DeadBeats Are Us

The article titles listed below (click title to read) are provided courtesy of  DebtSmart

So Far in Debt; Can’t Seem to Breathe

One Day Late, yeah right!

Collection Company after 23-Year-Old-Debt

Helping Daughter with Debt 

What Happened to the Other Dollar?

Credit Card Balance Transfers

Debt Snowball (Myth or Magic): Paying Back Lower-Balance Cards First

Consolidating Credit Cards to One Account 

Weekly or monthly payments?

Buying a House after Bankruptcy

What is better? Fewer Cards with High Balances, or Many Cards with Smaller Balances?

By: Marjorie Salada

Debt Freedom it is something that everybody wants to achieve, but the question is, how you get there. Reaching debt freedom involves changing the way we think about our money and the way we manage our money. I am not saying you need to give up all the things that you like, but you may want to take a good hard look at what is really important in your life.

Is having things now more important than having a future. Fulfilling your dreams in the future will take some planning in the present. How you handle your money in the present will determine how much of it you will retain for your future. There are some very basic and simple changes you can make in your daily life that will help you prepare for a financially sound future. Here are some simple changes you can make that will you achieve debt freedom:

1. Stop financing your lifestyle with credit cards. If it is not an emergency (the latest shoe style is not an emergency) or it can not be paid off in full monthly, it should not be charged. Credit cards are robbing Americans of a sound financial future.

2. Keep a log of your spending. Once you know where your money is going, it will be easier to see where you can cut back. Put the extra money towards paying down your credit cards.

3. Pack your lunch 3 days (or more) a week. Eating out can be expensive and brown bagging it will save you money.

4. Instead of going out to the movies, rent a movie and enjoy a family movie night at home.

5. Have a pizza party and make your pizza at home instead of ordering out.

6. Buy in bulk and freeze dinners. This will not only save you money it will save you time.

7. Give handmade gifts and cards.

8. Shop at consignment shops, thrift stores, discount stores and yard sales.

9. Consider discontinuing or downgrading your cell phones and cable TV plans.

10. Pay more than the minimum payment on your credit cards. If you pay only the minimum on a credit card with a $3000 balance, it will cost you $2780 in interest and will take you 8 years to pay the balance off. If you pay an extra $50 a month towards your balance, you will save $1800 in interest and have your debt paid off in three years.

Bottom line is before you can live debt free you have to become debt free. Following some of these tips will help you achieve debt freedom. With a little bit of effort, you will be able find many ways of saving money. Start by looking at things you spend money on and find ways to reduce or eliminate these expenses. Every little bit helps.

By:  Marjorie Salada 

Have you started receiving credit card debt settlement notices in the mail? Have you been receiving collection calls? If this is the case, you have probably been in debt and been dealing with financial difficulties for quite some time.

Creditors are sometimes willing to settle the account for a lesser amount if the credit card account is seriously delinquent or has been written off. This creditor will usually accept the settled amount in one payment and the payment has to be made within a short period of time.

Now you may wonder why a creditor would settle for less than what is owed. Your credit card issuer is trying to reduce their losses and they have concerns about you paying this debt. Your credit issuer feels that recovering some of their money is better than not getting any of it back. Keep in mind that accepting a settlement may affect your borrowing ability in the future with this creditor, but it is a better option than bankruptcy or doing nothing at all.

A creditor will not usually settle on an account that is current. Normally, the account has to be at least 90 days delinquent before they will talk settlement and many credit card companies will wait longer than that. Here are a few things you should be aware of before agreeing to a settlement.

1. Your settlement payment may not completely satisfy the debt. There is a possibility that the uncollected portion of the debt could be turned over to another collection agency for further collection activity, but this is not the norm.

2. The IRS considers the amount of the debt that has not been satisfied as income. Any amount that exceeds $600 will be report on a 1099, to the IRS, by your creditors. You will be required to pay taxes on this amount.

3. Know what’s on your credit report. If the debt is not on their at all, it is not recommended that you do anything with this debt. If it is showing as being “charged off,” this is negative note on your credit report. If you settle, it will be noted as “settled for a lesser amount” which as also somewhat negative, but not as bad as doing nothing about it at all.

