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Find Out What the Alternatives to Bankruptcy Are

 

Filing for Bankruptcy is the very last resort for people overburdened by debts and unable to clear them. The decision to file bankruptcy is a grave one and it is recommended not to make such a decision in haste. Many people choose this option without finding out the available alternatives to bankruptcy.

Some of the alternatives to bankruptcy are:

1. Settle your debts: If there is the smallest possibility that the debt you owe is manageable and will not be absolutely detrimental to your finances, it is advisable to make a full settlement or meet your creditors and discuss alternate payment arrangements. Another way to meet your debts is to borrow money to pay it off. But, even though this may even seem like a viable option at the time, it would be best to consider this option last, because if you are finding it difficult to pay off debts now, a new loan will only add to your problems. 2. Debt consolidation: A debt Consolidation Loan might be a good solution. How good it is, will depend on your situation. More often than not, debt consolidation loans are made using your home as Collateral by placing a second mortgage on your house. Again, there is a considerable amount of risk involved here. You must consider whether you will be able to pay your bills in a timely manner and be able to subsist on a monthly basis. If, and only if, this is possible, should you opt for a debt consolidation loan. It is also pertinent that you do your homework and choose a good loan consolidation company that provides loans at manageable interest rates. 3. Ignore your creditors: Although this is an option and a deferral tactic, it isn't the smartest decision to make. It does not matter how big or small your debt is, the creditor will not stop till he gets his money. Often, in business, people ignore debts until they pile up to the point that it is very difficult for them to pay them off. If you ignore your creditors long enough, you may even end up with a Lien on your home. So, it is best to try and solve the problem to begin with instead of ignoring it, which will only make matters worse. 4. Credit counseling: This is a much safer and a less mentally taxing option. Credit-counseling agencies can contact you creditors on a direct basis and can make new payment arrangements to suit your situation. They may also be able to get your interest rate lowered or have your interest payments ceased completely. Credit counseling is often the best solution for avoiding bankruptcy, as many families have found out. It will also give you the chance to sort out your finances in peace as your creditors will stop hounding you for payments. Always do your research before selecting a credit-counseling agency. It is recommended by experts to go with a non-profit credit-counseling agency rather than a for profit credit-counseling agency. Finally, if none of the above mentioned options are viable for you and you have used up all your resources, you may choose to file for bankruptcy as the only way out.

Next Step

 


About The Author Jon Arnold is an author and computer engineer who maintains various web sites to provide tips and information on a variety of topics. More info on this topic can be found at his Bankruptcy site at http://bankruptcy-data.com/.

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Fair Debt Collections Practice Act: Your Safeguard Against Creditors

The Fair Debt Collections Practices Act, also known as the FDCPA, is the consumer’s best safeguard against the harassing pastime of collection agencies. This act was passed by Congress to outline just how collection companies are allowed to treat their clients and holds them responsible if these guidelines are broken. Collection agencies have no right to make harassing phone calls or act like a mobsters loan shark; as a consumer in the United States you have rights.

What are the limitations of creditors under the FDCPA?

  • Creditors are not allowed to call at inappropriate hours. They may only make calls to you between the hours of 8:00 AM and 9:00 PM in your time zone.
  • They are not allowed to call your workplace if your workplace does not allow personal phone calls. Creditors do not have the right to put your job in jeopardy.
  • They may not send deceptive letters to you that appear to be a court document or any other official document.
  • Using offensive or inappropriate language is absolutely forbidden; doing so may be considered harassment.
  • They must file documents in courts within your vicinity. They are not allowed to force you to travel to handle this ordeal
  • Absolutely no threats are permitted. They are not allowed to lead you to believe you will be arrested, or charged exorbitant interest rates you did not previously agree to.

What can I do if a Creditor breaks one of these rules?
Take action! You may owe these creditors money but they have absolutely no right to treat you like a villain. If any one or more of these rules are broken you should report the company and employee if you are able to get a name. You have the right to file a lawsuit against these companies and have the right to sue for damages related to these violations as well as an additional $1000.00, as well as lawyer and court fees if the court finds in your favor.

Who do I contact?
There are a few different agencies that you may contact. Start with the Attorney Generals office in your state. You may also have luck with the Federal Trade Commission (FTC). There is also a newly formed Consumer Protection Bureau that has jurisdiction over these sorts of cases as well. 

 

There are a few different agencies that you may contact. Start with the Attorney Generals office in your state. You may also have luck with the Federal Trade Commission (FTC). There is also a newly formed Consumer Protection Bureau that has jurisdiction over these sorts of cases as well.

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Facing foreclosure – How it will effect your credit score

Times are tough across the country forcing tens of thousands of people into foreclosure or facing the very real possibility of losing their homes.With so many people in the same boat many are left wondering how foreclosure will affect their credit scores.Restoring credit scores are extremely important as soon as possible for so many Americans in order to acquire a rental home and restore a tinge of normalcy to their everyday lives.

