We talk to a number of people who regret signing on the dotted line for their sister, best friend, boyfriend......  If they had just listened to Judge Judy in the first place, they would not be in this position. You should NEVER co-sign a loan for someoen unless you are married to them! That being said, so many people get talked into co-signing a loan and regret it later.

What does co-signing a loan actually mean?

Co-signing a loan basically makes you just as responsible for repaying it as the party actually taking the loan out in the first place.  For many consumers, that seems feasible.  After all, the only people asking you to co-sign a loan are either family members or close friends; you’re not gonna co-sign a loan for any regular Joe.

But, as is often the case, stuff happens and your friend or family member can’t afford to pay the loan off, leaving you holding the bill all by yourself.  So how do you get out of it?

Is it possible to remove yourself from a co-signed loan?

As a wise Homer once said to his wife Marge, “Weaseling out of things is important to learn. It’s what separates us from the animals, except the weasel.”  While we certainly don’t condone weaseling out of your financial obligations, we certainly understand the feeling of buyer’s remorse that comes with co-signing a loan.

Banks and other financial institutions typically don’t let co-signers off the hook unless the other signer can demonstrate he has the funds to pay back the loan on his own.  Since that doesn’t happen often (why would they ask you to co-sign in the first place?), here are three ways to remove yourself from a co-signed loan:

 #1 Time off for good behavior

Some loan programs will release your obligation to the loan as a co-signer if the other person is able to make their payments on time over a set period of time (usually about 2 years).

#2 Have them refinance it

Assuming your buddy has a good credit history on their own and has enough income to make the payments, you can try and get them to refinance the loan in their name. The account may still show up on your credit report, but it should be listed as either closed or paid in full.

#3 Sell, sell, sell!!

Did your friend or favorite second cousin ask to take out the loan for a new car or house?  If so, and they’ve fallen behind on the payments, you can certainly try selling the car or home to help with the payments – assuming your name is on the title. 

Hopefully you can use these tips to get yourself removed from a co-signed loan.  If you need more help, one of our Debt Solutions Specialists can help. 1-877-492-4109

Student loans are a necessary evil for most people.  In order to get a good education after High School, you apply for scholarships, grants, and any other sort of financial aid available. If you are very lucky, you have a college fund set up and ready to pay for that fancy education.  If you are not so lucky, you break down and take out a Student Loan.

Once you graduate, you are usually given a six month grace period to get a job and get on your feet.  After that, you've got to start paying off that debt. 

You should, of course, pay back the debt if you are able to do so. Student loan companies have hardship programs and payment rehabilitation programs available to you if you are struggling.  You can even file for deferment or forbearance to take a break from payments for a short amount of time.  If you have been faced with some unforeseen financial hardship, you may have to file bankruptcy to get you out of debt. But....

Can you file bankruptcy with student loans?

Student loans are difficult, but not impossible, to discharge in bankruptcy.  To do so, you must show that payment of the debt “will impose an undue hardship on you and your dependents.”

Courts use different tests to evaluate whether a particular borrower has shown an undue hardship. A common test is the Brunner test which requires a showing that:

1. The debtor cannot maintain, based on current income and expenses, a “minimal” standard of living for the debtor and the debtor’s dependents if forced to repay the student loans
2. Additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period of the student loans
3. The debtor has made good faith efforts to repay the loans. (Brunner v. New York State Higher Educ. Servs. Corp., 831 F. 2d 395 (2d Cir. 1987).

If you can successfully prove undue hardship, your student loan will be completely canceled. Filing for bankruptcy also automatically protects you from collection actions on all of your debts, at least until the bankruptcy case is resolved or until the creditor gets permission from the court to start collecting again.

Assuming you can discharge your student loan debt by proving hardship, bankruptcy may be a good option for you. It is a good idea to first consult with a lawyer or other professional to understand other pros and cons associated with bankruptcy. For example, a bankruptcy can remain part of your credit history for ten years. There are costs associated with filing for bankruptcy as well as a number of procedural hurdles. There are also limits on how often you can file for bankruptcy.

Whether a student loan is discharged based on hardship is not automatically determined in the bankruptcy process. You must file a petition (called an adversary proceeding) to get a determination. 

If you already filed for bankruptcy, but did not request a determination of undue hardship, you may reopen your bankruptcy case at any time in order to file this proceeding. You should be able to do this without payment of an additional filing fee. 

