A bad credit problem

A bad credit problem may have an effect on future borrowing, insurance premiums, and even acquiring employment. Debt counseling is available on the Internet for the consumer with bad credit problems. Look for a debt counseling agency who is accredited by the National Foundation for Consumer Credit (NFCC) when seeking answers. Find out the fees charged by a credit-counseling agency before enlisting their services. Some agencies offer a debt repayment plan which may only include unsecured debt such as card debt and other high interest loans. Financial issues may have some resolution through a debt counseling agency but make sure the agency is reputable. Find out how their program is tailored for a bad credit problem and if they will be able to eliminate or lower interest rates with current creditors.

Financial trouble won’t go away with the enlistment of a debt-counseling agency. A plan will need to be set in motion to try and repair a bad credit problem. The consumer has options online through various companies to get help with financial repair or choose to tackle this themselves. Some institutions online offer help with financial repair for bad credit problems. Do some research and check out various types of organizations. Many will charge fees for these services. If the consumer uses a company who specializes in debt consolidation loans they may have staff that can offer needed assistance. Learning to live on a budget and not use high interest cards for purchases are a good place to start. With any plan of action reform is needed along with that plan. Understand the reason for the bad credit problems and don’t make the same choices the next time around.

Some useful tips regarding a financial issue might include avoid impulsive spending, stop using high interest cards for purchases, make up a budget and stick to it, don’t make high-risk investments, don’t co-sign for someone who has questionable financial habits, and don’t buy on cards when it is unnecessary. Consumers with for bad credit problems can find assistance with their financial issues online and locally. The local phone book is a good place to start searching. Being a good steward with money is essential when trying to overcome a bad credit problem. There is a lot to be said for learning to live within one’s means. “Thou oughtest therefore to have put my money to the exchangers, and then at my coming I should have received mine own with usury.” (Matthew 25:27)

Consolidate Credit Card Debt - Eliminate Credit Card Bills Without Bankruptcy

If you are tired of running around with several credit card balances, loan repayments with various interest rates, or you simply want something more convenient, a credit card debt consolidation loan may be the best program for you.

All Loan Repayments in One Easy to Manage Monthly Bill

A debt integration loan will permit you to have simply one loan refund per month that will wrap all of your new loan repayments that qualifies. Your recognition cards and your medical bills are better examples of some of the unsecured loans that will qualify for reporting with a debt integration loan.

Unsecured or Secured Consolidation Loans

Interest rates shall be lower with a secured efficient debt integration loan than it will be for an unsecured one. You can opt to acquire additional financing on a secured loan because you will get collateral in your home. It’s known that unsecured integration loan are seen as a high danger for the loan party, which means you will get higher interest rates and a shorter repayment scheme at a lower whole price compared to the secured integration loan.

Even if your financial character grade is low, you will yet be considered for a locked integration loan. Your current financial status and the loan terms will determine if a secured or unsecured plan is the correct one for you. You might get to ratify your home over as collateral if you have a terrible financial grade.

Learn about Different Types of Consolidation Loans Available Online

One of the best ways to discover about distinct debt integration loans is to look online for data about prospective loan integration lenders. Request quotes from lenders and hold course of each party’s interest rates, the terms being laid down and what sort of loan payments will be qualified for coverage.

Add Up Your Bills and Determine Your Repayment Amount

You can calculate the overall refund sum for all qualified loan bills. This financial information will be needed before you can request a secured debt integration loan. You might want to check the difference between the refund total you are presently paying with the overall refund sum for each one of the quotes you will receive. To find the best consolidation loan, you must be able to study and cross-reference the different terms of the loans being offered at hand from each individual financial institution.

Crushing Credit Card Debt

The average American family is now over $7000 in debt just on their credit cards. That debt generates an interest charge of over $105 each month if your card charges the average 18%. If you have missed a payment or made a late payment (even by one day!), you may be paying up to 27% interest or over $157 each month.

Most credit card companies require a modest payment towards the card balance. Modest meaning from $10 to $20 a month. To pay off a $7000 debt at $20 a month you will not pay off this debt for 29 years.

And what about those interest charges? Paying off a $7000 credit card debt charging an interest rate of 18% and paying $20 a month towards the debt, you will pay over $18,400, more than TWICE the original debt, just in interest.

What if you have more than one card? What if your debt is over $7000? What can you do? How can you get out of this hole?

There are some techniques that can help you pay off your debt and do not require expensive loans, invasive credit checks, or expensive financial planners and accountants. You can also save on interest charges by paying off your debts in a certain order.

The most effective technique is sometimes called the “snowball” method. The snowball method suggests that when you pay off one debt you apply that payment amount to the next debt. Thus the amount you pay on a debt grows like a snowball rolling down a hill.

For example, you have three credit cards with debts of $5000, $4000, and $3000 which are charging you 18%, 27%, and 12%, respectively, and you are paying $150, $125 and $100 each month. By paying these required monthly amounts you will pay off your $3000 credit card first.