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Experian starts to help bad credit renters by reporting history

Experian is beginning to assist renters build credit scores with the recent purchase of RentBureau. RentBureau is a company that collects information from landlords on renter payments. Their goal is to incorporate the rental payment history as an active trade line to generate part of the historical information.

This will help with multiple groups:

College no more free credit cards to pay for beer LOL!

helps in getting jobs, since more companies are using credit reports to screen applications.

will help create a stable payment history.

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Everything You Need To Know About Your Credit Score

Credit score is a sum used by lenders as an indicator of how likely you are to repay your loans. Your credit score is generated by a mathematical formula utilizing the data from your TransUnion, Equifax or Experian credit reports. Lenders have been using credit scores as part of the lending decision for over than 20 years.

What factors influence my credit score?

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How to Rebuild Your Credit After Bankruptcy

If you are worried about rebuilding Credit after Bankruptcy, this article will help you with some general advice about how to find your way back to the top.
What filing bankruptcy is all about
Bankruptcy is a process whereby a person in debt can crawl out from under it and start again. The idea is to help out those who are in dire financial straits, and are in debt over their heads. The result is that you do not have to pay back most of your debts, you are debt free and can move on. The drawback is that it leaves a nasty stain on your credit report for the next ten years, making it hard to reestablish yourself and recover.
Do I really have to wait another ten years before I can get a loan again?

No. As a matter of fact it is possible to get credit again. However, it will be a bit more difficult. One possibility is to get a protected or pre-paid Credit Card which can be used by depositing money into it, like a bank debit card. This can help you rebuild your credit again, and establish yourself. After a while it can help you start to get loans and credit again before the ten years is up.

What about my debts?

One good thing about filing is that it gets rid of the creditors once and for all. They won't be bothering you anymore. Once all the paperwork is in and processed, it is illegal for them to keep harassing you. You have the law on your side!

Will everybody know that I filed?

No. Very few will actually know about it. However, since the file is accessible to the public it will be visible on your credit rating, and will be kept on file for ten years.

What are the changes I've been hearing about?

The original laws were passed in 1978, and were revised in 2005. The general idea of the new legislation is to make people who CAN pay some of their debts pay. The laws were being abused by those who could have paid. Here are the major changes that went into effect last year:

  • You have to meet certain requirements in order to be able to file bankruptcy. Your family income will be checked to ensure that it is below the state average. They also want to make sure that your family is able to make the regular payments.
  • You are required to submit your last year's tax return, in addition to all the other paperwork.
  • They also require that you have lived in the state in which you file for at least two years. The reason for this is that some states have more or less lenient laws.
  • Child support and alimony and are the debts that have to be paid first.

Next Step

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Even Affluent Women May No Longer Be Eligible for Credit Cards

 

WOW – this article by JEFF LANDERS really spells out how far off the the mark we (OUR elected officials – congress) are with both issuing credit and using credit. We need to protect our self from our self….if i was a woman i would be up in arms about this. Enjoy the read he really does nail this one.

The federal government is cracking down on who can and cannot own credit cards –and for some women, these changes could have dire consequences.

Under new rules in development by the Federal Reserve Board, banks will have to consider a consumer’s individual income as part of the credit card application process. Your household income or assets will no longer factor into the equation if you need credit.

This appears to be yet another law with unintended consequences. Although regulators undoubtedly saw these changes as a way to make it more difficult for consumers without income –particularly, underage students and the unemployed –to get in over their heads with credit card debt, they obviously missed an important point.

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I Didn’t Know There was a Fair Credit Billing Act!

2010 brought about a flood of new consumer protection acts complete with the Fair Credit Billing Act. Have you ever taken a look at your credit card bill and been shocked at your balance only to find out you were billed twice or three times for an item or transaction? Well this is where this Act comes into place. Before this act you were at the mercy of the credit company to take your word that you were overbilled and hoped that they would fix the problem. Now there are official steps you can take to ensure you aren’t overbilled at the mercy of these companies. 

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Identity Theft's Young Victims: How to Protect Your Children's Identities

When we think of identity theft, children are probably not the first victims we might imagine. Unfortunately, more and more kids are being targeted for this crime, and the culprits may not be who you think. Right now, approximately 4% of all identity theft cases involve children, which means roughly 400,000 kids a year are having their futures ruined without their knowledge. * In an article on MSNBC.com, a 24-year old man explained that by the age of 10, his identity had been used to accumulate almost $250,000 in debt and to commit a felony. Another victim, a 9-year old boy, received a collection notice for a $2,000 debt.