Bankruptcy with student loans should ALWAYS be a last resort!

If you are struggling with your debt payments but you are not ready to throw in the towel and file bankruptcy, you can get help in other ways. 

Start by creating a budget for yourself.  Once you track your spending for a month, using this Free Budget Spreadsheet, you will be able to see where you can make changes. 

Next, explore other options to reduce your monthly payments.  If you have outstanding debt that is not part of your student loans, there are programs available to help you reduce your monthly payments and interest.  This can help you free up some money to put towards paying off those student loans!

For more information on programs available to you,

click the link  below!

Reading a credit report can be confusing, but it is much more simple than you think.  This video from About.com will walk you step by step through a credit report and explain just what it is you are looking at.

If you don't have a current copy of your credit report, you can get a Free credit report at www.annualcreditreport.com.

So, how do you Read a Credit Report?

Now that you have carefully reviewed your credit report, you have a better understanding of what creditors are seeing when you apply for a loan. 

If you found any mistakes or debts that you do not believe you owe, you can dispute these errors and have them corrected by the credit reporting agencies. Credit Card Debt Depair is easy and you can do it yourself!

If you have more debt than you realized or more debt than your monthly budget can handle, there are programs that can help.

• Debt Consolidation or Debt Management will reduce your monthly payment, reduce your interest rate, eliminate creditor fees, and have you out of debt in just 3-5 years! This type of program is great if you are basically current or just starting to get behind on your monthly payments, but you have high interest rates and fees.

• Through the Debt Settlement program, your Debt Solutions Specialist will work with you and your budget to determine a monthly payment that will work.  The money you pay monthly will be used by your personal Debt Negotiator to settle your debts for 50% or less than what you owe.  

If you would like some help getting rid of your debt, click the link below for a FREE Debt Elimination Summary!

Worrying about your debt won't make it go away, but for millions of Americans the stress from deepening debt is becoming a major pain in the neck - and back and head and stomach! But stressing about your debt won't make it go away. 

You MUST make a Debt Payoff Plan! 

With so many different debt elimination methods available these days, it can seem like a tough task getting started and following through with a plan that will actually get you out of debt.

The answer is simple.  You just have to take one step at a time.  In this post I’m going to cover a simple debt elimination plan that will have you on your way to getting debt free in no time at all!

Clean Up Your Budget

The first thing you need to do is clean up you budget or if you don’t have one get started now.  A budget will help you get things in order and let you know how much money you are spending each and every month and how much you are saving.

What you are really looking for is how much money you actually have left over at the end of the month.  Having an extra $100 set aside for your debt elimination plans is all you need to get started.  If you don’t have any extra money left, you may have to eliminate some things from your budget, get a part time job to help out, or find a way to reduce your monthly minimum payments while still eliminating your debt. (such as Debt Consolidation or Debt Settlement: see below)

Get Your Debt Together

Next you need to get all of your debts in order.  To do this grab all of your creditor statements.  And put all of your debts in order, so pull out a blank sheet of paper and list all you debts from the lowest balance to the highest balance.

When you have this done your mortgage should be listed as the last debt to be paid off and something like a credit card should be the first thing you pay off.  The reason for this is because I want you to see results quickly by paying of the debt with the lowest balance.

Eliminate The Debt

There are several ways of going about eliminating your debt.  However, what you must stop doing is only paying the minimum payments.  If you don't, you will end up paying back at least three times what you originally owed and will spend decades paying back the debt.  Here are three of the best debt elimination options available to you:

• Debt Consolidation or Debt Manegment - In this program, your Debt Consolidation or Debt Management company will work with your creditors to reduce your interest rate, eliminate fees, and lower your monthly payment.  Another plus to this type of program is that your payment will stay the same over the course of the program which will get you out of debt in just 3-5 years on average.
• Debt Snowball Method - This method basically involves listing your debts from smallest balance to highest and paying them off in that order.  You will always make the minimum payment on each debt, but will also contribute any extra money you found in your budget to the smallest debt.  Once that debt is gone, you use the money you were paying on it to pay in addition to the minimum payment on the next debt.  If you can find a little extra in your budget, this is a great plan.  You might also consider the "Debt Avalanche" which uses the same principle. However, instead of paying off the smallest balance first, you pay off the debt with the highest interest rate. 
• Debt Settlement - This is a great plan for anyone who needs to drastically reduce their monthly payments or for someone who is already significantly behind on their payments.  Your Debt Settlement company will negotiate with your creditors and settle your accounts for usually 50% of what you owe.  (sometimes even less)

If your looking more info on creating your Debt Payoff Plan, one of our Debt Solutions Specialist would be happy to anwser any and all of your questions.  Please feel free to email info@debtreliefnw.com or call us at 877-492-4109.

photo by: BLW Photography

We get asked this question nearly every day.  So, it's time to answer the question:

Can Social Security Disability check be garnished?

