Every day, companies promise consumers who have poor credit histories that, for a fee, they’ll clean up their credit report so they can get a car loan, a home mortgage, insurance or even a job. The truth is, these companies can’t deliver an improved credit report using the tactics they promote.It’s illegal: No one can
remove accurate negative information from your credit report. So after you pay them hundreds or thousands of dollars in up-front fees, you’re left with the same credit report—and a lot less money.
Indeed, attorneys for the Federal Trade Commission, the nation’s consumer protection
agency, say they’ve never seen a legitimate credit repair operation. The fact is, there’s no quick fix for bad credit. The only legitimate credit repair starts with you—and it takes time and a conscious effort to pay your debts.
Recognizing A Credit Repair Scam
If you see a credit repair offer, here’s how to tell if the company behind it is up to no good:
• The company wants you to pay for credit repair services before they provide any services. Under the Credit Repair Organizations Act, credit repair companies cannot require you to pay until they have completed their promised services.
• The company doesn’t tell you your rights and what you can do for yourself for free.
• The company recommends that you do not contact any of the three major national credit reporting companies directly.
• The company tells you they can get rid of most or all the negative credit information in your credit report, even if that information is accurate and current.
• The company suggests that you try to invent a “new” credit identity—and then, a new credit report—by applying for an Employer Identification Number to use instead of your Social Security number.
• The company advises you to dispute all the information in your credit report, regardless of its accuracy or timeliness.
To learn how to improve your credit and find legitimate resources for low- or no-cost help, see Credit Repair: How To Help Yourself at ftc.gov/credit.
To file a complaint or to get free information on consumer issues,
visit ftc.gov or call toll-free, (877)FTC HELP (1-877-382-4357); TTY: (866) 653-4261.
Before You File for Personal Bankruptcy:
Source: FTC.gov
Before You File for Personal Bankruptcy:
Information About Credit Counseling and Debtor Education
Produced in cooperation with the Department of Justice’s U.S. Trustee Program
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 launched a new era: With limited exceptions, people who plan to file for bankruptcy protection must get credit counseling from a government-approved organization within 180 days before they file. They also must complete a debtor education course to have their debts discharged.
The Department of Justice’s U.S. Trustee Program approves organizations to provide the mandatory credit counseling and debtor education. Only the counselors and educators that appear on the U.S. Trustee Program’s lists can advertise that they are, indeed, approved to provide the required counseling and debtor education. By law, the U.S. Trustee Program does not operate in Alabama and North Carolina; in these states, court officials called Bankruptcy Administrators approve pre-bankruptcy credit counseling organizations and pre-discharge debtor education course providers.
Counseling and Education Requirements
As a rule, pre-bankruptcy credit counseling and pre-discharge debtor education may not be provided at the same time. Credit counseling must take place before you file for bankruptcy; debtor education must take place after you file.
In general, you must file a certificate of credit counseling completion when you file for bankruptcy, and evidence of completion of debtor education after you file for bankruptcy – but before your debts are discharged. Only credit counseling organizations and debtor education course providers that have been approved by the U.S. Trustee Program may issue these certificates. To protect against fraud, the certificates are produced through a central automated system and are numbered.
Pre-bankruptcy Counseling
A pre-bankruptcy counseling session with an approved credit counseling organization should include an evaluation of your personal financial situation, a discussion of alternatives to bankruptcy, and a personal budget plan. A typical counseling session should last about 60 to 90 minutes, and can take place in person, on the phone, or online. The counseling organization is required to provide the counseling free of charge for those consumers who cannot afford to pay. If you cannot afford to pay a fee for credit counseling, you should request a fee waiver from the counseling organization before the session begins. Otherwise, you may be charged a fee for the counseling, which will generally be about $50, depending on where you live, the types of services you receive, and other factors. The counseling organization is required to discuss any fees with you before starting the counseling session.
Once you have completed the required counseling, you must get a certificate as proof. Check the U.S. Trustee’s website to be sure that you receive the certificate from a counseling organization that is approved in the judicial district where you are filing bankruptcy. Credit counseling organizations may not charge an extra fee for the certificate.
Post-Filing Debtor Education
A debtor education course by an approved provider should include information on developing a budget, managing money, using credit wisely, and other resources. Like pre-filing counseling, debtor education may be provided in person, on the phone, or online. The debtor education session might last longer than the pre-filing counseling – about two hours – and the typical fee is between $50 and $100. As with pre-filing counseling, if you are unable to pay the session fee, you should seek a fee waiver from the debtor education provider. Check the list of approved debtor education providers at www.usdoj.gov/ust/eo/bapcpa/ccde/de_approved.htm or at the bankruptcy clerk’s office in your district.
