Looking for Oregon credit repair?

Errors and inaccurate information on your credit report can cause your credit score to be lower than it should be.

Here's a few TIPS ON HOW TO CORRECT YOUR CREDIT REPORT:

1.  Take a close look at your credit report!

If you don't have a current credit report or if it has been a long time since you took a close look at it, you need to get an updated report.

Your credit report is constantly changing as creditors are reporting and or inquiring about your credit report.

You can get a FREE Credit Report by going to WWW.ANNUALCREDITREPORT.COM  This site will link you to all three of the major credit reporting agencies... Equifax, Experian and TransUnion.

2.  Mark any items on the report that you need to dispute

Sometimes you will find items on your credit report that just shouldn't be there such as:

• Paid off or settled accounts that still show a balance
• Judgments that you have satisfied that still are showing a balance owed
• Accounts that have been on the report for longer than the statute of limitations in your state
• Inaccurate names or addresses
• Accounts that are not yours (yes, this happens)

#3 Submit your dispute to each of the three credit reporting agencies

Write a letter to each credit bureau detailing your challenge and requesting that the item is removed or corrected.

You should also demand that the creditor reporting show a complete history of the debt (Fair Credit Reporting Act).

It usually takes 30 days or more for the credit bureaus to respond, so you may need to do a lot of follow up.  But DON'T GIVE UP!

Yes you can have incorrect or inaccurate information removed, but it will take time and effort!

If you would like help, please let us know!

If you have a 2nd Mortgage and are able to complete a short sale, you will probably be responsible for the deficiency balance on the 2^nd mortgage.  The good news is, you may be able to negotiate the deficiency balance and eliminate that outstanding debt for much less.

Before I begin, let’s take a look at the benefits of both a Short Sale and a Foreclosure to help you decide if a Short Sale makes sense for you and your family.

Benefits of a Short Sale

• You are in control of the sale.
• You may sleep better at night knowing who is buying your home.
• Your home sale will be handled like any other home sale.
• You will be eligible, under Fannie Mae Guidelines, to buy another home in 2 years instead of 5 years.
• If your credit report does not reflect a 60 day late pay, under Fanny Mae guidelines, you will be eligible to buy another home immediately.

Benefits of a Foreclosure

• There are no mortgage payments to make while you are waiting for the foreclosure to be completed.
• The home is yours until the foreclosure is final.
• There will be no strangers touring your home.
• Some banks offer "cash for keys" after a foreclosure sale.

After researching your options, you decide to move forward with a Short Sale in an attempt to avoid foreclosure.  It’s important that you understand, in most short sales, the first mortgage holder, is the primary beneficiary of the short sale.  This means that most short sales compensate the primary or first mortgage holder and the second mortgage holder usually agrees to accept a very small amount or percentage to RELEASE the equity interest in the home.

In other words, the second holder agrees to have the remaining balance (after the small amount paid for releasing the equity interest) become an UNSECURED LOAN now.

And, in most cases, you are still responsible for this balance!  The good news is, you can usually negotiate a second mortgage balance after a short sale.

Here are 3 tips on how to negotiate a second mortgage after a short sale

#1 Get Prepared

Before you attempt to negotiate the debt with your 2^nd mortgage servicer, you need to know where you stand financially.  It would be a good idea to complete a simple BASIC BUDGET that lists all of your assets and liabilities.

This will show the second mortgage holder where you stand and what you possibly could or could not do to settle the remaining balance.

#2 Don’t Ignore your 2^nd Mortgage Holder

Most of the time, your 2^nd  mortgage company will try to contact you right away.  Don't just ignore their calls or letters as this will leave them no choice but to file a claim with the intent of getting a judgment against you for the remaining balance.

If they do file a claim, you will receive a SUMMONS and your chances of getting a good settlement go down!

Be proactive!  If they haven’t contacted you, then you need to call them to get the communication going.

#3 Start Negotiating

Although the negotiation process can be long and in some cases, very stressful, most second mortgage holders will accept a settlement for less than the amount you owe. How much less?

That depends on many factors.  Your 2^nd mortgage servicer will want to know:

• What are your financial assets? (usually there are no assets or you wouldn't have had to do the short sale in the first place)
• Are you employed?
• Are you receiving retirement income?
• Are you receiving unemployment income?

All of these things are taken into consideration when working out a settlement with you.  Because you have already worked out your budget, you know where you stand.  Stick to a settlement with payments you can afford. There is no point in negotiating a settlement that you default on in the first month. 

Don’t forget to GET THE SETTLEMENT AGREEMENT IN WRITING!  Do not rely on phone conversations or just emails. If you don’t, they can come back for the full amount even after you’ve paid the agreed settlement. 