Now that the $3000 card is paid off you have an extra $100 a month. Put that extra $100 toward paying off your next credit card debt. Now you are paying $225 a month on the $4000 card and the $150 on the $5000 card. With this accelerated payment on the $4000 card you will pay off the card earlier and save some money on interest charges.

Then apply the $225 payment to the $5000 card for a monthly payment total of $375. Soon this card will be paid off and you will have $375 extra each month to pay off other debts or better yet, INVEST!

So, which debts should get paid off first?

Generally, you want to pay off the debts that are charging you the highest interest rates first. In the above example you could have added the $100 payment to the $5000 credit card rather than the $4000 credit card. But the $4000 credit card is charging you 27% where the $5000 credit card is charging 18%. By paying off the card charging the higher interest rate first, you will save some money on interest charges.

If this sounds too confusing, you can enlist your computer. You can search the Internet for the keywords “debt reduction calculator” or you can visit http://www.simplejoe.com/debteraser/index2.htm and review a product named Simple Joe’s Debt Eraser.

Simple Joe’s Debt Eraser helps you create a Rapid Debt Reduction Plan that is customized to your debts and your situation. Just enter your debts and the amount you can afford to pay each month. The software will create a plan telling you how much to pay towards each debt each month until they are all paid off.

You CAN pay off your debts. The trick is to stop charging purchases to your credit cards and develop a debt reduction plan. Your plan should include “snowballing” your payments and prioritizing the debts by high interest rate.

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© Simple Joe, Inc.
David Berky is president of Simple Joe, Inc. which sells the Simple Joe’s Debt Eraser PC software. Debt Eraser can help anyone get out of debt quickly and inexpensively by creating a Rapid Debt Reduction Plan. This article may be freely distributed as long as the copyright, author’s information and an active link (where possible) are included.

50 good things about being debt-free

I had a song running through my head when I was thinking about debt and then had an epiphany: Not since Paul Simon advised couples on “50 Ways to Leave Your Lover” has there been such a need for a new list.

I’m always telling people that they should deal with debt, and not “slip out the back, Jack,” but maybe I don’t dwell often enough on the sugar that comes after you take your medicine by paying off those bills.

Frequently Asked Questions About Debt Collection

Can a debt collector call me late at night? No, collectors can only contact you by telephone between the hours of 8:00 a.m. and 9:00 p.m. Early morning and late night calls are prohibited under the Fair Credit Collection Practices Act. A debt collector is charged with knowing what time it is in every region of the country so as not to call someone outside the allowable hours.

Can a debt collector leave messages on my answering machine? A debt collector can leave messages on your personal answering machine until you tell him to stop. A collector cannot discuss your debt with third parties, which means that he cannot leave messages regarding your debt on your employer’s answering machine or a relative’s answering machine. He can leave is name and number though, at least until he is asked to stop.

Is a verbal payment agreement with a collector enforceable? Probably not. You should get all agreements in writing, particularly since the collection industry has a high-turnover rate. Another collector might take over your account or your account might be sold to a third party. Be aware that even a written agreement might not be enforceable if your account is sold to another collection agency. But you should get all agreements in writing anyway as to protect yourself later on if you’re sued. A good written agreement (1) sets forth all material terms and conditions; and (2) is signed by both parties; and (3) is dated.

Does the collector have to accept my partial payments? No, they do not and many of them will claim that they won’t accept a partial payment. Collectors want you to send them a lump sum payment and they don’t care if you have to borrow it from a relative, skip your car payment or take a cash advance from your credit card. So they use very aggressive tactics to scare you in to paying the debt in full as quickly as possible. But the smarter thing to do is to pay them only what you can afford to pay them. Keep paying your house and car payments, don’t borrow money from relatives or your credit card and pay them only what you can afford each month. Send it in every month even if they keep sending it back. Keep proof that you’ve been trying to send them money. This will significantly reduce your odds of being sued, as most collection attorneys know that a judge, when presented with evidence that you tried to pay the debt, will yell at the plaintiff for wasting his time with an unnecessary suit when the defendant was trying to pay the debt. Eventually, most collectors will give in and accept the partial payments.

Is my agreement enforceable against a new collection agency? It isn’t that uncommon to find yourself dealing with a new collector or new collection agency when you owe a debt. For example, if the original creditor fires the old collection agency and hires a new one, you might suddenly find yourself receiving collection calls and letters despite the fact that you have a payment agreement with the old collection service. The agreement is not enforceable against the new company unless they choose to accept it; however, sending them a copy of it would help you tremendously in establishing a payment schedule with the new collection agency.

A collection agency keeps harassing me about a debt I don’t believe I owe. What can I do? Send them a certified letter asking that they verify the debt. (Sample letters are included in our debt kit.) Verifying the debt requires that they send you copies of documented proof that you owe the debt. There is a statutory period governing them, so you need to act as quickly as possible after that make initial contact with you. You can also ask them to stop contacting you since you don’t believe you owe the debt. Once you have told them this, they are barred under the Fair Debt Collection Practices Act from contacting you to try and collect the debt or putting negative information on your credit report. They can contact you to tell you they’re giving up all collection activity or they’re going to sue you.

