Posted on January 11th, 2009 by Wayne
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Piggybacking is back and that is good news for consumers looking to boost their credit scores. Last year, the company that created the credit score Fair Isacc revised the Fico 08 scoring model to no longer allow folks to benefit from piggybacking, a process that allows consumers with weak credit to get a boost from others with higher scores.
For instance, you might want to help your teenage son start establishing credit by calling your bank and asking that he be added as an user on your account. Now your good record shows up on HIS credit file as if it were his. This was a great way to help raise or establish credit scores. Read more »
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Posted on December 10th, 2008 by Wayne
Debt Negotiators Online will help you navigate the maze of debt management options. How do you evaluate bankruptcy versus debt settlement to know which is the right option for you. There are actually 2 kinds of bankruptcy quite different from each other.
Here is a brief description of each:
Chapter 7 Bankruptcy
Chapter 7 is a liquidation bankruptcy in which all your non-exempt assets are sold or otherwise liquidated to create a fund to pay your creditor’s claims. In exchange, your debts are discharged which means your legal duty to pay those debts is extinguished. Although a Chapter 7 Bankruptcy discharges debts, it generally does not discharge liens. So, while the obligation to pay a mortgage note may be discharged - the mortgage lien is not. Therefore, in order to keep a mortgage company from foreclosing on its lien, you may agree to pay or reaffirm the mortgage note. If you have no equity in your home over and above the exemptions, you can keep the house even though you have been through a Chapter 7 Bankruptcy. If you qualify, this may be your best option. However, many consumers find that even though they are drowning in debt they actually make too much money to qualify and are forced into a Chapter 13 Bankruptcy.
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Posted on November 29th, 2008 by Wayne
The best debt settlement program is one that has your best interest in mind and not their own. Some debt settlement programs are very effective in helping you get out of debt quickly, while others put you on the fast track to bankruptcy. So how do you choose the right one?
An interesting article came out last week in an industry newsletter titled “Debt Settlement Companies Largely Ignored by Banks.” The article went on to explain that banks do not particularly like most such companies because of the wall that many of these companies put up between the bank and their clients. Read more »
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Posted on November 27th, 2008 by Wayne
Just came across this article by Susan Megge that makes a valid point about credit score and debt settlement: what is more important: keeping a high credit score (which may costs you much stress and worry about keeping up with payments) or clearing your debt with a temporary credit ding and lowering your stress by being debt free?
Susan says:
“You’re losing sleep and can barely make the minimum payments due on your credit cards. This situation is making you nervous and you can’t shake the sick feeling in the pit of your stomach because you’re always thinking about the money you owe and how you’ll be able to pay it back. ” Read more »
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Posted on November 26th, 2008 by Wayne
Yes. More often than not, being in debt, your credit accounts already have, or are, in the process of being reported negatively to the major credit reporting agencies. Depending on how long you have been delinquent in payments, negotiating and settling these debts for good will have an overall positive effect on your credit score. Settled accounts and or zero balances are seen as “positive” when compared to unresolved debts or a bankruptcy. This is even more important when you are attempting to purchase or refinance a home. If you have charge offs or collection accounts being reported, it is best to approach settlements prior to applying for a loan. Read more »
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Posted on November 24th, 2008 by Wayne
Consumers are often confused by the different options available to deal with crushing debt. The two most popular solutions are Debt Consolidation and Debt Settlement, each very different with distinct benefits and drawbacks. Deciding which solution is better for your own situation will require an understanding of your circumstances and financial goals.
When most consumers think of Debt Consolidation, they are actually referring to Consumer Credit Counseling (CCCS). A CCCS type plan is not a consolidation loan for you to pay off high balance credit cards, however many consumers identify CCCS companies as Debt Consolidation because they will consolidate all of your individual payments to creditors into one monthly payment to them. The goal of a Consumer Credit Counseling company is to reduce your interest rates and help you to pay off all of your debt within 5 to 7 years. Read more »
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Posted on November 24th, 2008 by Wayne
Debt Negotiators Online will help you navigate the maze of debt management. How do you evaluate the various options out there? Which option is right for you?
Here are your main options and some pros and cons:
1. Bankruptcy
If you think this is an option that you need to consider at this time, I recommend you meet with at least two competent Bankruptcy Attorneys. You need to know if you can qualify for a Ch. 7 or will be forced into a Ch. 13. Because of the new BK laws passed in 2005 liquidating everything and starting over fresh with a Ch. 7 BK is not as easy as it used to be. You now have to qualify. Many consumers find that even though they are drowning in debt they actually make too much money to qualify and are forced into a Ch. 13 BK. Chapter 13 is certainly not a pleasant experience to go through and in many cases will last for 5 years. Essentially it is a forced debt settlement plan that is overseen by the Trustee. Many consumers find that in a Ch. 13 BK they may still actually have to pay back all of the money that they owe. Again to learn the specifics of how BK would affect you, you must meet with a Licensed BK Attorney in your state. Read more »
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Posted on November 24th, 2008 by Wayne
A debt collector is any person who regularly collects debts owed to others. This includes attorneys who collect debts on a regular basis. A collector may contact you in person, by mail, telephone, telegram, or fax. However, a debt collector may not contact you at inconvenient times or places, such as before 8 a.m. or after 9 p.m., unless you agree. A debt collector also may not contact you at work if the collector knows that your employer disapproves of such contacts.
Debt collectors may not engage in unfair practices when they try to collect a debt. For example, collectors may not collect any amount greater than your debt, unless your state law permits such a charge, deposit a post dated check prematurely, use deception to make you accept collect calls or pay for telegrams, take or threaten to take your property unless this can be done legally or contact you by postcard. Read more »
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Posted on November 23rd, 2008 by Wayne
The Fair Debt Collection Practices Act covers personal, family, and household debts. This includes money owed for the purchase of an automobile, for medical care, or for charge accounts. If you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a debtor. If you fall behind in repaying your creditors, or an error is made on your accounts, you may be contacted by a debt collector.
Either way, the Fair Debt Collection Practices Act requires that debt collectors treat you fairly and prohibits certain methods of debt collection. Of course, the law does not erase any legitimate debt you owe. When contacted by a debt collection agency, it is important to know your rights (even if you owe the money). Read more »
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Posted on November 23rd, 2008 by Wayne
Debt negotiation is not the same thing as credit counseling or a debt management plan. It can be very risky and have a long term negative impact on your credit report and, in turn, your ability to get credit. That is why many states have laws regulating debt settlement companies and the services they offer.
Many debt negotiators may claim they are nonprofit. They also may claim that they can arrange for your unsecured debt typically, credit card debt to be paid off for anywhere from 10 to 50 percent of the balance owed. For example, if you owe $10,000 on a credit card, a debt negotiation firm may claim it can arrange for you to pay off the debt with a lesser amount, say $4,000. Read more »
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