North Carolina Foreclosure Help

If a debtor fails to make mortgage payments on time, he risks foreclosure. During foreclosure, the lender goes to court to reclaim the property and recover its loss. Ultimately, foreclosure results in the loss of the debtor's home as well as seriously affecting his credit rating and ability to find new housing. North Carolina offers free counseling to debtors facing foreclosure to help them avoid this possibility.

State Home Foreclosure Prevention Project

The State Home Foreclosure Prevention Project, or SHFPP, is a free program designed to help homeowners in North Carolina avoid foreclosure. This program offers financial counseling to North Carolina homeowners who may be in danger of foreclosure, and also provides legal services. Clients may speak with SHFPP in person or over the telephone to discuss their options or receive help with their loans prior to foreclosure.

Free Help

It is illegal in North Carolina to charge homeowners upfront for assistance with avoiding foreclosure. If a company claims to be a foreclosure assistance company but asks for money before providing services, report it to the attorney general's office. The attorney general of North Carolina has set up a hotline at 1-877-5-NO-SCAM (1-877-566-7226) where consumers can report foreclosure scams, and also has placed a complaint form online (see Resources).

When to Get Help

Seek help as soon as you fall behind on your mortgage payments. Once you miss three payments, your lender may begin foreclosure proceedings. You do not want to ignore your mortgage or letters regarding your mortgage, as your bank can begin foreclosure proceedings if you do. SHFPP can help you even if you have received a final notice from your lender, but it is best to contact them prior to this point to avoid stress and the risk of foreclosure.

Foreclosure Process

If you are more than 15 days late with your mortgage payment, you may get a letter of default from your lender. The lender may send you a letter once every 30 days until you settle your account or enter foreclosure. After 90 days, your lender may send you a demand letter telling you how much you owe and informing you that if you do not make payment arrangements by a certain date, you will enter foreclosure. Next, you get a letter informing you of a hearing date and time regarding the foreclosure. You must receive this letter at least 10 days before the hearing. You may also get a notice of sale, although this notice can also be served later. The notice of sale must come 20 days before the sale of your home. After your home is sold, you will receive a notice informing you of how much time you have to buy it back before the court finalizes the foreclosure.

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Top 5 Ways to Get Out of Debt

Getting out of debt can be a long-term project, but there are some ways to speed up the process. If you have $9,000 in credit card debt at 15 percent interest and make only the minimum payment every month, you will spend 19 years paying off the card, according to CNN Money. An aggressive debt-management plan can significantly cut the amount of time and money you spend getting out of debt.

Stop Charging Purchases

Avoid increasing your debt by purchasing items on credit. If you do not currently have the money to buy something, do not charge it to an account and assume you can pay for it later. To avoid accumulating more debt, pay for everyday purchases with cash or a debit card and save the credit card for emergencies. Once a credit card balance has been fully paid off, start using the card again only if you can pay the bill in full every month.

List All Debts

Debt does not necessarily seem like a big problem when the debts are scattered between many different accounts, none of which are very large. But not knowing how much you owe or when you'll be debt-free can be overwhelming. Start by collecting statements from all credit accounts and loans and making a list of debts owed. The list should include the outstanding principal amount, minimum monthly payment and annual interest rate for each account. Assessing the situation empowers real progress toward getting out of debt.

Lower Interest Rates

Good debts are those with interest rates under 10 percent per year, especially if the debt was incurred to buy something that appreciates in value such as a home or education, according to The Motley Fool. For any accounts with interest rates above 14 percent, call the company and ask for the rate to be lowered. If you have decent credit and indicate that you may transfer the balance elsewhere, the creditor may agree to lower your rate to something more reasonable. If not, shop around for a credit card with 0 percent APR for six to 12 months on balance transfers and a rate thereafter equal to or lower than that of your current card.

Make Extra Payments

In addition to making the minimum monthly payment for all debts, make extra payments toward the debt with the highest interest rate. This strategy helps you to pay the least amount of interest possible as you work to get out of debt. Once the highest interest debt is paid off in full, attack the next highest debt with the same strategy.

Find Extra Income

For those who are committed to getting out of debt, spending a year or two working really hard and paying off debt can lead to many years of freedom when it is done. Consider taking some extra shifts at work or getting an evening job, applying income tax refunds toward paying off debt and even using money received as a gift for a birthday or Christmas to make an extra credit card payment.