The simple answer is SOMETIMES.  Social security disability benefits can be garnished. However, garnishment can only be carried out in a few specific instances. According to the social security administration, social security disability benefits may only be garnished to enforce child and alimony obligations, pay federal tax and debts owed to the IRS, and pay debts owed to federal agencies.

Your Social Security Disability checks CAN be garnished if:

• You have alimony or child support obligations
• You have a delinquent student loan
• You owe taxes or IRS penalties

Creditors, however, are NOT entitled to garnishment provisions for social security disability benefits. 

Your Social Security Disability checks CAN'T be garnished if:

• You are delinquent on a personal loan
• You are delinquent on a car loan
• You are delinquent on a credit card debt

However, if you are behind on a personal loan, car loan, credit card or other type of debt, you need to set up a plan to get the debt caught up and on a re-payment schedule.  There are programs, such as Debt Consolidation & Debt Settlement, that can help to reduce your monthly payment, lower or even eliminate the interest being charged, and get you out of debt FAST!

Our Solutions Specialist can help you decide what is the best option for you.  Give us a call for a Free Debt Elimination Consultation or click on the link below!

1-877-492-4109

photo by: the Italian voice

Debt Settlement vs. Bankruptcy?

Choosing between debt settlement and bankruptcy in while facing a huge pile of debt is a tough decision to make. It is important to understand that although both debt settlement and bankruptcy offer Debt Relief, they work very differently. In order to make an informed decision, you need to understand the difference.

The Proccess of Debt Settlement & Bankruptcy:

Debt settlement is a debt reduction program where the creditor accepts a reduced amount from the debtor, in order to settle the account in full. A great Debt Settlement Program can and will settle your debt for 50% or less of your total debt. Once you have completed the Debt Settlement Program, the creditor will report your account to the Credit Bureau as “settled” or “paid”.

Bankruptcy is a court based procedure, which is initiated by the debtor. Consumers are permitted to file personal bankruptcy under Chapter 7 or Chapter 13 of Title 11 of the Federal Bankruptcy Code.

During Chapter 7 Bankruptcy, the court sells off your non-exempt assets and uses the proceeds to pay your creditors. Remaining debts are discharged by the court and you are declared debt-free.

Chapter 13 bankruptcy is a reorganization of your existing debts. The court appointed trustee will set up a repayment plan to help you pay off your debts comfortably within 3-5 years.

Once your bankruptcy is complete, you are relieved of all debts and allowed to rebuild your finances. However, bankruptcy procedures are usually much more complicated compared to debt settlement.

How will Debt Settlement and Bankruptcy effect on your credit score?

Bankruptcy can hurt your credit score by 200-250 points. The total extent of the damage depends on the nature of the other negative remarks you have on your credit report. Bankruptcy remains on your credit report for 7-10 years, which will prevent you from getting credit in the future.

Debt settlement will lower your credit score at first, but as you keep making payments on time, your credit score increases.

So, which option is better?

Debt settlement is preferable to bankruptcy if you are able to make a reduced monthly payment. You should explore all possible debt relief options before you file for bankruptcy.

Debt settlement gives you the following benefits:

• You pay less and get rid of your debts completely!
• You will get out of debt much faster!
• You avoid losing your home and car!
• Debt settlement does not damage your credit score as badly as bankruptcy does!

What is a SECURED CREDIT CARD?

A secured credit card is one on which you don’t have to make monthly payments. It doesn’t add to your debt because you have to load money onto the card before you are able to use it. The amount you place on the card is your available credit. It is not a debt that you incur, but it does give you peace of mind in knowing that you do have a credit card to use for emergencies or while on vacation.

You can obtain a secure credit card from your bank even if this bank will not approve a regular credit card for you because it is not the bank’s money that you are borrowing – it is YOUR MONEY.