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Elderly Financial Abuse: Don’t Miss the Signs

It’s almost hard to believe, but the elderly are by far the number one targets and victims in the United States for identity theft and credit card fraud.The elderly are typically selected because of their established credit histories, a lack of education about credit as well as an increased dependence upon family members. Elderly financial abuse is unfortunately on the rise. The 2011 MetLife Study of Elder Financial Abuse reported that victims lose an estimated $2.9 billion dollars annually which is up 12 % from 2008. Strangers are responsible for 51% of the elderly abuse crimes, but unbelievably friends or family members commit 34% of these crimes. The Most Common Victims

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Does the American Dream come to those with bad credit?

 

I was asked today if people with bad credit just rent for the rest of their life....

I had to sit back and think for a second because, I knew 10 Praxis Credit Consulting graduates that started our program with scores of 490’s and filed Bankruptcy who just closed on houses in May 2013 alone! So YEAH the American dream of owning a home is ALIVE AND WELL for those with bad credit!

These were all your friends and family members that everyone seems to know right now – one was living with their in-laws in Mesa, another with his brother in Phoenix. You see the stories on the news all the time.

All of these folks just followed the simple road map that we laid out for them to get to their goals of owning a home.
I have to say when – they told me they couldn’t of done it alone it makes me feel pretty good that we are really helping people.

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Do I still owe after a short sale?

A common problem with short sales is that the seller doesn’t know precisely what he or she owes after the sale is final. That’s because short sales are complex contracts and are usually only drawn up in situations that are unfavorable for the seller. Unfortunately, that’s the reality of the post-2008 market, and it’s usually the lesser of two evils (the other being the “f-word”: foreclosure).

In many short sales, the bank agrees to discount the repayment of the seller’s home loan. That is, if they bought the house for $120,000 and the sale price is $80,000, the bank will only demand $80,000 in repayment for the $120,000 loan. This sounds like a great deal—and usually it’s the only deal—but there are a couple of things to watch out for.

The first is that $40,000 you made on the loan will probably be counted as income, and the bank will issue a Form 1099 which means that you’ll be on the hook for tax on that income. If you’re really out of money, this is unlikely to cause a real problem, but if you have a little more than most short-sellers, you may be in trouble.

The other issue is that banks will sometimes seek a “deficiency judgment” against sellers. That means that the bank would like to recoup the money you owe them but are unable to pay because of the value of your home. If the seller has not requested that the bank waive its right to seek a deficiency judgment, it’s still on the table. Being unable to pay a judgment can further damage your credit.

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Credit Score? Exactly What is it and How do You Determine It

 

Does Credit History have you confused? Every one puts such a huge importance on your credit score.
Why is this credit score so important?
And how is it determined?

Your credit score is based on multiple variables that are dependent on your credit and amount of money loaned out to you.

Like - historical payments, time you have had an account, types of accounts and age of account

Your credit, or more appropriately addressed as the ability for you to pay back the money that has been loaned to you, whether it be through a credit card, mortgage, home equity loan, car, RV, boat, motorcycle, rental apartment or town home, or just about anything that involves you paying back money trustingly for the items you have purchased or pay for on a monthly basis.

When your credit score is accumulated, each item is passed through a system where points are either awarded or deducted based on the status of the terms.

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Credit Score Of 800 Not Impossible

 

By now, most consumers with even a minimal history of Credit are aware that something known as a credit score has a tremendous amount of influence on his or her financial lives. The score, a distillation of one’s Credit History reduced to a three-digit number between 350 and 850, represents to the world the overall credit worthiness of the individual that it represents.

A score towards the lower end of the scale means that you are a poor risk for a Credit Card or a loan, while a score at the upper end means that you can get the best rates on just about any Type of lending. Despite what you may think, it is possible to obtain a score in the 800 range. All it takes is time and some discipline.

Here are some tips that will help you achieve a top credit score:

# Don’t have too many credit cards. It’s possible to have too few, and it’s possible to have too many. Too few cards means not enough credit, and too many means that you can potentially get into too much debt. Four or so is probably just about right.

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Credit Report Scores

Your Credit report score has been affecting your Credit History for years and you may not even know you have one or what it is. A credit score is a numerical number that is determined from a mathematical formula based on the information found in your Credit bureau report.

The formula is complex and looks at many things in your credit report to determine your score, like, how old your credit is, how you have paid your credit in the past and what standings your debts are currently at, how many debts you have, the number and age of inquires, how you utilize your credit, as well as what your balances are in relation to your credit limits.

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Identity Theft, Even After You Die

Believe it or not identity theft has moved to the dead. It is compounding more and more family's grief because con artists are digging up identities of the deceased. The identity of someone who has died is becoming an irresistible target to thieves and the death helps buy them time before they are likely to get caught. The scam artists search the obituaries where they find valuable information that gives them a jump start at identity theft. Lengthy obituary and death notices gives crooks more valuable information that they use to do more damage. Identity theft crimes involving the deceased are a dark, shady side of the booming identity theft crime.

