Archive for January, 2008
How Did This Happen? If you are in financial trouble, and the creditors are calling daily to dun you, you need more than a stiff drink and a night out to relax. You need serious help! If your difficulties are not the result of major life events, such as medical problems, divorce, loss of job, then you have to look at how you got where you are. Chances are you got to this point because you lack basic personal financial responsibility. Don’t beat yourself up over this – you are not alone, and financial responsibility is not simply acquired by osmosis or instinct. It is a skill, acquired through good teaching, practicing, and having good adult role models as you grew up. Help Is Out There You need to find a good credit counselor to help you out of your current jam and to get you on a lifelong path of responsible spending. Fortunately, with some investigation, and some “comparison shopping,” you should be able to find a good one. There are a number of federally-funded or religiously-sponsored organizations that provide credit counseling for free. For-profit credit counseling services charge a fee, but many provide additional services for their fees, so do not discount them immediately. As stated, do the research and find out exactly what each counseling service offers. Then compare your needs to their services. Pick Your Poison Debt counseling is not fun, but it is important that you choose the service that can best meet your needs. Among services offered are the following:
Credit counseling can provide two important services – assistance with your immediate debt problems and the development of long-range education, planning, and counseling as necessary to alter your behaviors. Tagged under:Credit
Credit cards debts have limitations just like other types. Time All states have laws stating the legal statue of limitations on debts of various types. The exact time frame varies from state to state. Some states have statutes of limitations as low as 3 years, while one allows a full decade before it is removed from your responsibility. Legalities Many people do not realize that there is a legal statute of limitations on credit card debt. In fact, there is a time limit for all forms of debt. After the statute of limitations has expired in your state, you cannot be held legally responsible for your debts. This only means that the debtor cannot take you to court on the issue; it does not mean you can no longer choose to repay it. Collection agencies are legally required to follow certain procedures when attempting to collect debts; one of these standards is that they cannot threaten legal proceedings after the statute of limitations has run out. This is required by the Fair Debt Collection Practices Act. This act is federal law; it is the same regardless of the state in which you reside. Also, it should be noted that not being present in the same state is not considered a viable excuse for violating these procedures. This is why many good collection agencies will not mention litigation regarding delinquent accounts at all—it is simply too difficult to keep the different statutes straight. Credit: Although you cannot be legally forced to pay a delinquent debt past statute, it does not disappear. It will likely still be on record with the debt holder. More importantly to most people, it will still appear as delinquent on your credit rating for another 5-7 years AFTER the statute runs out. Debts that severely delinquent can damage your credit rating heavily. Individual States: As of October 2006, each state had the following statutes of limitations: for Alabama, Arkansas, Delaware, the District of Columbia, Kansas, Louisiana, Maryland, Mississippi, New Hampshire, North Carolina, Oklahoma, South Carolina, Virginia, and Washington each have 3 years. California, Florida, Georgia, Idaho, Nebraska, Nevada, New Mexico, Texas, and Utah all have 4 year limits. Illinois, Iowa, Kentucky, Missouri, and West Virginia have 5 year statutes, while Alaska, Colorado, Connecticut, Hawaii, Indiana, Michigan, Maine, Massachusetts, Minnesota, New Jersey, New York, North Dakota, Ohio, Oregon, Pennsylvania, South Dakota, Tennessee, Vermont, and Wisconsin have 6 year limits. Wyoming has an 8 year statute, while Rhode Island has a full 10 years before you are no longer responsible. Tagged under:Credit
The balancing act Throughout the course of your life, you’re likely to encounter dozens of different types of debt. You’ve got your couple of credit cards sitting in the wallet, that department store card that never seems to get paid off fully, your car payments and, of course, your mortgage. Chances are your mortgage is going to be the highest level of debt you currently have on the books, meaning you’re throwing much of your paycheck at that every month. But that doesn’t mean the other forms of debt aren’t important, too. In fact, you may feel satisfied about paying off the mortgage every month because it means you own a little bit more of your house than you did the month before. But throwing a few hundred dollars at a credit card to pay off the tab on a bunch of clothes that you don’t wear anymore can be significantly less rewarding. Still, you must learn to balance all your debt and treat them equally. After all, they all affect your overall credit score. Combining your consumer debt and mortgage So, how can you attack all your debt at once without sacrificing your house? One option for you might be to roll your consumer debt into the mortgage that you are already paying. Effectively, you will be borrowing money against the mortgage to pay off the consumer debts that you have elsewhere, meaning you can pay off your high-interest credit cards and other forms of debts and simply make one monthly payment instead of multiple payments. This can be very effective, if for no other reason, because it allows you to get better control over the payments and allows you to know and understand what you owe every month. Many Americans struggle to make payments simply because they forget to make payments