment in its favor. Unless you can prove that you have already paid or do not owe the balance, you will usually be expected to pay at that point.

Wage Garnishment

When the medical provider gets a judgment against you, you may then face a wage garnishment. The creditor can get a writ of execution from the court which allows it to set up a wage garnishment. This allows the creditor to take money directly out of your paycheck before you receive it from your employer. To stop a wage garnishment, you either have to pay off the debt, negotiate a payment plan or file for bankruptcy.

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