How will using a secured credit card RAISE MY CREDIT SCORE?

Even though you don't have to qualify to get a secured credit card, the bank does report your use of the card to at least one of the three credit reporting agencies (TransUnion, Experian, or Equifax). This card doesn’t show up on your credit report as a secured card, but is seen as a positive item on your report. The fact that you are not carrying a balance on the card means that you don’t have any debt on the card and you have available credit to use for your needs. It's a Win Win!

If you do decide to use a secured credit card to help raise your credit score, be sure to read the FINE PRINT! There are fees associated with the use of the card, so it is important to find the one with the lowest fees, thus giving you more of your money to spend.

Also important to make sure that the issuer of the card reports to all three credit agencies. If not, it is possible that it may report to one where your credit score is seen as being in good standing and this won’t help you.

When you load money onto your account every month and make sure you have enough there to cover the fees. Most of the time, after you have been using the card for a period of time, the bank will see that you are responsible with credit card usage and will then transfer the card to one that you don’t have to pre-pay.   In the majority of cases, it will take about 6 months to a year for this to happen, which is about the same amount of time it takes for you to see any improvement in your credit score.

Key Take Aways:

1. A Secured Credit Card is a card that you get from your bank and "load" with money.
2. The bank will report your credit card usage to one or all of the three credit reporting agencies.
3. When you "load" money onto the card, be sure to put enough to cover what you plan to purchase AND the bank's fees.
4. After 6-12 months you should start to see an increase in your credit score and may be offered a regular credit card by the bank!

Already have too much debt? 

We can help with that too. 

Give us a call or click on the link below!

1-877-492-4109

Got Wedding Debt?

The average wedding costs approximately $26,000. No wonder many couples find themselves entering their new marriage in debt. Money troubles are the number one cause of marital discord and you don’t want them hanging over your new marriage. Here’s how to enjoy your life as newlyweds free from debt.

First determine how much money was given as a wedding present. Many guests give money rather than a registry item. Instead of using this money on your honeymoon, or on other things that you want to buy, save yourself some interest charges and put that money towards your debt as soon as possible.

Put off the honeymoon. Couples are beginning to do this more and more as they see the advantages of starting their life together with a good cash flow. If you really want to go away with your sweetie directly after the wedding, consider going to a bed and breakfast somewhere within the country above jetting off abroad. This is extremely romantic and allows you to enjoy some alone time together without driving yourselves further into debt.

Sit down with your new spouse and create a budget. Every penny you make cannot possibly go towards paying off your wedding as you still have all of your regular bills and living expenses as well. Creating a budget will tell you how much you can afford to pay every month and where that money will be distributed. After setting your budget, it’s extremely important that you stick to it.

When you are putting the figures down onto paper, see what loans have the highest interest rate. Usually these are credit cards with interest rates being as high as twenty-one percent! It’s important that you pay these off quickly otherwise, you will end up collecting huge interest charges every month and it will become increasingly harder for you to clear your debts. The next step is to pay off the loans with the largest amount. Decreasing the loan amount decreases your interest and the loan will become more reasonable, changing from the one that doesn’t seem as though it will ever be paid off to the one that can be paid off next month!  Another option is to use the Debt Snowball method.  Whatever method you choose, stick to it!

If the bills seem too overwhelming, seek professional help from a financial consultant. These people you can meet with to review all of your income and expenses and will help you allocate where your money should be going on a monthly basis. Remember an objective third party does not have the same emotional attachment to your money you do. Once they have given you a plan, make sure that you follow it.

The most important thing when it comes to wedding debt is not to argue about it. It makes it very difficult on a new marriage when you not only have money troubles but are also fighting over them. You both enjoyed a wonderful day and you’ve both got to determine how you’re going to pay for it, together. You have a lifetime ahead of you, having to figure out how things are going to be paid for. Now is the time to find out how you work together to solve the problem.

Is there anything you can do about credit report errors?

YES!  If you find errors, you can contact the three main credit reporting agencies:

• Equifax

• Transunion

• Experian

To dispute a Credit Report Error, you will need to go online and fill out a dispute form or write a letter to:

 

Equifax (800) 238-8067

Mail to:

Equifax Disputes

PO Box 740256

Atlanta, GA 30374-0256

 ______________________

Experian (714) 830-7000

Mail to:

Experian

Attn: Disputes

475 Anton Blvd.

Costa Mesa, CA 92626

 ________________________

TransUnion (800) 916-8800

Mail to:

TransUnion Consumer solutions

PO Box 2000

Chester, PA 19022-2000

What do you need to dispute a Credit Report Error?