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Ways to Reduce Debt Quickly

In order to reduce your debt quickly, you must be willing to make changes in your spending habits so that you can pay extra money each month toward your debts. Reducing debt is not an easy process, but it's not an impossible one either. If you are ready to cut back on your spending, you can reduce your debt quicker than you may think.

Get a Second Job

One way to get a little extra money to put toward paying off your debt is to get a second job. Even just working a few nights a week and some weekends will help you to pay off your debt quickly.

Skip the Vices

If you smoke, quitting could have a dramatic effect on your efforts to reduce your debt. Saving just $7 a day, whether by giving up smoking or your special, expensive coffee, can save you nearly $2,500 per year. Cut up your credit cards to avoid spending money that you should be saving. You should keep only one credit card for emergencies. This will go a long way in helping you to quickly reduce debt.

Reduce Housing Expenses

Reduce your housing costs by moving to a cheaper home or getting a roommate. Be careful, though, to add up the costs of moving and make sure that your move is not costing more than it is saving you. By putting the extra cash you were paying for housing toward your debt each month, you will see a significant difference in how quickly your debt will begin to disappear.

Modify Travel Arrangements

If your family owns two cars, consider getting rid of one of them. If you are still making car payments, you could use that extra money each month to pay off your debt. Look for other ways to commute, such as car pools and public transportation. If you live close enough to your job, you could even ride a bike to work.

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Can I Pay Off Student Loans?

Student loans may take several years to pay off. Most student loans start out with payment terms of about 10 years, although you can extend that length if you consolidate the loans and lower your monthly payment. If you owe a lot on student loans, it may seem difficult to finally pay them off, but it is possible to do it. Student loans are rarely discharged during bankruptcy, and the only way to not pay them is to become permanently disabled.

Benefits of Paying off Student Loans

When you pay off your student loans, you stop paying interest on the money. This sooner you pay off the loans, the less you will pay in interest over the life of the loan. Another benefit is that paying off the student loan frees up the money in your budget for you to invest and build wealth, or it can allow to do things you would like to enjoy but cannot currently afford to do. There is no penalty for paying off your student loans early.

Disadvantages of Paying off Student Loans

Student loan interest is tax deductible, which lowers the amount you will need to pay in taxes. By paying off the student loans you will have more money available to you, but this benefit as well as the lower interest rate on federal student loans may push your student loans to the back of the list when you are trying to get out of debt. Other than the tax deduction, there is no reason not to pay off your student loans.

Finding Extra Money to Pay Toward Student Loans

Create a budget to find extra money to put toward your student loans each month. A budget will let you track how much you spend and see areas you can cut back on to get out of debt. Make a goal of when you want to be out of debt and then determine how much extra money you need each month to make that happen. If you need to, you can take a second job or sell things to raise extra money. You can also apply bonuses and other extra money you receive toward the debt.

Qualifying for Loan Forgiveness

You may be eligible for a loan forgiveness program. Teachers can have a portion or their entire loan forgiven by working in a low-income school. Employees of state or federal governments may qualify for loan forgiveness after 10 years of service. There are also other service organizations that will help you repay or allow you to qualify for a portion of your student loan to be forgiven if you work for them for a set number of years.

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How to Pay a Receivable Recovery Collection Account

The term "collection agency" can cause worry and make your blood pressure increase. While debtors frequently view debt collectors in a negative light, many collectors are simply doing their job. Often a debtor can talk to the collector to try to work out a payment arrangement that is agreeable to the collector and you. Collection agencies must adhere to federal law when attempting to collect a debt.

Instructions

1

Calculate your budget. Before you speak with a collection agency representative, determine how much you can pay monthly toward your bill. Knowing this amount allows you to negotiate with the agency representative without overextending your finances.

2

Call the holder of the collection account or answer the phone when its representative calls you. Typically, collection agency representatives call and leave messages when attempting to collect a debt, but if you do not have the agency's phone number, you should be able to find it on any correspondence from the agency.

3

Give your account number to the representative. Explain your circumstances to the representative and inform him of your willingness to make payments on the bill.

4

Ask the representative whether you qualify for a settlement offer. If the agency is open to settlement, it may accept less money than you owe in exchange for one lump-sum payment or a series of up to three payments.