A collector told me that he was going to call my employer and have my wages garnished. Can he do this? Not without a judge’s signature. The Constitution of the United States guarantees you “due process.” This means that a collector must sue you and the matter must be heard before a judge before your wages can be garnished. Your employer will not garnish your wages until he receives an official document from the court ordering him to do so. Remember that most threats of this nature are bluffs; however, if you think the collector will carry out the threat, then work out a payment agreement before you get sued. Don’t let the matter proceed to this point because a
wage garnishment is hard to reverse.

Does the Fair Debt Collection Practices Act apply to major credit card banks? No, it applies only to the collection attorneys and professional debt collection companies they might hire. Original creditors are regulated by state law; however, the major credit card companies follow policies that closely mirror those of the FDCPA and will comply with your request to stop phoning you at home and work, etc., just as if you were dealing with a collection service. If you believe you have been harassed by an original creditor, or that the original creditor has done something illegal or threatening towards you, then research your state laws on the subject and contact the proper authorities to file a formal complaint. Typically, the Attorney General in your state is the proper authority to contact.

Debt Problems: Can a Debt Collector Contact My Employer?

A debt collection agency may contact your employer to verify your employment, your work location, to find out whether you have medical insurance to cover a specific debt, or to garnish your wages. In order to garnish your wages, the debt collector must first sue you and obtain a judgment against you. Most states require debt collectors to make such inquiries of your employer in writing; however, they may allow the collector to contact the employer by telephone if no response is received within a few weeks of the written inquiry.

Can a debt collector call me at work about a debt?

Yes, a collection agency can contact you at work by phone or mail unless the debt collector knows or has reason to know that your employer prohibits you from receiving such communications. Any written communication sent to you at work must me marked “Personal and Confidential” and a debt collector may not reveal the reason for the call to your supervisor or any co-workers. If he does, he has violated the Fair Debt Collection Practices Act and you might have the right to sue him.

If you don’t want to be contacted at work, write the debt collector a letter asking him not to call you at work or send you notices at work because your boss forbids such activity.

Our downloadable debt kit will help you effectively deal with debt collectors and settle the delinquent account for significantly less than you owe.

State Statutes of Limitation on Debt Collection

Are you being hounded by a debt collector for an old debt you thought was written off years ago? If so, it is likely you are being contacted by a scavenger debt collector, which is a company that purchases older, mostly uncollectible debt for a tiny fraction of its value. Scavenger debt collectors are notorious for using illegal and unethical methods to collect “time-barred” debt.

You do not have to pay debt that is considered too old by your state. Every state has laws governing the time in which a person or entity can file suit to collect a debt. Generally, a creditor or debt collector gives up his right to file suit to collect a debt after a period of six years from the time the debt was written off (or the date of last activity on your credit report), but various states allow anywhere from 2 to 15 years to collect delinquent debt (see statutes of limitation table below).

The purpose of these statutes of limitation is to bring some measure of fairness to the debtor so that he / she (1) will not have to worry about being sued for the rest of their lives; and (2) so that the debtor can properly defend himself with fresh evidence and witnesses, if any.

This doesn’t mean that a creditor cannot file suit against you after the statute of limitations has expired; however, if a creditor or debt collector does file suit, you can ask the judge to dismiss the suit on the grounds that the statute of limitations has expired. In fact, if the statute of limitations is about to run on debt you owe, don’t be surprised if you suddenly hear from a collection agency threatening to sue if you don’t pay immediately.

If a debt collector contacts you regarding an old debt, do not admit that you owe the debt and do not agree to make any payments. Simply tell them that the “statute of limitations has run on this debt and do not contact me again”. If they continue contacting you, send them a certified letter, return receipt requested, telling them not to contact you about the debt again. Remember — DO NOT ADMIT THAT YOU OWE THE DEBT, DO NOT AGREE TO PAY THE DEBT, AND DO NOT AGREE TO SEND ANY MONEY TO THEM. If you do, then the statute of limitations might start running all over again, giving them the legal right to sue you.
How long can a debt collector collect on a judgment?
Can a debt collector garnish your wages?
What property is exempt if you file bankruptcy?
See also:
Debt Kit — Settle unsecured debts for less than half of amount owed
Credit Kit — Improve your credit rating and reduce monthly payments by $200+

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Debt Collection: Frequently Asked Questions
What are time-barred debts?
Federal Law Regulating Wage Garnishments
How to Handle Abusive Debt Collectors
Recording Conversations with Debt Collectors
How to Get a Collector to Stop Calling You at Work
State Statutes on Debt Collection
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How Long Does a Creditor Have to Collect a Debt from You?

The table below lists the number of years a creditor or debt collector has to collect debt in each of the 50 states and D.C. The statute of limitation usually begins running on an unpaid debt from the date of last activity or the delinquent account was written off as a bad debt by the original creditor. If you do not know what this date was, order your free credit report and check it out. The original creditor should list the date the account was written off or the date of last activity on your credit report.