If all of this seems like just TOO MUCH, click here & let us help!

Is it possible to negotiate student loans? 

It depends... There are basically two types of student loans:

• Government Loans
• Private Loans

There are several types of government loans, but for the most part, these cannot be negotiated.

That doesn't mean you shouldn't try! 

Besides having several repayment options, it may be possible to offer a reduced LUMP SUM PAYOFF of 50%-75% of your balance and pay off your student loan at a reduced amount.

Since most deferment or repayment plans are based on your financial situation, you should gather as much information about yourself as possible before making the calls. In order to  have a chance of negotiating a lower lump sum payoff, you must show that you are in struggling financially.

Start with a basic budget that shows your assets vs. your liabilities.

Again, if you do not have approximately 50% -75% of the balance due, you are probably wasting your time trying to negotiate a federal student loan.  However, budgeting will help you make a plan to save for that negotiation in the future.

You may be able to negotiate a PRIVATE student loan for less!

If you have a PRIVATE STUDENT LOAN from a bank, credit union or other private lending source, you have a VERY GOOD CHANCE of negotiating the loan!

Again, gather all of your financial information BEFORE you make the call.  When you call, explain your HARDSHIP and SITUATION and then ask the agent how much they would be able to reduce the balance if you were to pay in a lump sum right away.

LET THEM GIVE THE NUMBER FIRST!  It may be a lot less than you were willing to pay, so don't offer any amount!

Debt negotiation is not always easy for first timers, so you may want to get some advice or counseling before your call.

If you are successful in negotiating a lower amount, MAKE SURE TO GET IT IN WRITING!

Too many people have sent payments or authorized a check-by-phone debit after speaking with an agent and find out later that the company had NO KNOWLEDGE OF THE CONVERSATION!

Debt negotiation takes a lot of time and patience. 

If you would like help, click here for a FREE REVEIW.

If you are behind on your payments to creditors, you can count on getting collections calls.  Can anything be done to stop the collection calls? YES

How to STOP COLLECTION CALLS:

1. Know your rights

The Federal Trade Commission is an agency whose job is to protect consumers from unscrupulous and illegal activity by debt collectors.

You should download a copy of "Facts for Consumers".

2.  Keep a call log

If you are employed, and getting calls at work, most states authorize you to verbally request that the creditor cease calling you at work.  However, you need to keep a log of calls and your "cease and desist" request for future proof if needed.

3.  Get the collection company's name and address

If you have been getting many calls (some creditors call using an auto-dialer/computer), then you know how annoying it can be.

By getting the name of the company and the address, you can write a letter stating that even though you cannot make payments at this time, you intend to repay this debt.

For Example:

"I have been getting several calls daily from your company about my account.  Although I cannot make any payments at this time, I fully intend to repay this debt as soon as my financial circumstances turn around."

"According the the FDCPA, I am requesting that you cease all calls to my home and/or cell phone."

"If these calls do not cease, I will be reporting your company to my state's Attorney General to begin legal action."

4.  Keep copies and use Certified Mail

Once you have written your letter, make a copy to keep for your records and mail it by CERTIFIED MAIL.  This way, you will have proof that they received the letter.

Most creditors will abide by your CEASE CALLING LETTER, but if you continue to get calls, you may want to go to your state's Attorney General's website and file a complaint.

For example, in Oregon, you would go to: OREGON CONSUMER COMPLAINT.

At DRNW, Inc., we have years of experience in helping our clients with issues like this. Click link below for a FREE Debt Elimination Analysis or simply give us a call at 877-492-4109.  Our debt solutions specialist can work with you to find the best solution for your unique situation.

Most retirees ask me "Can my retirement income be garnished?"

For the most part, the answer is NO when you are dealing with unsecured debts, such as:

• Credit Cards
• Personal Loans
• Medical Bills
• Store Cards
• Etc.

However, if you have delinquent taxes or other secured debts, you should definitly check with your tax advisor or attorney.

If you have accumulated too much unsecured debt then your RETIREMENT INCOME IS EXEMPT FROM GARNISHMENT! According the the federal Trade Commission, not only is your retirement income exempt, so are:

• Social Security  Benefits
• Supplemental Security Income (SSI)
• Veteran's Benefits
• Civil Service and Federal Retirement and Disablility Benefits
• Military Annuities and Survivor Benefits
• Student Assistance
• Railroad Retirement Benefits
• Merchant Seaman Wages
• Longshoremen's and Harbor Workers' Death and Disability Benefits
• Foreign Service retirement and Disability Benefits
• Federal Emergency management Agency Federal Disaster Assistance

Can a creditor garnish my bank account to get at my retirement income?