• A statement or settlement letter from the creditor showing that the account balance was paid or settled-as-agreed
• A copy of the canceled check proving payment was received

Follow up in about 2 weeks if you do not receive any confirmation that the error has been corrected.

BEWARE OF COMPANIES THAT CLAIM TO BE ABLE TO CORRECT ERRORS AND IMPROVE YOUR CREDIT SCORE! ! !

The Federal Trade commission (FTC) has good information on how to correct credit report errors.  CLICK HERE

For a FREE Credit Report, go to www.annualcreditreport.com.

If you need professional help, we have been helping clients for almost 10 years to settle debts for much less than they owe!

For mor information on fixing Credit Report Errors or to get help eliminating your debt, Give us a call!

1-877-492-4109

or Click on the link below

 

 

 

 

 

 

The doorbell rings and you are handed a summons regarding one of your past due credit accounts.

Now what?

First…DON’T PANIC!

• You are not going to jail!
• You most likely (about 99.9% of the time), will not go to court!
• They are not going to come take all of your belongings!

Next…DO NOT IGNORE THE SUMMONS!

For the sake of this article, we're talking about unsecured debts such as:

• Credit cards
• Personal loans
• Medical bills
• Personal line of credit
• Store cards, etc.

When a creditor cannot get a consumer to pay as agreed they may choose to start legal action in order to collect the debt.

A CLAIM will be filed in the county court where you reside.

Then, you will receive a SUMMONS. This is usually hand delivered.

The summons will state something to the effect that you have 20 or 30 days after receipt of the summons to APPEAR IN COURT TO ANSWER THE CLAIM.

An ANSWER is your side of the story if you feel you do not owe the amount of the claim.

Now, just because you don't like the additional interest, late fees and now court costs that have been added to the claim doesn't matter!

So, if you owe the debt, there is no reason to spend the time or money for an answer and NO, YOU DO NOT NEED TO GO TO COURT.

OK, THEN WHAT SHOULD YOU DO?

CONTACT THE CREDITOR OR COLLECTION ATTORNEY FOR THE CREDITOR!

If you are employed  and receive normal W-2 wages(not self-employed, we’ll  get to that later), then you should try to work out a repayment plan so that they don't proceed with legal action.

The Plaintiff is the Creditor and since the collection agency failed to get some kind of payment or repayment plan from you has decided to take the legal route in order to force your hand.

And, IT WORKS! You might have ignored the letters and calls up until now, but now they have your attention!

If a repayment plan cannot be agreed upon, then the creditor may decide to go ahead and apply for a court date.

They will win the judgment in favor of the plaintiff by default, as there is no need for you to show up as you have no defense…you owe the debt!

With a judgment entered in favor of the plaintiff, they can now seek to:

• Garnish your wages or
• Levy you bank account

But again, DON’T PANIC!

A wage garnishment is usually 25% of you net take-home pay, and your employer has no choice but to comply with the court order.

For most people, losing 25% more of your income would be devastating, and you would have to seek bankruptcy protection (Chapter 7 or 13).

But hold on… there is another option:

Most creditors will agree to a STIPULATED AGREEMENT.

It is an agreement (sometimes filed with the court) whereby you agree to pay $XXX.00 per  month until the entire balance (including court costs, attorney fees and back interest) is paid-in-full.

If you can and do get such an agreement, GET IN WRITING before sending any funds!

If you have a source of funds available (401(k), family, friends) so that you could get around 50% of the balance all at once, the creditor may accept that and close the claim.

Once again, GET IN WRITING before sending any funds!

 

BUT WHAT IF YOU ARE UNEMPLOYED, SELF EMPLOYED OR RETIRED?

Certain forms of income are exempt from wage garnishment:

• Unemployment income
• Social Security or Pension income
• Disability income
• Child support
• And in most states, net income

For more information about wage garnishment, visit: US DEPARTMENT OF LABOR.

If all of this is a little intimidating, you may need our help. We have been helping our clients settle accounts and avoid wage or bank garnishment for over 8 years and have the experience that you may need.

For a FREE, NO OBLIGATION review of your situation, click here.