Once you have completed the required debtor education course, you should receive a certificate as proof. This certificate is separate from the certificate you received after completing your pre-filing credit counseling. Check the U.S. Trustee’s website to be sure that you receive the certificate from a debtor education provider that is approved in the judicial district where you filed bankruptcy. Unless they have disclosed a charge to you before the counseling session begins, debtor education providers may not charge an extra fee for the certificate.
Important Questions to Ask When Choosing a Credit Counselor
It’s wise to do some research when choosing a credit counseling organization. If you are in search of credit counseling to fulfill the bankruptcy law requirements, make sure you receive services only from approved providers for your judicial district. Check the list at www.usdoj.gov/ust/eo/bapcpa/ccde/cc_approved.htm or at the bankruptcy clerk’s office for the district where you will file. Once you have the list of approved organizations in your judicial district, call several to gather information before you make your choice. Some key questions to ask are:
For More Information and Assistance
The U.S. Trustee Program promotes integrity and efficiency in the nation’s bankruptcy system by enforcing bankruptcy laws, providing oversight of private trustees, and maintaining operational excellence. The Program has 21 regions and 95 field offices, and oversees the administration of bankruptcy in all states except Alabama and North Carolina. For more information, visit www.usdoj.gov/ust.
If you have concerns about approved credit counseling agencies or debtor education course providers, such as the failure to provide adequate service, please contact the U.S. Trustee Program by email at USTCCDEComplaintHelp@usdoj.gov, or in writing at Executive Office for U.S. Trustees, Credit Counseling and Debtor Education Unit, 20 Massachusetts Avenue, N.W., Suite 8000, Washington, D.C., 20530. Provide as much detail as you can, including the name of the credit counseling organization or debtor education course provider, the date of contact, and whom you spoke with.
The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint or to get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters consumer complaints into the Consumer Sentinel Network, a secure online database and investigative tool used by hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.
Before You File for Personal Bankruptcy:
Information About Credit Counseling and Debtor Education
Produced in cooperation with the Department of Justice’s U.S. Trustee Program
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 launched a new era: With limited exceptions, people who plan to file for bankruptcy protection must get credit counseling from a government-approved organization within 180 days before they file. They also must complete a debtor education course to have their debts discharged.
The Department of Justice’s U.S. Trustee Program approves organizations to provide the mandatory credit counseling and debtor education. Only the counselors and educators that appear on the U.S. Trustee Program’s lists can advertise that they are, indeed, approved to provide the required counseling and debtor education. By law, the U.S. Trustee Program does not operate in Alabama and North Carolina; in these states, court officials called Bankruptcy Administrators approve pre-bankruptcy credit counseling organizations and pre-discharge debtor education course providers.
Counseling and Education Requirements
As a rule, pre-bankruptcy credit counseling and pre-discharge debtor education may not be provided at the same time. Credit counseling must take place before you file for bankruptcy; debtor education must take place after you file.
In general, you must file a certificate of credit counseling completion when you file for bankruptcy, and evidence of completion of debtor education after you file for bankruptcy – but before your debts are discharged. Only credit counseling organizations and debtor education course providers that have been approved by the U.S. Trustee Program may issue these certificates. To protect against fraud, the certificates are produced through a central automated system and are numbered.
Pre-bankruptcy Counseling
A pre-bankruptcy counseling session with an approved credit counseling organization should include an evaluation of your personal financial situation, a discussion of alternatives to bankruptcy, and a personal budget plan. A typical counseling session should last about 60 to 90 minutes, and can take place in person, on the phone, or online. The counseling organization is required to provide the counseling free of charge for those consumers who cannot afford to pay. If you cannot afford to pay a fee for credit counseling, you should request a fee waiver from the counseling organization before the session begins. Otherwise, you may be charged a fee for the counseling, which will generally be about $50, depending on where you live, the types of services you receive, and other factors. The counseling organization is required to discuss any fees with you before starting the counseling session.
Once you have completed the required counseling, you must get a certificate as proof. Check the U.S. Trustee’s website to be sure that you receive the certificate from a counseling organization that is approved in the judicial district where you are filing bankruptcy. Credit counseling organizations may not charge an extra fee for the certificate.
Post-Filing Debtor Education
A debtor education course by an approved provider should include information on developing a budget, managing money, using credit wisely, and other resources. Like pre-filing counseling, debtor education may be provided in person, on the phone, or online. The debtor education session might last longer than the pre-filing counseling – about two hours – and the typical fee is between $50 and $100. As with pre-filing counseling, if you are unable to pay the session fee, you should seek a fee waiver from the debtor education provider. Check the list of approved debtor education providers at www.usdoj.gov/ust/eo/bapcpa/ccde/de_approved.htm or at the bankruptcy clerk’s office in your district.
Once you have completed the required debtor education course, you should receive a certificate as proof. This certificate is separate from the certificate you received after completing your pre-filing credit counseling. Check the U.S. Trustee’s website to be sure that you receive the certificate from a debtor education provider that is approved in the judicial district where you filed bankruptcy. Unless they have disclosed a charge to you before the counseling session begins, debtor education providers may not charge an extra fee for the certificate.