on time. By rolling all your debt into your mortgage, you can avoid this and still pay off your debt at one interest rate. Things to be wary about Just because some mortgage companies offer you the opportunity to roll your consumer debt into your mortgage doesn’t mean that you’re home free. For one, you should understand that rolling over your consumer debt into your mortgage doesn’t eliminate the debt. You may save yourself money but you won’t eliminate the debt. You’ll simply owe more money on your mortgage. Also, rolling over consumer debt should give you the opportunity to think about where you are spending your money. Get rid of all your credit cards except one. Pay off any loose department store card payments that you may have forgotten about. Overall, think about your credit history and how you can avoid amassing more consumer debt. In the long run, using your mortgage to pay off your other forms of debt should be helpful not hurtful. So act responsibly and, of course, be careful about financing your debt with a credible lender. Tagged under:Business
Create a budget that works for you Everyone wants more money. Regardless of how much money you make every year, there are ways to maximize your income and put more money into your pockets and bank account. For instance, did you know that by consolidating your debt or simply making payments on your bills every month, you can actually save money? More on that later, but to start, if you’re interested in having more money every month, make a budget for yourself. First, figure out how much money you make per week. Then, sketch out the normal debts you incur per week. Find how much your bills typically cost, how much groceries, rent, a mortgage or other necessities will cost you. And figure in any extra costs (going out on the weekends, shopping, etc.) that you normally spend. By doing this, you can see how much money you’re bringing in every month versus how you’re spending. It will allow you to make adjustments accordingly. By simply cutting out one or two typical expenses, you may be able to save thousands of dollars every year! Pay your bills on time If you are currently in default on the payment of some form of debt, you know how that can impact your monthly income. Paying bills on time is extremely important for keeping your financial situation strong. A $5 late fee may not sound like much, but over the course of the year, on various late fees, you could cost yourself hundreds of dollars. Late payments on credit card payments are even worse. If you fail to make a payment on your credit card or student loan, not only will you cost yourself money, but you could cost yourself valuable points on your credit report. By paying your bills on time, you will be able to manage your money much better and keep your financial sanity throughout the course of the year. Write everything down Most Americans do a very poor job of documenting the amount of money they spend each week. Pack of gum? Oh well, it only cost 50 cents. Right? Wrong! Every day, you probably waste at least a few dollars every day that could be put to much better use. Try this: Go home every day and write down the amount you spent that day and what you spent in on. By doing this, you’ll know where part of your income is going every month. If you’re budgeting your money well, this could be added as an expense to your weekly budget. You can then see how much you’re spending per day and how you could better manage your money during the course of the year. There is income out there that you are spending recklessly. Do something about it today. Tagged under:Business
The advantages of a 0% balance transfer Everyone needs a little bit of help from time to time when it comes to money. Think about it. Don’t you remember a time in your life when you needed to borrow a few dollars or asked for an extension on a debt you owed? Of course you can. Much like those times, a 0% balance transfer on a new credit card can be very helpful to you. First, you get to transfer the money (or, at least, a portion of the money) on a high-interest credit card onto a credit card that will hold an introductory 0% rate. Plus, with a 0% balance transfer, you won’t pay anything for making the transfer. This allows you to simply make the minimum payment every month on the card without accruing any additional fees or costs, provided you make your payments on time. It will also decrease the costs on your other card because the interest rate will be applied to a lesser amount. In these ways, a 0% balance transfer can greatly help out your credit situation. But there are some disadvantages, too! Many Americans get intrigued and then fooled by 0% balance transfers. Essentially, credit card companies are handing you a free line of credit for a certain number of months. However, this causes many people to simply make the minimum payments and forget about the balance. Companies are banking on this and will take the risk that you won’t pay off the credit card fully. As soon as the introductory period is over, you’ll start getting hit with normal interest rates and be forced to make payments on two credit cards now. It certainly is not the end of the world but you should have a plan before applying for a 0% balance transfer on a new credit card. Think about how you’re going to attack your debt and then do it! How to decide whether you need a 0% balance transfer Before you even think about applying for a 0% balance transfer, think about how it will help you—and how it could hurt you. Are you prepared to do everything you can to make payments on the new card and eliminate the debt before the introductory period ends? Are you prepared to make the transfer and then make payments on your other card or cards? Can you avoid racking up new debts on the old cards? If you can answer “yes” to all of these questions, then a 0% balance transfer could help you and your credit situation immensely. But before you apply, do your research and decide how you’re going to attack your debt. Tagged under:Business Uncategorized |