The best thing to do is to try to deal with the original creditor. Communicate with them in writing. If they will not deal with you, contact the collection agency in writing. If at all possible, try to negotiate a repayment plan on the balance. If you decide to settle the debt, get the terms of the settlement in writing to avoid problems on down the road. Once you have paid the debt, ask for a release of debt as proof that the company has agreed that the debt has been satisfied.

The best thing that you can do for yourself is to examine the curcumstances that caused your debt to get to this point and to put a plan in place that will prevent you from ending up there again.

About The Author
Marjorie Salada is the owner of http://www.debtmanagement1.com, a website that contains information on getting and staying out of debt. If you are looking for information on debt consolidation, debt settlement, debt counseling or how to manage credit card debt this site is an excellent resource. 

By: Jennie Crawford

Is living debt free possible? So many people in todays society struggle with overwhelming amounts of debt. Our society has become one obsessed with more. More everything. Debt free living is certainly a goal for most, but is it possible?

To discuss debt free living, for the purposes of this article, I am not going to consider mortgages. Although it is a dream of mine personally to pay off my house and enjoy living without a mortgage, at this point in my life, its not going to happen. At least not for at least 10-15 more years. So the debt free living that I am going to be discussing in this article is becoming credit card debt free.

It sounds simple. If you can’t pay for it, don’t buy it. Thats how our parents lived as did their parents. And the advice to pay more then the minimum payments is great advice. But for some, making even the minimum payments is a struggle. How to pay more? I remember a friend of mine in college who got in over her head with credit card debt. She would use the availability of cash advances on her credit cards to make the payment. Or use one card to make the payment on the others. It is truly irresponsible to give students in college who are adjusting to life without the supervision of their parents, credit cards. Those who have little to know experience with credit coupled with full time schooling and perhaps part-time jobs have no business with credit cards. Speaking from experience, it is very easy to get in over your head very quickly. And difficult to get out. Debt free living or the lack thereof effects every aspect of your life. If you are overwhelmed with debt, there is little else you can think of. Debt free living seems like an unobtainable dream to most.

Debt free living. How to do it? As I struggle with debt myself, I have to ask myself. Is there a way out? Certainly not as easy one. If is comes right down to it, what is said most often in this case is most true. If you can’t pay for it, don’t buy it. Pay more then the minimum payment each month or you’ll never pay it off. Just take a deep breath and decide you don’t want to live your life this way anymore.

Debt free living is possible, but not easy. It takes hard work and determination. It is a goal of mine and I believe should be a goal of everyone. When I send in that last payment on that last credit card – I will have the best nights sleep EVER. And that day will come. I will experience debt free living before I am too old to enjoy it. We all should. Debt free living should be everyone’s goal. Or at least not getting into debt to begin with.

About Author

Jennie Crawford is the stay at home mom of two children. For more information on getting debt free, go to http://www.jenniecrawford.com/debtfreein3

Source: ArticleTrader.com

By:  Stephen Snyder

Reprinted with Permission

Less than 6% of the population in the United States can brag about having FICO credit scores above 800.

It’s an elite club.

The benefit of having a score above 800 is that you’re guaranteed credit approval with the best terms from the best lenders. No hassles. Only the red carpet treatment.

But do you really need to have FICO credit scores that are 800 or higher to accomplish your goals? I don’t think so. Any score over 740 is worthy of celebration.

You may have scores in the high 500′s or low 600′s, and you may think “740, yeah right!” But if you follow the steps I’m about to outline, you will see your scores approach 740 and you will become much more attractive to lenders.

So how do you go about building your FICO scores to 740?

I can’t tell you specifically, because I don’t know what your negative reason codes are. You see, the secret to increasing your FICO credit scores is for you to understand your negative reason codes.

Negative reason codes are a boring topic to people with good credit.

But to people that had credit challenges in the past, it can mean the difference between continuing to be denied credit or hearing those wonderful words, “You’re approved.”

Your negative reason codes are the keys to unlock credit doors that up until now have been slammed in your face.

The great thing about negative reason codes is there is no guesswork involved. Your negative reason codes will tell you everything you need to do to accomplish your goals of buying that new car you always wanted or getting approved for that mortgage with a single digit interest rate and no money down.

By understanding and acting on your negative reason codes lenders will no longer treat you like a second-class citizen. No more “special finance” departments. No more high-interest finance companies. You can look for an apartment or begin house shopping with confidence.