Important Questions to Ask When Choosing a Credit Counselor
It’s wise to do some research when choosing a credit counseling organization. If you are in search of credit counseling to fulfill the bankruptcy law requirements, make sure you receive services only from approved providers for your judicial district. Check the list at www.usdoj.gov/ust/eo/bapcpa/ccde/cc_approved.htm or at the bankruptcy clerk’s office for the district where you will file. Once you have the list of approved organizations in your judicial district, call several to gather information before you make your choice. Some key questions to ask are:
- What services do you offer?
- Will you help me develop a plan for avoiding problems in the future?
- What are your fees?
- What if I can’t afford to pay your fees?
- What qualifications do your counselors have? Are they accredited or certified by an outside organization? What training do they receive?
- What do you do to keep information about me (including my address, phone number, and financial information) confidential and secure?
- How are your employees paid? Are they paid more if I sign up for certain services, if I pay a fee, or if I make a contribution to your organization?
For More Information and Assistance
The U.S. Trustee Program promotes integrity and efficiency in the nation’s bankruptcy system by enforcing bankruptcy laws, providing oversight of private trustees, and maintaining operational excellence. The Program has 21 regions and 95 field offices, and oversees the administration of bankruptcy in all states except Alabama and North Carolina. For more information, visit www.usdoj.gov/ust.
If you have concerns about approved credit counseling agencies or debtor education course providers, such as the failure to provide adequate service, please contact the U.S. Trustee Program by email at USTCCDEComplaintHelp@usdoj.gov, or in writing at Executive Office for U.S. Trustees, Credit Counseling and Debtor Education Unit, 20 Massachusetts Avenue, N.W., Suite 8000, Washington, D.C., 20530. Provide as much detail as you can, including the name of the credit counseling organization or debtor education course provider, the date of contact, and whom you spoke with.
The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint or to get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters consumer complaints into the Consumer Sentinel Network, a secure online database and investigative tool used by hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.
Debt Collection - A Guide for Consumers
Debt Collection FAQs: A Guide for Consumers
If you’re behind in paying your bills, or a creditor’s records mistakenly make it appear that you are, a debt collector may be contacting you.
The Federal Trade Commission (FTC), the nation’s consumer protection agency, enforces the Fair Debt Collection Practices Act (FDCPA), which prohibits debt collectors from using abusive, unfair, or deceptive practices to collect from you.
Under the FDCPA, a debt collector is someone who regularly collects debts owed to others. This includes collection agencies, lawyers who collect debts on a regular basis, and companies that buy delinquent debts and then try to collect them.
Here are some questions and answers about your rights under the Act.
What types of debts are covered?
The Act covers personal, family, and household debts, including money you owe on a personal credit card account, an auto loan, a medical bill, and your mortgage. The FDCPA doesn’t cover debts you incurred to run a business.
Can a debt collector contact me any time or any place?
No. A debt collector may not contact you at inconvenient times or places, such as before 8 in the morning or after 9 at night, unless you agree to it. And collectors may not contact you at work if they’re told (orally or in writing) that you’re not allowed to get calls there.
How can I stop a debt collector from contacting me?
If a collector contacts you about a debt, you may want to talk to them at least once to see if you can resolve the matter – even if you don’t think you owe the debt, can’t repay it immediately, or think that the collector is contacting you by mistake. If you decide after contacting the debt collector that you don’t want the collector to contact you again, tell the collector – in writing – to stop contacting you. Here’s how to do that:
Make a copy of your letter. Send the original by certified mail, and pay for a “return receipt” so you’ll be able to document what the collector received. Once the collector receives your letter, they may not contact you again, with two exceptions: a collector can contact you to tell you there will be no further contact or to let you know that they or the creditor intend to take a specific action, like filing a lawsuit. Sending such a letter to a debt collector you owe money to does not get rid of the debt, but it should stop the contact. The creditor or the debt collector still can sue you to collect the debt.
Can a debt collector contact anyone else about my debt?
If an attorney is representing you about the debt, the debt collector must contact the attorney, rather than you. If you don’t have an attorney, a collector may contact other people – but only to find out your address, your home phone number, and where you work. Collectors usually are prohibited from contacting third parties more than once. Other than to obtain this location information about you, a debt collector generally is not permitted to discuss your debt with anyone other than you, your spouse, or your attorney.
What does the debt collector have to tell me about the debt?
Every collector must send you a written “validation notice” telling you how much money you owe within five days after they first contact you. This notice also must include the name of the creditor to whom you owe the money, and how to proceed if you don’t think you owe the money.
Can a debt collector keep contacting me if I don’t think I owe any money?