Sometimes they can.  It's extremely important to NEVER CO-MINGLE FUNDS from retirement sources with any EARNED INCOME your bank account!

Let's say you are retired, but working a part-time job to make ends meet.  If a creditor is awarded a judgment (and this would be only after you had received a SUMMONS), and you have CO-MINGLED your funds, your bank may be forced to FREEZE YOUR ACCOUNT!

It is a very good idea to keep separate accounts (and I recommend SEPERATE BANKS just to be safe) for income from your part-time job.  Or, you could always just CASH YOUR PART-TIME CHECK to be safe.

If you are receiving calls from collectors, we can help!

If you have delinquent, unsecured debts, we may be able to negotiate a reduced settlement by up to 50% or more! Click on the following link for more information -->

A client called us the other day and asked, "Do you have to pay tax after settlement?"

In most cases, the answer is NO.

When you negotiate a settlement on a debt you owe, let's say a credit card with a $10,000 balance is settled for $4,000 (yes it is very possible!), the amount that is FORGIVEN may be added back into your taxable income for that year.

At the end of the year, you will receive a 1099-C in the mail that states that the creditor has reported the $6000 of forgiven debt to the IRS (any amount forgiven over $600 may be subject to IRS reporting).

What do you do when you receive a 1099-C?

First, if your accountant or tax preparer tells you that you will have to pay tax on that amount, you probably need to find a new accountant!

Why?  It has been my experience that most accountants and tax preparers are not aware or experienced in how to treat 1099-C for settlements or forgiveness.

IRS Form 4681 explains that certain amounts of "forgiven debt" may be excluded from taxable income.  Basically, if AT THE TIME OF FORGIVENESS, you were INSOLVENT (your debts were greater than your assets), then the forgiven amount IS NOT included as taxable income.

List all of your assets:

• Any equity you have in your home
• Net or depreciated value of your cars, boat, etc.
• Net value of your jewelery, stocks, bonds, etc.
• Cash

Now list all of your debts:

• Mortgage (First and Second) on your home
• Lines of credit
• student loans
• credit cards
• medical bills
• personal loans

Subtract the DEBTS YOU OWE from your ASSETS.  If the number is negative, then you are "insolvent" according to the IRS. Complete IRS Form 982 and check the appropriate boxes to show that this amount should be excluded.

The moral of this story, don't think that just because your accountant or anyone else tells you that you must automatically pay tax after settlement, that it is always true.

photo by: Alan Cleaver

How much of your income is exempt from garnishment?

For the sake of this blog, let's walk through a hypothetical example of how a wage garnishment is calculated by your employer.

Let's say you had financial problems (layoff, divorce, illness, etc.) and could not make the required minimum payments.

• The account becomes delinquent
• After numerous calls from the creditor (HOW TO STOP CREDITOR CALLS)
• Account is charged off and sent to a DEBT COLLECTOR
• Process repeats (Need to STOP THESE CALLS ALSO)

If an agreement cannot be reached between you and your creditor/collector, the creditor may instruct the collector to retain an attorney (many collectors are attorneys) to file a CLAIM or LAWSUIT for the debt you owe.

You would then receive a SUMMONS.

Again, if an agreement (usually called a STIPULATED AGREEMENT), cannot be reached, then a court date is set and the PLAINTIFF or CREDITOR would be awarded a JUDGMENT.

Now the plaintiff can apply for a WRIT OF WAGE GARNISHMENT.

Your employer is legally bound to honor the WRIT and uses a WAGE EXEMPTION or CALCULATION GUIDE to determine how much of your wages must be sent to the court.

In Oregon, ORS 18.385 says basically that the MAXIMUM subject to GARNISHMENT is 25% of an employee's DISPOSABLE INCOME (AFTER-TAX, TAKE-HOME).

Unless the employee is left is less than $218 per week!

So, if your net, disposable income is $218 x 4.2 weeks or $915.60 per month, you would not be subject to garnishment.

But, let's say you are earning $15/hour and working 40 hours x 4.2 weeks per month or $2,520 GROSS (BEFORE DEDUCTIONS).

Again, let's say your net deductions are 27% of your gross income, leaving you with a net take-home income of $1,839.60.

In Oregon, 25% of the net take-home (most states are 25%, but be sure to check your state's code) must be garnished.

$1,839.60 x 25% = $459.90 per month!

For most people, that would be financially devastating!

Before you let your delinquent accounts go this far, give us a call or contact us right away!

We may be able to arrange a repayment or settlement plan to avoid wage garnishment.

We all know that "Money Doesn't Grow on Trees", right?  When we work hard all week long, we want to be able to see the fruits of our labor.  When creditors garnish your wages, it can be devastating.