Powerful stuff. And it’s easier than you think.

First of all, negative reason codes are two digit numbers that accompany each of your credit scores.

When you purchase your FICO scores you should automatically receive four negative reason codes for each score (from each credit reporting agency), giving you a total of twelve codes.

…as long as you purchase your scores and codes through the right source.

The best place to purchase your scores and twelve negative reason codes is NOT myfico.com. You don’t receive all twelve negative reason codes from myfico.com.

Technically, you receive four negative reason codes and eight “positive” reason codes. Unfortunately the positive reason codes are absolutely no help to someone with low credit scores.

I was so frustrated that Fair Isaac didn’t give all twelve negative reason codes that I begged Fair Isaac to make the real negative reason codes available to the public. So after several months of me prodding them, they finally gave in and created myfico/12.com for us. Through this site you get everything lenders see! Cool.

Mortgage lenders are another good source to get your scores and negative reason codes when you apply for a mortgage. Just be sure your mortgage company follows the new FACT Act and shares your scores and codes with you. It’s mandatory now.

Alright. So now you know what negative reason codes are and how to get them.

How do you know what these codes mean?

The definition of each code is explained with your credit scores.

For instance, a negative reason code “38″ will be defined as: “serious delinquency, and derogatory public record or collection filed.” A negative reason code “08″ is defined as: “too many inquiries last 12 months.” So your negative reason codes tell you exactly why your scores aren’t higher.

Unfortunately, the definitions provided by the credit reporting agencies are not as detailed as I would like. That’s because they were designed to help lenders explain why you were declined…not designed to be shared with consumers.

This should help.

I was fed up with how difficult it was to decipher negative reason codes. (Boy, I’m fed up a lot, aren’t I?) So one day I sat down and read every single reason code, then rewrote it in plain English so I could understand it!

Imagine how much easier it would be for you to understand your negative reason codes if you had this plain English translation for yourself?

 

http://www.lifeafterbankruptcy.com/links/CodeReport.pdf

 

By: Talbert Williams

There are simple, common sense steps you can take to get out of debt. Unfortunately, like losing weight, they are not necessarily easy or painless – but if you stick to them, you will become debt-free.

Stop Borrowing Money

The first step to escaping debt is to stop borrowing. Simply put, the more you borrow, the more you will owe. You can’t borrow your way out of debt, but must instead pay off your existing debts while not borrowing additional funds.

If you are a typical consumer, you engage in a lot of borrowing by making purchases with credit cards. You should try to break this credit habit. Most credit card companies and store cards will reduce your credit limit if you ask them to do so. (The credit card company may try to talk you out of lowering your credit limit – because they make the most money when they let you borrow more than you can afford.) You can also cut up some or all of your credit and store cards.

Budget Your Income and Expenses

Map out your income, expenses, and payments on your existing debts for a typical month, and create a balanced household budget. Remember to budget some money for emergencies – if you are fortunate enough that no emergency occurs, you can either save the money for future emergencies or (if you are afraid that you will spend it) use it to pay down some of your debts.

If you are paying credit card debts, budget to pay more than the minimum required monthly payment. Minimum payments are usually set in an amount such that, if you don’t make an additional payment toward the credit card balance, you will never pay off the debt. Usually, your credit cards will carry the highest interest of any of your debt, and thus it will make sense to pay them off first.

If you cannot figure out how you can possibly pay your bills and still have enough money to survive at the end of the month, you may wish to consider using a credit counselor or a debt management service. You may also wish to consider the possibility of a debt consolidation loan.

Stick To The Budget

For many people, this is the hardest part – it is easy to create a theoretical budget which allows them to get their debts under control, but impossible to resist the impulse purchases which break the bank each month.

You can help avoid temptation by cutting up your credit cards and instead making your purchases with cash. As previously mentioned, you can also have your credit limits lowered.

If you need help creating a workable budget or sticking to the budget, as previously suggested, you may wish to work with a debt management service.

Reprinted with permission from http://www.articlecity.com

By: Gary Foreman

This month on our two credit card statements are notices informing us that as of Oct. 1st we may be charged “more than two” late fees or over the limit fees” per month. What’s going on?