If you send the debt collector a letter stating that you don’t owe any or all of the money, or asking for verification of the debt, that collector must stop contacting you. You have to send that letter within 30 days after you receive the validation notice. But a collector can begin contacting you again if it sends you written verification of the debt, like a copy of a bill for the amount you owe.
What practices are off limits for debt collectors?
Harassment. Debt collectors may not harass, oppress, or abuse you or any third parties they contact. For example, they may not:
False statements. Debt collectors may not lie when they are trying to collect a debt. For example, they may not:
Debt collectors also are prohibited from saying that:
Debt collectors may not:
Unfair practices. Debt collectors may not engage in unfair practices when they try to collect a debt. For example, they may not:
Can I control which debts my payments apply to?
Yes. If a debt collector is trying to collect more than one debt from you, the collector must apply any payment you make to the debt you select. Equally important, a debt collector may not apply a payment to a debt you don’t think you owe.
Can a debt collector garnish my bank account or my wages?
If you don’t pay a debt, a creditor or its debt collector generally can sue you to collect. If they win, the court will enter a judgment against you. The judgment states the amount of money you owe, and allows the creditor or collector to get a garnishment order against you, directing a third party, like your bank, to turn over funds from your account to pay the debt.
Wage garnishment happens when your employer withholds part of your compensation to pay your debts. Your wages usually can be garnished only as the result of a court order. Don’t ignore a lawsuit summons. If you do, you lose the opportunity to fight a wage garnishment.
Can federal benefits be garnished?
Many federal benefits are exempt from garnishment, including:
But federal benefits may be garnished under certain circumstances, including to pay delinquent taxes, alimony, child support, or student loans.
Do I have any recourse if I think a debt collector has violated the law?
You have the right to sue a collector in a state or federal court within one year from the date the law was violated. If you win, the judge can require the collector to pay you for any damages you can prove you suffered because of the illegal collection practices, like lost wages and medical bills. The judge can require the debt collector to pay you up to $1,000, even if you can’t prove that you suffered actual damages. You also can be reimbursed for your attorney’s fees and court costs. A group of people also may sue a debt collector as part of a class action lawsuit and recover money for damages up to $500,000, or one percent of the collector’s net worth, whichever amount is lower. Even if a debt collector violates the FDCPA in trying to collect a debt, the debt does not go away if you owe it.
What should I do if a debt collector sues me?
If a debt collector files a lawsuit against you to collect a debt, respond to the lawsuit, either personally or through your lawyer, by the date specified in the court papers to preserve your rights.
Where do I report a debt collector for an alleged violation?
Report any problems you have with a debt collector to your state Attorney General’s office (www.naag.org) and the Federal Trade Commission (www.ftc.gov). Many states have their own debt collection laws that are different from the federal Fair Debt Collection Practices Act. Your Attorney General’s office can help you determine your rights under your state’s law.
If you’re behind in paying your bills, or a creditor’s records mistakenly make it appear that you are, a debt collector may be contacting you.
The Federal Trade Commission (FTC), the nation’s consumer protection agency, enforces the Fair Debt Collection Practices Act (FDCPA), which prohibits debt collectors from using abusive, unfair, or deceptive practices to collect from you.
Under the FDCPA, a debt collector is someone who regularly collects debts owed to others. This includes collection agencies, lawyers who collect debts on a regular basis, and companies that buy delinquent debts and then try to collect them.
Here are some questions and answers about your rights under the Act.
What types of debts are covered?
The Act covers personal, family, and household debts, including money you owe on a personal credit card account, an auto loan, a medical bill, and your mortgage. The FDCPA doesn’t cover debts you incurred to run a business.
Can a debt collector contact me any time or any place?
No. A debt collector may not contact you at inconvenient times or places, such as before 8 in the morning or after 9 at night, unless you agree to it. And collectors may not contact you at work if they’re told (orally or in writing) that you’re not allowed to get calls there.
How can I stop a debt collector from contacting me?
If a collector contacts you about a debt, you may want to talk to them at least once to see if you can resolve the matter – even if you don’t think you owe the debt, can’t repay it immediately, or think that the collector is contacting you by mistake. If you decide after contacting the debt collector that you don’t want the collector to contact you again, tell the collector – in writing – to stop contacting you. Here’s how to do that:
Make a copy of your letter. Send the original by certified mail, and pay for a “return receipt” so you’ll be able to document what the collector received. Once the collector receives your letter, they may not contact you again, with two exceptions: a collector can contact you to tell you there will be no further contact or to let you know that they or the creditor intend to take a specific action, like filing a lawsuit. Sending such a letter to a debt collector you owe money to does not get rid of the debt, but it should stop the contact. The creditor or the debt collector still can sue you to collect the debt.
Can a debt collector contact anyone else about my debt?