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Loan Modification - credit killer!

In Part One of our loan modification post, we discussed the fact that banks are sending unsolicited offers of loan modification to mortgage holders. These deals, which often involve a change from adjustable-rate mortgages (ARMs) to fixed-rates or partial “principal forgiveness” make a lot of sense from a purely economic standpoint: the banks get to clear their books of “toxic assets” and you get a lower mortgage payment. Unfortunately, the results can ding (or even wreck) your credit score.

 

There are a number of reasons why this is the case. First, the bank reports activity on your account to credit bureaus, which then alter your credit score accordingly. If you modify your loan and the bank submits “settled for less than the full amount due” to a credit bureau, that’s going to hurt you. And while this is technically true, a tiny line item leaves out the important information that it was, in fact, the bank that suggested the modification in the first place. To avoid this, make sure you ask specifically how the bank is going to report the change. If they don’t give you a straight answer right away, be clear that you’re trying to avoid “settled for less than the full amount due”.

 

Further, if the loan modification requires a trial period, especially one that lowers your mortgage payment, that trial period can damage your credit, as the bank will have to report the payment as less than what you owed, even though it’s the amount of money the bank is expecting, and will not respond to the customer as if anything were out of order.

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Loan modification – is the lower payment worth it?

If you’re like an increasingly large number of Americans, you’ve recently received a letter from your bank. And if you’re lucky, it’s not a notice of foreclosure--it’s a letter announcing an offer for a loan modification. The banks are handing these things out like candy these days, and most people, especially those with banks that already have a tendency to try to upsell to their customers, are suspicious.

 

A lot of these loan modifications include options to switch an adjustable-rate mortgage (ARM) to a fixed-rate mortgage, partial debt forgiveness, and other bells and whistles. And, while the banks are not doing this out of some sudden bout of philanthropy, many unsolicited loan modifications are a good deal for both parties. Before we continue, never ever assume that all loan modification offers come from reputable sources because most are paid advertisements. There are scammers out there that will take you for all your worth if you aren’t vigilant. Real loan modification offers should come from the bank that handles your mortgage.

 

Banks are trying to get ARM loans out of their systems--they’re far more likely to end in default than fixed-rate loans and the government views them as “toxic assets”, which in turn can affect how the government and investors deal with the banks. In short, a farewell to ARMs is a hello to more money for the bank.

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Most of us want a good credit report…

Most of us want a good credit report to obtain automobile financing, credit cards, and to purchase a home. But, beyond these consumer loans, your credit report can cost you in everyday living expenses. What you don’t know about your credit could be costing you money.

Having a credit card means that you can order tickets, rent a car, and reserve hotel rooms. Besides these conveniences, your credit report can mean that you must pay higher deposits and fees for everyday services.

Did you know that your credit history can keep you from getting utility connections, good telephone rates, the best auto insurance, home owner’s insurance, or even keep you from getting hired?

1. Some utility companies set minimum standards for service connections. If your report shows collection accounts for prior utility bills, you may not be eligible for service at all. And if utility companies do agree to connect your service, you’ll need to pay a higher deposit than another customer with good credit who may not need to make any deposit.

2. The same requirements exist for telephone services. People with a good credit history don’t need to pay deposits for home telephone or cell phone services. When we first got a cell phone with poor credit scores, we had to pay a 0 deposit, for one cell phone. After fixing our credit, we got eight cell phones for our business, with zero deposits.

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Overdue Library Books Can Hurt Your Credit Score

As municipal governments increase efforts to collect unpaid parking tickets, dog-catcher fines, library fines and the like, some consumers are seeing a surprising impact—a radical drop in their Credit scores.

To each individual Consumer, the fines in question may be very small and Collection actions may seem petty and unnecessary. For many cities, however, these unpaid fines and fees add up to millions of dollars a year. Those dollars can be collected with little investment by the cities if they’re turned over to private collection agencies.

Private agencies typically charge a percentage of the balance actually collected, so there’s no risk to the government. The risk to consumers who don’t make those payments in a timely manner, however, is significant. That’s because collection agencies report delinquencies to the three major credit reporting agencies. A single collection item can drop your credit score as much as 100 points. Many consumers don’t know that charges like this can affect their credit.

While not all municipalities use private collection firms, the trend is increasing across the country. As government collection activity rises, so does the number of consumers surprised to discover that they’re paying higher interest rates—or being turned down altogether—because the kids lost a library book or they neglected to renew Rover’s license.

If such charges are already appearing on your credit report, you may be able to negotiate their removal in exchange for payment. Getting items removed from your credit report can be a long and stressful process, though, and there’s no guarantee that you’ll be successful. The best defense is to be aware of the risks and make sure you pay those parking tickets on time.

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