Debt Consolidation Blog

Archive for July, 2011

Many married couples find themselves mired in debt with little hope of a way out. Some people try to maintain a lifestyle which is simply not within their budget. This can create a difficult financial situation for both parties involved. It is even more difficult when one partner has different spending habits than the other and lacks the financial skills to properly manage their debt. When the situation becomes unmanageable, a bankruptcy filing is usually the end result. Here you can find some basic information about the effects of marriage on a bankruptcy filing.

When a couple is considering filing for bankruptcy there are two options available to them. They can either do an individual filing or a joint filing. In the case of an individual filing, it is usually the partner who has accumulated the most debt in their name who files for bankruptcy. The option to file jointly is best utilized when both spouses have an equal amount of delinquent debt. A couple can also choose to file jointly when they have most of the debt in both of their names. The decision to file individually or jointly is often a point of concern for many couples. There is often the mistaken notion that if one spouse files for bankruptcy, creditors can pursue both parties for the repayment of debt. However marriage itself does not make the non-filing spouse legally responsible for the other’s debt. Unless the accounts were in both names, only the spouse filing for bankruptcy is responsible for repayment.

The legal ties of marriage do affect some aspects of the bankruptcy proceedings. In the event of a Chapter 7 filing, a means test is conducted to determine the ability of the household to repay its debt. This debt takes into account a combined income regardless of whether the couple is filing jointly or individually. The results of the means test can affect the amount of debt that has to be repaid as well as the time limits for its repayment.

In the case of property owned within the marriage, some states allow for protection of property acquired before the marriage while others consider all property from each spouse to be communal. In certain states, property owned by the bankrupt individual is considered for inclusion as well as half of the non-filing spouse’s property. This is called ‘equitable distribution.’ Depending on the state in which you reside, a bankruptcy filing may put property that the non-filing spouse owns at risk.

The stipulations surrounding marriage and bankruptcy can be complicated. It is best to consult with an attorney before making the decision to file for bankruptcy. A bankruptcy lawyer can offer counsel on the best way for a married couple to file. In addition a qualified lawyer will possess sufficient knowledge of state laws to best determine the division of property for each couple. A bankruptcy filing can be a complex procedure, however by familiarizing yourself with the basics, you can have an idea of what to expect when considering a bankruptcy filing while married.

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Many people wonder about prestige cards such as the American Express black card. They want to know how to get access to them and what they are all about. The truth is that many of these cards are extremely exclusive. There is often no application online for them and instead they are by invitation only. Expounding some of the myths and facts behind obtaining a prestige card can assist individuals in dispelling some of the mystery surrounding them.

Some of the more popular prestige cards include the American Express Centurion card (AE Black Card), the World MasterCard and the Visa Signature Card. Traditionally, offers for these cards are extended to business executives and those with a high income bracket. An income range of between $125k to $250k a year is the normal range to receive an offer for a prestige line of credit. Additionally, individuals must have a stellar credit history with an exceptionally high credit score. Although in the past these cards were limited to a select few, with increasing competition among card companies, it is more accessible to the layperson. If your income range and credit are up to the standard requirements, you may receive an invitation for one of these prestige credit cards. You may also contact your card issuer for more information about how to qualify.

Being granted access to a prestige card line of credit carries with it many benefits. Some of these perks include personal assistants, personal travel agents, backstage passes, hotel benefits, access to certain airport lounges, complimentary flight tickets and many more. Some cards also offer cardholders access to front row tickets for shows and major sporting events. It is also possible for the consumer to create a customizable rewards program. All these benefits are very enticing however there are costs associated with holding one of these exclusive credit cards.

Most of the prestige cards come with a yearly fee which can exceed $2500 in charges. In addition, there is a monthly spending limit that must be met or even exceeded. This is where many people get the concept that these cards have no credit limit attached to them.  However in reality, there is a spending quota that must be met each month. Additionally many of these cards also carry with them an initiation fee which can total upwards of $5000. There are also exceptionally high interest rates associated with prestige cards which could make carrying a balance on them very costly.

These cards were designed for those with a high profile lifestyle. Although these prestige cards come along with many benefits, there are usually strict requirements that must be met before owning one. They are meant to be used by those with a large amount of purchasing power who will most likely pay their bills in full each month. Although these prestige cards are becoming increasingly available to the everyday person, it may be more beneficial to use a card with a smaller spending limit and traditional benefits.