If an attorney is representing you about the debt, the debt collector must contact the attorney, rather than you. If you don’t have an attorney, a collector may contact other people – but only to find out your address, your home phone number, and where you work. Collectors usually are prohibited from contacting third parties more than once. Other than to obtain this location information about you, a debt collector generally is not permitted to discuss your debt with anyone other than you, your spouse, or your attorney.
What does the debt collector have to tell me about the debt?
Every collector must send you a written “validation notice” telling you how much money you owe within five days after they first contact you. This notice also must include the name of the creditor to whom you owe the money, and how to proceed if you don’t think you owe the money.
Can a debt collector keep contacting me if I don’t think I owe any money?
If you send the debt collector a letter stating that you don’t owe any or all of the money, or asking for verification of the debt, that collector must stop contacting you. You have to send that letter within 30 days after you receive the validation notice. But a collector can begin contacting you again if it sends you written verification of the debt, like a copy of a bill for the amount you owe.
What practices are off limits for debt collectors?
Harassment. Debt collectors may not harass, oppress, or abuse you or any third parties they contact. For example, they may not:
- use threats of violence or harm;
- publish a list of names of people who refuse to pay their debts (but they can give this information to the credit reporting companies);
- use obscene or profane language; or
- repeatedly use the phone to annoy someone.
False statements. Debt collectors may not lie when they are trying to collect a debt. For example, they may not:
- falsely claim that they are attorneys or government representatives;
- falsely claim that you have committed a crime;
- falsely represent that they operate or work for a credit reporting company;
- misrepresent the amount you owe;
- indicate that papers they send you are legal forms if they aren’t; or
- indicate that papers they send to you aren’t legal forms if they are.
Debt collectors also are prohibited from saying that:
- you will be arrested if you don’t pay your debt;
- they’ll seize, garnish, attach, or sell your property or wages unless they are permitted by law to take the action and intend to do so; or
- legal action will be taken against you, if doing so would be illegal or if they
- don’t intend to take the action.
Debt collectors may not:
- give false credit information about you to anyone, including a credit reporting company;
- send you anything that looks like an official document from a court or government agency if it isn’t; or
- use a false company name.
Unfair practices. Debt collectors may not engage in unfair practices when they try to collect a debt. For example, they may not:
- try to collect any interest, fee, or other charge on top of the amount you owe unless the contract that created your debt – or your state law – allows the charge;
- deposit a post-dated check early;
- take or threaten to take your property unless it can be done legally; or
- contact you by postcard.
Can I control which debts my payments apply to?
Yes. If a debt collector is trying to collect more than one debt from you, the collector must apply any payment you make to the debt you select. Equally important, a debt collector may not apply a payment to a debt you don’t think you owe.
Can a debt collector garnish my bank account or my wages?
If you don’t pay a debt, a creditor or its debt collector generally can sue you to collect. If they win, the court will enter a judgment against you. The judgment states the amount of money you owe, and allows the creditor or collector to get a garnishment order against you, directing a third party, like your bank, to turn over funds from your account to pay the debt.
Wage garnishment happens when your employer withholds part of your compensation to pay your debts. Your wages usually can be garnished only as the result of a court order. Don’t ignore a lawsuit summons. If you do, you lose the opportunity to fight a wage garnishment.
Can federal benefits be garnished?
Many federal benefits are exempt from garnishment, including:
- Social Security Benefits
- Supplemental Security Income (SSI) Benefits
- Veterans’ Benefits
- Civil Service and Federal Retirement and Disability Benefits
- Service Members’ Pay
- Military Annuities and Survivors’ Benefits
- Student Assistance
- Railroad Retirement Benefits
- Merchant Seamen Wages
- Longshoremen’s and Harbor Workers’ Death and Disability Benefits
- Foreign Service Retirement and Disability Benefits
- Compensation for Injury, Death, or Detention of Employees of U.S. Contractors Outside the U.S.
- Federal Emergency Management Agency Federal Disaster Assistance
But federal benefits may be garnished under certain circumstances, including to pay delinquent taxes, alimony, child support, or student loans.
Do I have any recourse if I think a debt collector has violated the law?
You have the right to sue a collector in a state or federal court within one year from the date the law was violated. If you win, the judge can require the collector to pay you for any damages you can prove you suffered because of the illegal collection practices, like lost wages and medical bills. The judge can require the debt collector to pay you up to $1,000, even if you can’t prove that you suffered actual damages. You also can be reimbursed for your attorney’s fees and court costs. A group of people also may sue a debt collector as part of a class action lawsuit and recover money for damages up to $500,000, or one percent of the collector’s net worth, whichever amount is lower. Even if a debt collector violates the FDCPA in trying to collect a debt, the debt does not go away if you owe it.
What should I do if a debt collector sues me?
If a debt collector files a lawsuit against you to collect a debt, respond to the lawsuit, either personally or through your lawyer, by the date specified in the court papers to preserve your rights.