Gwen

It’s estimated that Americans charged $1.8 trillion in 2005 on the 690 million credit cards outstanding. According to a Government Accountability Office study released in September, 2006, 13% of credit card users were assessed over-limit fees and 35% were assessed late fees in 2005. So Gwen has a lot of company. Let’s try to do three things. First, understand what these fees are. Next, see how fees are changing. And, finally, what Gwen can do to keep from being hurt. Credit cards have always had fees. Some, like for a late payment, are understandable. Others came along as credit cards took on new capabilities. Think cash advance and balance transfer fees. Still others, like over-limit fees, seem like they shouldn’t be possible. You would think that they wouldn’t allow you to borrow more than your limit. There are also ‘penalty interest rates’. If you’re late with a payment or go over your credit limit you could see your rate bumped to 30% or more.

The 2006 GAO study looked at fees and penalties. It said that not only were fees increasing, but the credit card companies were doing a lousy job of informing consumers about those fees. The credit card companies are obligated to tell you about any fees or penalties and how they’re triggered. Some fees, like paying your credit card bill by phone, are sometimes not clearly disclosed. What Gwen received with her statement was a notice of a change in how fees would be charged. And, as long as she’s notified they can get by with almost anything. Late fees have nearly tripled in the last 11 years. And many cards have adopted a ‘universal default clause’ that says a late payment on any card will trigger the penalty interest rate. Credit card companies say that the higher interest rates and fees are appropriate based on risk factors. If it weren’t for the higher fees, they claim that they wouldn’t be able to offer credit to riskier consumers. In fairness, the GAO’s survey found that (at least among 6 of the largest card issuers) 80% of accounts paid interest rates of less than 20%. So the vast majority of card users are not paying penalty rates.

But the study also found that the disclosures were written well above the eighth grade reading level and (surprise!) featured small print. They recommended that the Federal Reserve Board revise rules on credit card disclosures. Now that we understand what’s going on we can try to help Gwen avoid problems. The first thing is to recognize that the card issuers get to make most of the rules. And, whether those rules are fair or not isn’t relevant. The best she can do is to avoid getting hurt by those rules. Get familiar with each account. The only way to know exactly what’s allowed is to read and understand the “Card Member Agreement.” Tough duty. But necessary. Watch out for unexpected fees. Like for balance transfers or increasing your credit limit. Know what could trigger fees or penalty rates. Know exactly when your payment is due. Keep a list of due dates for your credit card accounts. If you don’t get the bill, it’s your responsibility to contact the company and still make a timely payment. If possible, the best thing to do is to join nearly half of the cardholders who paid little or no interest. That’s because they do not carry a balance.

Obviously, for many people that’s not immediately possible. Then it’s important to send in your payment as soon as possible. Being seven days early is better than being one day late. If you find it difficult to get your payment in on time, you might want to authorize the credit card company to automatically debit your checking account for the minimum payment each month. You’ll probably pay for the service, but that way the payment can’t be late. Talk to your card issuer. If your due date falls at a bad time of the month, they’ll move it.

If Gwen is near or over the limit on any card, she should try to shift part of the debt to a different card. Some fees are even being assessed when an account is merely getting too close to the limit. Your best bet is to keep balances to less than half the available credit. Although the higher late fees are infuriating, they do minimal damage. The real problem is in the universal default clause. Most credit card accounts now have a universal default clause. Suppose your rate went from 15% to 30% on every open credit account. For every $1,000 you owe, an extra $150 interest would be charged each year. So if you’re the type of person carrying a $10,000 balance, that one late payment could cost you $1,500 per year. For as long as you have the balance! Gwen is right to pay close attention to her credit card accounts. With newer fees and penalty rates in place, it becomes more important to manage your credit. In fact, it’s critical to your financial wellbeing. _______________

Gary Foreman is a former financial planner who currently edits The Dollar Stretcher website . If you’d like to stretch your day or your dollar visit today! You’ll find hundreds of articles to help you “live better…for less”.

About The Author Gary Foreman is a former financial planner who currently edits The Dollar Stretcher website . If you’d like to stretch your day or your dollar visit today! You’ll find hundreds of articles to help you “live better…for less”. View their website at: http://www.stretcher.com

This article was reprinted with permission from http://www.articlecity.com