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For those consumers with less than stellar credit, it can be difficult to receive an offer for credit. It can be a difficult “catch 22” when those looking to improve their credit score need a credit card to be able to do so. There are generally two ways for those with lower than average scores to gain access to credit and raise their overall credit scores. These include applying for either a secured credit card or a subprime credit card.  Understanding the differences between the two can help an individual decide which choice is best for them.

The subprime market has increased over the past year. Banks and lenders now have a wider target market due to the recent economic downturn. As such, there is intense completion among these credit companies to extend offers of credit to consumers. A credit score of between 620 and 660 is the usual range for an offer for subprime credit. These offers are extended by credit card companies such as Capital One and HSBC. The subprime credit cards carry a much higher APR than traditional cards and can be as much as 20%. This is an increase from 17.6%; last year’s average interest rate for subprime cards.

In addition to high interest rates, subprime cards also carry high annual fees that can exceed $39 per year. Subprime credit cards do not typically have a high credit limit and the average amount a consumer can expect to receive is between $300 and $500. After a period of six months, consumers will be able to raise their credit limit. Although these terms may not seem very appealing, for those with subpar credit a subprime card can be a useful tool for repairing credit.

Secured credit cards are another option for those with a negative or limited credit history. To receive a secured card, an applicant must place a deposit with the card issuer and in return, they will receive an extension of credit for the deposited amount. Interest rates are typically much lower than subprime credit cards and can range from 7% to 9%. With a secured card, your payment history is regularly reported to the major credit reporting bureaus allowing for an improved credit score over time.

When choosing between a subprime card and a secured card, it is best to compare the fees associated with both. Secured cards require a significant upfront deposit of a few hundred dollars. If this is not an affordable option, a subprime credit card with no upfront deposit may be a better short term match. The downside is that the higher interest rate and annual fee may cost more in the long run. Whichever option is chosen, it is important to make consistent on time payments to ensure a raised credit score and increased credit limit with more favorable terms.

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If you have fallen seriously behind on credit card debt, the credit card companies are well within their legal rights to sue. In fact, they can sue an individual after just 60 to 90 days of delinquent payments. If you have been sued for credit card debt and are unsure of the proceedings, the facts outlined here can shed some light on how the process works and what you can do to resolve the situation.

Although it is a rare occurrence, it is possible for a credit card company to sue for unpaid debt. However most companies will attempt to settle the debt for less than the amount owed or they will sell the delinquent account to a debt collection agency. A credit card company is likely to sue in the event that the debtor is avoiding payments through fraudulent actions. However a lawsuit filed by a credit card company against an individual is an expensive and time consuming endeavor and is not a typical debt recovery tactic.

When a creditor does pursue legal action, there are some protections set up for the individual. The primary one is that of the statute of limitations (SOL). This prevents any debt recovery actions from taking place in the event that the time period for recovering the debt has expired. The statute of limitation varies from state to state and is different for each type of account. An individual facing a law suit from a creditor should check the laws in their state to see if they are protected under the SOL.

In the event that an individual is not protected under the statute of limitations for their state, then the creditors can take full legal recourse against them. If the creditor decides to go ahead with the lawsuit proceedings, a judgment in their favor may make you liable for the full amount of the debt plus penalties, interest, attorney fees and court costs. This judgment may even give credit card companies the right to garnish your wages although this varies from state to state.

If you have found yourself being sued by a creditor and the statute of limitations has expired, there are action s you can take. Begin by sending out an SOL notification letter making sure to include the specific dates of when you defaulted and when the account was charged off. Enclosing a copy of your credit report with these dates highlighted can also serve as proof of SOL expiry. If your statute of limitations has not expired, at the very least you will want to respond to the court summons. Responding to the court summons will prevent your creditor from receiving a default judgment in their favor as well as give you some more time to negotiate a settlement.

Although being sued for credit card debt may seem intimidating, being aware of the process and knowing what to expect can make the procedure less stressful.  Employing the services of a legal professional can assist you in navigating the complexities of a law suit. If hiring a lawyer may prove to be too costly, it is also advisable to consider a consultation with a paralegal who may be able to offer similar advice.