Where do I report a debt collector for an alleged violation?
Report any problems you have with a debt collector to your state Attorney General’s office (www.naag.org) and the Federal Trade Commission (www.ftc.gov). Many states have their own debt collection laws that are different from the federal Fair Debt Collection Practices Act. Your Attorney General’s office can help you determine your rights under your state’s law.
Personal Bankruptcy Issues
When searching through the Internet, you will often see advertisements for personal bankruptcy aid, but how do you know the best choice to make for your situation? This article will give you valuable tips on making the best choice for yourself.
Personal Bankruptcy is a legal action that empowers you to extend some or all of your personal debts.
The most recent bankruptcy policy was established in 1978, and was recently amended in the spring of 2005. The end of the bill is to supply relief and structure to those of us who have gotten ourselves so far into debt that we can't feasibly make our payments.
Personal bankruptcy is calculated to be a last-ditch financial solution. It puts a legal barrier between you and your creditors. The United States Constitution assures its residents the right to debt relief through bankruptcy, providing a new beginning and (with careful budgeting and sensible spending, a second opportunity at financial success.
Personal bankruptcy is an choice that empowers a person to discharge their debts and typically runs at least nine months. To obtain a discharge at the end of nine months, several requirements must be completed.
Personal bankruptcy typically is seen as the debt management choice of last resort because the consequences are long-lasting and far reaching.
Personal bankruptcy typically does not eliminate child support, alimony, fines, taxes, and student loan obligations. Also, unless you have an admissible plan to catch up on your debt under Chapter 13, bankruptcy typically cannot allow you to retain your property when your creditor has an unpaid mortgage or lien against it.
There are many useful books available on the subject to help you decide whether filing for bankruptcy is the right option for you and (if it is) which kind of bankruptcy corresponds to your personal situation. Written by knowledgeable authorities on bankruptcy law, these simple guides will walk you through the bankruptcy action and demonstrate how to reinstate your credit afterwards.
Credit assistance programs may also be able to help you. You've likely seen ads on television or in your yellow pages for debt or credit counseling.
For more information, visit our personal bankruptcy website and feel free to browse our articles section.
Personal Bankruptcy is a legal action that empowers you to extend some or all of your personal debts.
The most recent bankruptcy policy was established in 1978, and was recently amended in the spring of 2005. The end of the bill is to supply relief and structure to those of us who have gotten ourselves so far into debt that we can't feasibly make our payments.
Personal bankruptcy is calculated to be a last-ditch financial solution. It puts a legal barrier between you and your creditors. The United States Constitution assures its residents the right to debt relief through bankruptcy, providing a new beginning and (with careful budgeting and sensible spending, a second opportunity at financial success.
Personal bankruptcy is an choice that empowers a person to discharge their debts and typically runs at least nine months. To obtain a discharge at the end of nine months, several requirements must be completed.
Personal bankruptcy typically is seen as the debt management choice of last resort because the consequences are long-lasting and far reaching.
Personal bankruptcy typically does not eliminate child support, alimony, fines, taxes, and student loan obligations. Also, unless you have an admissible plan to catch up on your debt under Chapter 13, bankruptcy typically cannot allow you to retain your property when your creditor has an unpaid mortgage or lien against it.
There are many useful books available on the subject to help you decide whether filing for bankruptcy is the right option for you and (if it is) which kind of bankruptcy corresponds to your personal situation. Written by knowledgeable authorities on bankruptcy law, these simple guides will walk you through the bankruptcy action and demonstrate how to reinstate your credit afterwards.
Credit assistance programs may also be able to help you. You've likely seen ads on television or in your yellow pages for debt or credit counseling.
For more information, visit our personal bankruptcy website and feel free to browse our articles section.
Debt Settlement and Bankruptcy - when divorcing
As things change in ones life, there may come a time when bankruptcy is the only way for debt settlement to happen. Most people fall in love and marry thinking that they will grow old together. When the marriage doesn't work, there are expenses that need to be paid in order for the divorce to work. That can mean only two things. First, both adults have a lot of money and they just pay everything off before divorcing, or the more likely scenario of declaring bankruptcy to settle the joint estate.
All debts must be settled; it is easier to work together to finish this, but then again, that's the reason two people aren't getting along with each other, communication. Another scenario would be that one spouse dies and the other is left to try to carry on. In both scenarios, the final answer is that debt settlement must be achieved. Debt settlement may mean having ones attorney re-negotiate prices and payments for those items that one doesn't want to part with. Lenders in most cases will work with the customer's attorney.
Debt settlement means having a new plan of how to pay things off or what will be defaulted on. These items include cars, the house, appliances, mostly every credit purchase that is not yet paid off.
