… credit card policies which states that if you are more than 30 days late on any payment to any of your creditors, the interest rate on your credit card will skyrocket. This could be as much as two, three or even four times your original interest rate.  This provision can be particularly devastating for credit card debtors who are facing foreclosure, job loss or a medical emergency.  When financial crisis strikes oftentimes Americans must choose between paying the bills and putting food on …

Category: Managing Your Finances

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… their homes to their debts hoping that they can avoid bankruptcy.  But cashing out the equity in your home to repay debt may be a huge mistake here’s why:

When you cash out equity in your home to pay debt, you put your home at risk for foreclosure.  If you can’t repay that equity loan, the lender could foreclose.  And even if you were able to make payments on the loan, you may not be able to cover the cost of the mortgage (plus the equity loan) when you want …

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… not start with a judgment granted to a creditor.  The road to wage garnishment begins with your first missed payment.  For those facing a job loss, this is difficult reality to face.   But the truth is that if you cannot pay your debts you are already at risk for a wage garnishment. So the first step is to contact your creditor before you miss that first payment.  Contact them via phone and via letter.  Let them know what your situation is and ask for a …

Category: Managing Your Finances

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… foreclosure and received a mortgage modification that decreased the principal of your original mortgage, the lender will probably report the original mortgage as settled/charged off. A settled/charged off account is a large negative mark on your credit report but not as negative as an actually foreclosure.

If your mortgage modification does not include a reduced principal balance, then the lender may not report it as settled/charged off.  In this …

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Run all three of your credit reports.  Go to www.annualcreditreport.com now and get your credit reports for free.  Many debtors do not realize the extent of their debt troubles until they actually run their credit report.  Please take a careful look and challenge any inaccurate information.  If information is inaccurate the credit bureaus are obligated by law to change or delete …

Category: Economy , Managing Your Finances

Tags: Credit Finances foreclosure Health Insurance Taxes

One of the most common types of unsecured debt is credit card debt. However, sometimes credit card debt can transform into secured debt giving it a higher priority for repayment during bankruptcy.  How does that work?

When a debtor fails to repay their credit card debt, the credit card lender will eventually file a lawsuit against the debtor. While the debtor will have an opportunity to …

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… of a debt settlement firm are bilked out of thousands of dollars.  Don’t be a victim, do your research.

Category: Managing Your Finances

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You would never hand over your paycheck to a creditor, would you?  Of course if you were under threat or order by a court you may hand over your paycheck; but never voluntarily. Right? Well, surprisingly many debtors do just that when they agree to “voluntary wage assignments.” A voluntary wage assignment is an agreement between a creditor and debtor that says the lender can deduct a certain amount of money from the …

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… to take a few months to pay it back.

You can’t write that credit card charge off your taxes completely.  Yes, donations are tax deductible; but not the interest that you pay on your credit card.  If you give $1000 to charity via your credit card, while you can write off the $1000 on your taxes you cannot write off the credit card interest.

The charity is charged fees by the credit card company.  When a charity takes donations via credit …

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The best and simplest way to avoid high interest rates on your credit cards is to pay off your balance every month. But for those of us who are already inundated with debt, doing so may seem next to impossible.  So here are a few tips on how to avoid high interest rates, even if you have a balance:

Pay your credit card on time.  This tip may seem obvious; but many credit card consumers fail to make timely payments and find themselves hit …

Category: Managing Your Finances

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… plan for paying for those Christmas gifts.  Layaway plans offer a great opportunity to pay for your Christmas gifts while keeping your budget and credit card debt under control.

How Layaway Works

Retail stores allow customers to pay for items over time. The customer selects what they want to buy, the retailer places it in storage and the customer makes timely payments until the items are paid for in full. No interest is charged; but there may be nominal one-time fee for using the …

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… you don’t end up in debt despite avoiding credit cards this Christmas.

Keep close track of your spending. While debit cards are a lot better than credit cards in terms of avoiding interest, fees and debt that you need to repay, debit cards have their own set of pitfalls, including pain-free spending.  If you carry cash it can be quite painful to part with it when it comes time to pay for a purchase. As with credit cards and debit cards, just swiping a card makes spending money less …

Category: Managing Your Finances

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