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A balance transfer is an efficient debt management tool that if used well, can assist you in repaying your debt quickly. There are several credit cards available that offer balance transfer options to consumers. Knowing which offers to take advantage of as well as the facts associated with transferring a credit card balance can assist you in making the most financially savvy choice.

When considering making a balance transfer, it is best to investigate the various options available and to compare different credit card offers. Some credit cards have more attractive offers than others and it is necessary to read the fine print before coming to a decision about which card to transfer your balance to. One of the first considerations to make is the APR of the new credit card. Look for a credit card offering a low introductory APR. Typical introductory offers range from 1% to 2% and can sometimes even be as low as 0%. This introductory offer is only extended for a short amount of time such as six, nine or twelve months. After that time, the offer will have expired and you will be paying the traditional interest rate.

After you have chosen the card with the lowest introductory APR for the longest term you will have to make a few other considerations. Many cards offer low introductory APRs for the transferred balance but not for new purchases. For this reason, if you are using your balance transfer as a debt management tool, it is best not to incur additional charges until your old balance has been paid off.  Additionally, if you continue to charge on your new card, any payments made will be applied to the old balance first. This leaves the new balance unpaid longer incurring more debt at a higher interest rate.

The fees involved with a balance transfer are another factor which may affect the decision of which card to transfer your balance to. Many card issuers charge a fee to transfer your balance over to their card. This fee can sometimes be a percentage of your balance and in some instances it may show up on your bill as a new charge which is calculated at a higher interest rate.

A balance transfer is a great debt management option that offers ease and simplicity. By researching the various credit card offers available, it is possible to choose an optimal card with attractive terms. As with all new credit card applications, it is important to review the fine print for each card offer to make sure you have full understanding of the terms and conditions. Some cards with a low introductory offer will not extend this offer to applicants with a low credit score; instead they may approve the application at the standard interest rate.  This is important to be aware of before applying for a new credit card offer with the intent of transferring your balance.

After the initial introductory APR period has expired, if your balance is not paid off, you may want to consider transferring your balance to another card. To avoid too many transfers, the key is to pay off your balance as swiftly as possible by making larger than normal payments. The faster you can repay your balance at a 0% interest rate, the better financial position you will be in. Utilizing these tips and guidelines can assist you in using balance transfers as a savvy debt management tool.

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Applying for a credit card with bad credit can seem like a pointless endeavor. With the recent constraints of the economy, lenders have become increasingly reticent to extend credit to borrowers. Banks and credit card lenders alike have watched accounts in good standing quickly deteriorate as job loss and unemployment rates skyrocket. However difficult it may be to secure credit, it is not an impossible task. By following some basic guidelines, it is possible to gain access to credit while rebuilding your score over time.

When considering filling out an application for a credit card it is best to find one suited to your financial situation. One of the nest means for obtaining access to credit and rebuilding your credit rating is through obtaining a secured credit card. These offers are available through several lenders such as bank of America and Citibank. The way it works is the borrower provides the capital that they will be borrowing against, thereby allowing the creditor to carry no risk whatsoever. An individual can put down anywhere from a couple hundred to a few thousand dollars to obtain an interest bearing card with a balance matching the deposit amount. If the borrower defaults on payments, the lender can then take from the deposit to cover the balance.

Another method for obtaining credit is by adding a statement to your credit report. The credit reporting bureaus allow for a 100 word statement by the individual where they can explain any negative accounts, missed, or late payments. If illness or job loss affected the ability to make payments on time, an individual can notate the details here and can point to a previous on time payment history to demonstrate that the unforeseen incident was the reason they  fell behind. Although not foolproof, some lenders may be willing to take the statement into account when making a credit decision.

If you are a member of a credit union, you may find it beneficial to apply for their credit card. Banks and credit union sometimes look more favorably on an applicant if they are a member or customer of their institution. That being said, credit score may still be a determining factor when applying with your local bank as they must protect themselves against a high credit risk applicant. The slower but more guaranteed method is to simply build up your credit score over time by paying down past debts and making payment arrangements for accounts that have been placed in collections. Although this method may take a few months, it will be worth it to be approved for a card and increase your score over time.

There are no magic solutions for receiving credit card approval from an unsecured card issuer, however it is still possible to obtain credit. By applying for a secured card and making consistent, on-time payments, you will be able to increase your credit score and better your chances of receiving an unsecured card. It may be a time consuming process to fix your credit, but in the end, it will be worth the reward of an increased credit score and subsequent credit card approval.