Debt Settlement and the Future
When its time to accomplish debt settlement, it's not the time to think about things. This should occur weeks or months before the actual deciding time is at hand. Don't make decisions based off emotions one is feeling. Talk to an attorney and make decisions when one is stable and can think clearly without hashing things over again. Decisions need to be made correctly because after everything is done, there is no one to blame.
Make sure one can make the payments agreed on and don't do things just to get back at another. It may hurt the other person, but it will also hurt the one who is deciding on debt settlement. This is the beginning of the rest of ones life; the future is what one makes it. Think about debt settlement and the future. Make plans and stick with them. This will help one ease into a new life filled with promise and adventure. It will be as one makes it to be. The decision to succeed is in the hands of the customer.
All debts must be settled; it is easier to work together to finish this, but then again, that's the reason two people aren't getting along with each other, communication. Another scenario would be that one spouse dies and the other is left to try to carry on. In both scenarios, the final answer is that debt settlement must be achieved. Debt settlement may mean having ones attorney re-negotiate prices and payments for those items that one doesn't want to part with. Lenders in most cases will work with the customer's attorney.
Debt settlement means having a new plan of how to pay things off or what will be defaulted on. These items include cars, the house, appliances, mostly every credit purchase that is not yet paid off.
Debt Settlement and the Future
When its time to accomplish debt settlement, it's not the time to think about things. This should occur weeks or months before the actual deciding time is at hand. Don't make decisions based off emotions one is feeling. Talk to an attorney and make decisions when one is stable and can think clearly without hashing things over again. Decisions need to be made correctly because after everything is done, there is no one to blame.
Make sure one can make the payments agreed on and don't do things just to get back at another. It may hurt the other person, but it will also hurt the one who is deciding on debt settlement. This is the beginning of the rest of ones life; the future is what one makes it. Think about debt settlement and the future. Make plans and stick with them. This will help one ease into a new life filled with promise and adventure. It will be as one makes it to be. The decision to succeed is in the hands of the customer.
When To Use A Credit Counseling Service
If you are consistently paying your bills late, credit counseling services may be able to help you negotiate lower interests and payment plans with your creditors. A credit counselor determines your eligibility for a debt consolidation program or debt management plan. The main advantage is that you only need to make one payment per month to a credit counseling service, which then sends the payment to your creditors. You save by paying lower interest rates and avoiding late payments charges. It is also easier to manage a single debt as all your debt repayments are consolidated into a single monthly payment.
Credit counseling services' fees are usually paid by creditors to whom debt payments are distributed. This raises doubts on the objectivity of credit counseling services. Many believed that they are used by creditors to collect debts.
There are so many credit counseling services, so it is imperative to research them carefully before signing up for one. There are message boards and websites where you can ask people for their opinions and feedback on credit counseling services. A money based message board can be a good place to learn about people's experiences. You can check with a credit counseling service's local Better Business Bureau to see if there had been any complaint against it and with its local courthouse to see if it had been sued. Reviews of various credit counseling services and their debt consolidation programs can be found by searching on the internet. Beware of bogus credit counseling services that ask for high upfront fees and promise that you can pay off your debts for less than what you actually owe. Avoid credit counseling services with no accreditation.
Credit counseling is definitely not for you if you are able to pay your bills on time. Don't be fooled by credit counseling services that offer to negotiate lower interest rates for you. They may only end up hurting your credit score.
When do you need a credit counseling service? You may consider seeking the help of a credit counselor if you are constantly paying your bills late, chased by your creditors, unable to make minimum payments on your credit cards or fail to negotiate repayment plans with your creditors.
If you are heavily in debt, credit counseling services may not be able to help you negotiate payment plans. In this case, you may need to get a bank loan and consolidate existing debts by yourself. Your last option is to file for bankruptcy.
Credit counseling services' fees are usually paid by creditors to whom debt payments are distributed. This raises doubts on the objectivity of credit counseling services. Many believed that they are used by creditors to collect debts.
There are so many credit counseling services, so it is imperative to research them carefully before signing up for one. There are message boards and websites where you can ask people for their opinions and feedback on credit counseling services. A money based message board can be a good place to learn about people's experiences. You can check with a credit counseling service's local Better Business Bureau to see if there had been any complaint against it and with its local courthouse to see if it had been sued. Reviews of various credit counseling services and their debt consolidation programs can be found by searching on the internet. Beware of bogus credit counseling services that ask for high upfront fees and promise that you can pay off your debts for less than what you actually owe. Avoid credit counseling services with no accreditation.
Credit counseling is definitely not for you if you are able to pay your bills on time. Don't be fooled by credit counseling services that offer to negotiate lower interest rates for you. They may only end up hurting your credit score.
When do you need a credit counseling service? You may consider seeking the help of a credit counselor if you are constantly paying your bills late, chased by your creditors, unable to make minimum payments on your credit cards or fail to negotiate repayment plans with your creditors.