5

Negotiate a payment plan if your attempt at settlement fails. Do not agree to pay more than you can financially afford each month. While the representative is attempting to obtain as much money as possible for her employer, if you agree to pay more than you can afford, you still will not be able to pay the account. Tell the representative how much you can afford. When you reach an agreement, make sure to ask for written documents confirming the agreement terms.

6

Make all payments until the account balance is zero.

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Will Paying Debts on My Credit Report Raise My Score?

If your credit score could use improvement, your first thought may be paying off some of the debts that appear on your credit report. Although it often happens that paying the debts on your report results in a higher score, it's not always the case. Understanding which debts are good for your score, and which are dragging it down, will help you to use your money wisely.

Credit Scores

A credit score is a ranking of a consumer's credit, based on the information in his credit report. Each of the three credit bureaus --- Experian, Equifax and TransUnion --- has its own formula for rating consumers. The commonly used FICO score relies on an additional, different scoring system. However, all these systems rate how low or high a consumer scores as a credit risk, and take into account debts such as credit cards, personal loans, car payments and mortgage loans.

Current Accounts

Current debts are not necessarily bad for your credit score, unless your debt-to-credit ratio is too high. If that's the case, pay down some of your current accounts. However, you may want to hold off on paying certain accounts completely, because the older an account is, the more it positively affects your score.

Delinquent Accounts

Delinquent accounts can do serious damage to your credit score. If an account is not yet in collections, pay enough on the account to get it current, and then continue paying it on time until it's paid off. The longer you pay your bills on time, the more your credit score will rise. If an account is already in collections, paying it off will not remove it from your credit report. However, you may be able to negotiate with the collection agency to remove the account from your report in exchange for full payment. In that case, payment of the debt will significantly increase your credit score.

Closing Accounts

If you have balances on many credit cards, you may be tempted to consolidate your balances onto just a few cards, or pay off most cards and then close them. However, moving balances around and closing credit cards will not raise your score. In particular, you don't want to close credit cards or other accounts you've had for a long time, since old credit is good credit.

Considerations

Credit scores can be very slow to improve. They usually require a steady, dedicated approach to paying bills on time and paying down large debts. You may see the fastest improvement through the pay-for-deletion method of negotiating with collection agencies, where the agency deletes delinquent accounts from your credit report in exchange for full payment.

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Do It Yourself Debt Reduction?

Debt restricts what you can accomplish by taking away your future income. If you have borrowed too much money, don't beat yourself up. Make a commitment to move on and improve your financial situation from this point. Take responsibility for the fact that you have spent more than you earned and move forward.

Budget Your Money

The first step in winning financially is to establish a solid plan. A budget should be a realistic picture of what you will earn and spend, and should be updated each month. If you are married, your spouse should participate in the budgeting process. List the income that you expect to bring in for the month. Then list each of your expenses one by one. Place only the minimum credit card payments on the budget because you will deal with extra payments later. Hopefully, you have some money left over to pay extra on your debts. If you don't, you may need to trim expenses or take on a part-time job to make more money available for debt reduction.

Develop a Debt Elimination Plan

List all of your debts on a sheet of paper. Include the balances and interest rates. Stop using all of your credit cards immediately. List the debts from the smallest amount to the largest. You will work the debts in this order. Pay any extra money that you have in your budget towards the debt at the top of the list. When that debt is gone, take the money you have been paying on it and apply it to the next debt on the list. Continue this until all of the debts are gone. Consider selling any assets that you owe money on and apply the proceeds to the loan in order to further reduce debt.

The Emergency Fund

Many times people go into debt because they do not have an emergency fund. When a financial problem comes up, they use their credit cards to take care of it. Soon things are back to normal, and then another financial problem comes up, starting the cycle over again. Most experts say that you should have an emergency fund of at least three months of your income. Start putting some money away for it immediately. Even $2,000 will take care of many financial emergencies and keep you from using debt.

In Too Deep

If you can not balance your budget and pay your regular bills, let alone extra money on debt, you may have no choice but to take aggressive measures. Debt settlement can be done yourself and may work if you are past due on a bill. You can try to negotiate a payoff of less than the amount due in this case. If a creditor agrees to a settlement, make sure that you get the agreement in writing before you pay them and keep a copy of your payment forever, in case the bill comes up again. If you are facing lawsuits and garnishments, you may have no choice but to consult with a bankruptcy attorney.

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