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FDIC stands for Federal Deposit Insurance Corporation. Although most people are aware of what the FDIC is, there is not as much knowledge about exactly what funds are insured by the FDIC and what those insured amounts are. Having a comprehensive knowledge of the basics of the FDIC can assist consumers in making sound financial choices in regards to their banking practices.

The Federal deposit Insurance Corporation offers protection of consumer’s banking funds in the event that the bank becomes insolvent. The corporation is not a direct government institution but is instead an independent agency of the government. It was established under the Glass-Steagall Act of 1933 which was set up to pacify citizen’s fears over the safety of their bank deposited funds. Although this agency insures the majority of bank funds, there are certain limits to the amount of funds that are insured.

The amount insured by the FDIC is a total of$100,000 at member banks. The FDIC also insures up to a total of $250,000 for individual retirement accounts. It is important to be aware that the insurance only extends in the event of bank failure and doesn’t insure account holders against other types of emergencies. If the funds in the bank are subjected to theft , account errors or fraud, the FDIC will not be able to offer any reimbursements for the amount lost. Additionally the FDIC does not insure any funds placed in a credit union, instead these are insured by the National credit Union Administration for an amount of up to $100,000.

There are different types of accounts that are insured by the FDIC. These include individual retirement accounts, savings and checking accounts, certificates of deposits (CD’s), money market deposit accounts (MMDA’s), cashier’s checks as well as interest checks.  These are all covered up to the maximum monetary limit against bank failures. It is important to be aware of the accounts which the FDIC does not insure. These accounts are typically investment vehicles and include stocks, bonds, insurance and annuity accounts, mutual funds and savings bonds. Also among the uninsured are any items kept in a safety deposit box.

Although there is a limit to the amount insured by the FDIC, there are ways to circumvent the limit. By opening accounts with various banks, it is possible to have more money insured at one time. It is also possible to have more than the 100k limit insured if you share joint account ownership with another individual. In the case of investment vehicles it is possible to withdraw the interest earned and place that amount into an FDIC insured account. For the best advice about insuring account not covered by FDIC insurance, one should consult with their financial advisor.

Becoming aware of the types of accounts insured by the FDIC as well as the monetary limits can assist consumers in making the best choices for where to place their funds for optimal protection.

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Many students enter college with the hope of graduating in a few years with a dream job that affords them a comfortable life. However this is often not the reality. Job shortages often have college graduates competing for entry level jobs that pay little more than minimum wage. Additionally, they are left with mounting debt incurred from years of school loans which often come due immediately upon graduation. One solution is to opt for a career that offers a forgiveness loan. Many states offer incentives for students to enter fields that have a large shortage. By choosing one of these careers students can graduate debt free and with a career that offers a comfortable wage.

One of the forgiveness loans available to graduates is the Federal Perkins forgiveness loan. This loan is for librarians who work at a public or non-profit elementary or secondary school. Under this program, librarians can qualify for up to 100% forgiveness of their entire Federal Perkins loan. This generous loan forgiveness program offers graduates an opportunity to specialize in their chosen fields. In exchange for the loan forgiveness, they simply have to be employed as a librarian for a period of time.

Another loan forgiveness program is offered in Maine for those graduates with a degree or certificate in childcare. Under this program, graduates must teach in a qualified position or be employed at a childcare facility. Maine also provides health professionals with loan repayment options. Depending on the location, type of practice and populations served, professionals may receive up to 50% forgiveness for each year of practice. There are forgiveness options available as well for dentists who practice in specific underserved areas. The amount of loan forgiveness could total 100%.

Several states also offer loan repayment and forgiveness options for professionals entering into the veterinary or agricultural fields. Pennsylvania offers an Agriculture Education Loan Forgiveness (AELF) program that forgives up to $2000 per year with a maximum of $10,000. This loan is primarily for agriculture or veterinary graduates who return to Pennsylvania to open a practice or operate a farm. Iowa is another state with incentives in these fields. Iowa graduates who teach in the field of agriculture and life sciences are eligible to have up to $9,000 of their debt forgiven. In Minnesota, graduates of the University Of Minnesota College Of Veterinary Medicine who practice for a minimum of five years in the field of food animal agriculture are also eligible for loan forgiveness.