If you are heavily in debt, credit counseling services may not be able to help you negotiate payment plans. In this case, you may need to get a bank loan and consolidate existing debts by yourself. Your last option is to file for bankruptcy.
Improve Your Credit Rating (United States)
As surprising as this may sound, the vast majority of consumers don't know what their credit score is. That fact is almost as bad as not knowing what your blood pressure is, because by the same token, by the time you discover that it is not where it should be, it is frequently too late to avoid the detrimental or adverse effects of a poor credit score, or high blood pressure.
Sometimes, credit scores go by the name of FICO scores. Approximately ten percent of your FICO score pertains to a detailed analysis of the number and types of accounts you have. This is commonly known as a FICO score, which is a credit score developed by Fair Isaac & Co (FICO).
If your credit score, which is calculated to be a single number, typically between 350 and 800, is lower than you would like it to be, there are steps you can take to improve your credit score. Another step that may help you improve your credit score is to consolidate all of your high interest credit card debt into one low interest loan. Now that you know all of the things that are used to calculate your score, here is what can you do to improve it.
One of the major factors that goes into determining your credit score is the number of credit cards you have, your outstanding balance on them compared with your credit limit, and of course your on-time payment history with each of those creditors. Now there is no hard and fast rule as to what potential lenders want to see, because to a certain extent, they all have individual or unique requirements. Some like to see low balances compared to high credit limits even on a lot of credit cards, while others would prefer to see fewer credit card accounts with higher balances. Interestingly enough, most creditors will rate these two scenarios differently, even if the sum total amount of debt on those credit cards is exactly the same.
Improving your credit score is a multi-step process but there are many things you can do, and since getting your score adjusted takes time, it is something you should start today. One of the things you should do is close accounts you don't use anymore. Some people think that it is a positive thing to have an open account with a zero balance that has been paid in time and in full. But in reality, most lenders will deduct points for that, since if the account is open, you have the opportunity and choice to use it and potentially charge it up to the hilt. If you don't want to close the account, contact the creditor and ask them to lower your credit limit. Keep in mind that lenders look at your financial picture today, as well as what you have the potential to do if you went off the deep end.
Understanding every detail of information on the credit report is an important step to improving or repairing your credit score. Credit repair is the process of fixing the errors, mistakes and inaccuracies that appear on our credit report from the credit bureau. And be aware that the MAJORITY of consumers have credit reports with errors on them, which do NOT get fixed unless the consumer takes the initiative to alert the credit bureau of the error.
You are encouraged to keep a close watch on your credit score and take steps to improve it as quickly as possible. At the point where you get turned down for that new car loan or mortgage is too late to start working on this. It is a process, it takes time, and should be a major component of your weekly routine.
Sometimes, credit scores go by the name of FICO scores. Approximately ten percent of your FICO score pertains to a detailed analysis of the number and types of accounts you have. This is commonly known as a FICO score, which is a credit score developed by Fair Isaac & Co (FICO).
If your credit score, which is calculated to be a single number, typically between 350 and 800, is lower than you would like it to be, there are steps you can take to improve your credit score. Another step that may help you improve your credit score is to consolidate all of your high interest credit card debt into one low interest loan. Now that you know all of the things that are used to calculate your score, here is what can you do to improve it.
One of the major factors that goes into determining your credit score is the number of credit cards you have, your outstanding balance on them compared with your credit limit, and of course your on-time payment history with each of those creditors. Now there is no hard and fast rule as to what potential lenders want to see, because to a certain extent, they all have individual or unique requirements. Some like to see low balances compared to high credit limits even on a lot of credit cards, while others would prefer to see fewer credit card accounts with higher balances. Interestingly enough, most creditors will rate these two scenarios differently, even if the sum total amount of debt on those credit cards is exactly the same.
Improving your credit score is a multi-step process but there are many things you can do, and since getting your score adjusted takes time, it is something you should start today. One of the things you should do is close accounts you don't use anymore. Some people think that it is a positive thing to have an open account with a zero balance that has been paid in time and in full. But in reality, most lenders will deduct points for that, since if the account is open, you have the opportunity and choice to use it and potentially charge it up to the hilt. If you don't want to close the account, contact the creditor and ask them to lower your credit limit. Keep in mind that lenders look at your financial picture today, as well as what you have the potential to do if you went off the deep end.
Understanding every detail of information on the credit report is an important step to improving or repairing your credit score. Credit repair is the process of fixing the errors, mistakes and inaccuracies that appear on our credit report from the credit bureau. And be aware that the MAJORITY of consumers have credit reports with errors on them, which do NOT get fixed unless the consumer takes the initiative to alert the credit bureau of the error.
You are encouraged to keep a close watch on your credit score and take steps to improve it as quickly as possible. At the point where you get turned down for that new car loan or mortgage is too late to start working on this. It is a process, it takes time, and should be a major component of your weekly routine.
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