Is there anything you can do to stop a wage garnishment?

Yes you can.  Here are 3 things you should know to stop wage garnishment:

1.  Your wages can't be garnished if you take home less than your state's minimum.

Usually, when your employer receives a NOTICE OF WAGE GARNISHMENT, it usually has your state's formula for determining how much or if, your income is subject to garnishment.

If you are employed for example in Oregon, and our NET AFTER TAX or TAKE HOME IS $218 or less, then your wages are exempt from garnishment!

2.  If your income is subject to garnishment, you may be able to work out a repayment plan with your creditor that is less than what the garnishment would be.

If your income is greater than $218/week, then 25% of your NET INCOME would be withheld by your employer and sent to the creditor per the Writ of Garnishment.

You should contact the attorney for the creditor (it is on the summons or writ of garnishment you received) and see if you could negotiate an amount for less. Some creditors may be willing to work with you.

We have had great success in the past helping people with wage garnishments, and working out a STIPULATTED AGREEMENTS in lieu of garnishment.

3.  Your income may be EXEMPT FROM GARNISHEMENT if it comes from one of the following sources:

• Social Security
• Retirement Income
• Unemployment
• Disability Benefits
• Worker's compensation
• Spousal Support or child support
• Elderly rental assistance (ORS 310.6355)

If you are not sure if your income is exempt, we may be able to help.  Give us a call today at   1-877-492-4109 or simply click on the link below for more information!

If you have too much debt and not enough income to service the minimum payments, it is time to take action before bankruptcy is your only option.

Here are 3 tips that will help you find debt relief

#1 Take a close look at your finances

You need to find out exactly where you are in your finances. In other words, you must know how much you have coming in each month and how much must go out.  One of the best things you can do is to sit down and complete a BASIC BUDGET.

BE HONEST WITH YOURSELF!

NET INCOME means this is what you have left to spend after mandatory state and federal taxes are taken out of your paycheck. If you are self employed...don't kid yourself...you are going to have to PAY UP, so deduct those taxes (including payroll if you have employees).

#2  Evaluate your debt

How much unsecured debt (credit cards, store cards, personal lines of credit, medical bills, etc.) do you have and more important, how much is the minimum payment required to meet all of them?

If you must have $500 a month just to cover the minimum payments required, and you honestly only have $350 a month after all mandatory expenses, YOU'VE ONLY GOT A COUPLE OF CHOICES.

#3  Review Your Options with an Experienced Counselor!

Don't give up and just seek bankruptcy.  Bankruptcy may end up being the best choice for you, but before you jump in, make sure you know all of your options!

• A DEBT MANAGEMENT PROGRAM

• A DEBT SETTLEMENT PROGRAM

In order to determine which program is best for you, you will need to spend a few minutes with an experienced counselor.  This service is FREE and you are under NO OBLIGATION.

If you are wondering if you can negotiate a second mortgage after a short sale, I've got good news for you...YES YOU CAN!

If your property had a first and second mortgage and you chose to do a short sale rather than allow a foreclosure (usually the best choice in my opinion), then here's what happens:

The real estate agent or broker usually negotiates an amount in a short sale to satisfy both the first and second mortgage holder.

In most cases, the second mortgage holder receives a lot less than the first mortgage holder.

Depending on the agreement, language, etc. of the documents, whatever the 2nd mortgage holder receives is all they get.

However, in some cases, when the 2nd mortgage is very large, the 2nd mortgage holder may have the right to make a claim for the remaining (called deficiency balance) due.

The 2nd has now become an unsecured debt, just like any other unsecured debt and can be negotiated.

The creditor will follow the same procedures and any other debt collectors...calls, letters, unlawful threats (violating FDCPA) in an attempt to collect on the remaining balance.

What should you do?

1) Make sure the sale documents give the collector the right to pursue the remaining balance.

When you signed the short sale documents, there was something in there that spelled out how the proceeds were to be distributed to the creditors (1st and 2nd mortgages).

If you are not sure, check back with the real estate agent or broker (they were paid for this!!!)

If it is determined that whatever the 2nd mortgage holder did not agree to a "full settlement for less than was due" (or something to that effect), then you may be liable for the balance.

2) If the collector is calling several times a day, send them letter demanding them to stop immediately!

You don't have to put up with harassment from any collector!

The Federal Trade Commission has very specific rules for what a collector can and cannot do.

3)  Try to negotiate an amount that is much lower than they claim. 

In these types of negotiations, it may be possible to get a reduction of 25%-50%, depending on your specific circumstances.

This might be the time to seek professional help, and we can help!