There are many loan repayment plans and forgiveness programs available to graduates of varying degree fields. It is a good idea for students who are unsure of what field to enter into to consider one of these areas of study. Student loan debt can be time consuming to repay and can be an added burden when attempting to become established after graduating. If there is an opportunity for debt forgiveness loans in your state , it is wise to take advantage of this generous option for debt forgiveness.

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Many individuals burdened by credit card debt find themselves desperate for a way out. They are in a vulnerable position and can be easily taken advantage of. Unfortunate though it may be, debt repair scams do exist to prey on these individuals who are seeking a way out. To protect oneself from debt repair scammers, it is important to know what to look out for and what methods to utilize to protect one from fraudulent practices.

The credit and debt repair business has increased drastically in size over time. A declining economy left many people jobless and facing payments on loans that they could no longer pay. Those seeking to avoid filing for bankruptcy turned to debt settlement companies to help repair damaged credit and to assist them with loan repayments. Although there are many reputable companies available who provide this much needed services, there are also fraudulent companies who seek to solicit personal information for their own gain. These companies may advertise through junk mail, pop up ads or email solicitations.

One may wonder how it is possible to tell the fraudster from the legitimate company. Thankfully there are methods you can use to determine whether a company is legitimate. Under a law known as the Credit Repair Organizations Act, debt relief companies are mandated to perform certain actions in conjunction with an application for debt relief. These include providing customers with a copy of the “Consumer Credit File Rights under State and Federal Law” and providing a copy of the contract you will be signing. Beware of a company that does not adhere to these mandates.

An individual should also be wary of debt relief companies who request funds before services have been provided, promise to remove information from your report that is accurately reported or asks you to sign a form waiving your rights under the CROA. These are all warning signs of a potentially fraudulent company. Your debt relief agency should provide you with a contract which has certain specifics outlined in clear and understandable English. These specifics should include the name and address of the company, the date that the services will commence and the length of time, a statement informing you of your right to cancel within three days and details of the services they are providing along with associated fees.

To protect against scams and fraudulent debt repair companies, it is best to do a check of the business with the Better Business Bureau. Although companies are not required to register with the bureau, if they are registered, you will be able to view their letter grade as well as a report describing their responsiveness to customer complaints. If you have been the victim of a debt repair scam, there are actions you can take. Begin by reporting the company to your state attorney general. You can also send a letter of complaint to the Fair Trade Commission as well as the Better Business Bureau.

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Many people are unaware of the availability of credit card insurance. However this little known insurance option carries with it several benefits.

Credit card insurance can protect you in the event that an unforeseen circumstance such as illness or job loss prevents you from making your payments on time. You can obtain credit card insurance from your credit card issuer. At the time you are receiving your credit card after you have been approved, there will usually be an insert with an offer for credit card insurance. This offer will have an explanation of the terms and conditions for the insurance. Credit insurance exists for various purposes. There is credit property insurance, credit disability insurance, credit life insurance and involuntary unemployment insurance.

Credit card insurance is usually only offered by the credit card issuer and as such, the payments and terms associated with it are non-negotiable. The terms will usually be offered at a low bulk rate such as $0.75 cents for every $100 dollar balance carried on the account. This amount is charged each month depending on your balance at the time. Because this amount is set by the credit card issuer, consumers are unable to switch policies for more optimal terms. However each state does have mandates on the amount that credit card issuers can charge. This amount varies from state to state so it is important to review the terms that apply to your state before making a decision to purchase credit insurance.

Many financial experts do not traditionally recommend credit card insurance as an option for consumers. There are other types of insurance that also offer protection for your bills and credit card payments in the event of an emergency. Life insurance as well as disability insurance offers these protections while also having a variety of additional benefits. For those who do not have access to these insurance options, credit card insurance may be a reasonable alternative.  In fact, one of the benefits of credit card insurance is the relative ease of making a claim and receiving funds.

Credit card issuers cannot mandate insurance as a condition for credit approval. Under law, they are prohibited from doing this so any offers for credit that have insurance as a requirement is illegal. In addition, if you have already opted for credit card insurance, you can cancel it at any time.

Credit insurance may not be for everyone. However it is a good option if you are without any insurance at all and would like to ensure that your credit card payments are made on time. in the event of an emergency or unforeseen event this can be a great asset. In general, it is more advisable to maintain other forms of insurance which offer many more additional benefits.

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