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!

Have you or someone you know been a victim of Credit Card Skimming?  Skimming is a method by which thieves steal your credit card information, and all it requires is a little technology and a lot of criminal intent by those who handle your credit card.

Unfortunately, this is becoming a bigger and bigger problem across the country. You need to understand how Credit Card Skimming works and what you can do to protect yourself.

Here's how it works

The bad guys buy magnetic card readers (readily available online) and attach them to legitimate card readers at ATM machines, gas station pumps, movie rental kiosks, or anywhere they think they can get away with it.

The counterfeit card reader captures the credit card information of everyone who uses the machine. (On ATM machines, crooks also attach tiny video cameras to steal PIN numbers.)

They then remove the phony device and use the stored information to buy stuff online or write the data onto new magnetic strips to make counterfeit credit cards or ATM cards.

Counterfeit Credit Card Trends

Portable skimmers (small enough to fit in a palm) can be used by anyone who handles your credit card, such as a waiter. All they have to do is get your card out of your sight for a second. That's enough time to swipe it through the device, and steal your information without you suspecting a thing.

Follow these tips to protect yourself from Credit Card Skimming:

• Don't let your credit card out of sight. Watch carefully anyone who handles your card.

• Keep track of receipts and check your credit card statements regularly to make sure you authorized all purchases.

• Report any unauthorized purchases immediately to your credit card companies.

• Don't use a credit card reader if there are any signs of tampering. Don't swipe your card through devices that offer to clean the magnetic strip. Those are scams designed to capture your credit card information.

Have you been a victim of Credit Card Skimming? 

• Call the police. When your identity or credit card is stolen, it's just like having a car stolen. Make a police report and hang on to the police report number.
• Contact your bank or credit card issuer immediately and tell them your card was stolen. If you don't make a report quickly, you may be liable for some or all of the unauthorized charges.
• If you report swiftly, federal law caps your liability at $50. Most credit cards voluntarily go further, and won't charge you at all -- again, if you report quickly. "If you end up being a victim, it's probably not going to cost you any money," Brewer says. "If you notify your bank quickly, they'll return the money. Don't get hung up about the fact that someone might drain your bank account. The most you will probably spend on it is wasted time and lots of aggravation, since it can be a long process to get everything worked out."
• Contact the three major credit bureaus -- TransUnion, Equifax and Experian -- to request a security freeze, which prevents new credit authorizations without your consent. Brewer suggests visiting the website www.annualcreditreport.com. "It's an institution created in response to a large number of identity theft victims and the cost incurred to them," Brewer says. Through the site, which was mandated by federal law in response to consumer outcry, you are entitled to receive one free credit report each year from each of the three major credit bureaus.

Need help eliminating your credit card debt?

Our Debt Consolidation and Debt Settlement programs can get you out of debt fast and save you money.  Give us a call, or click on the link below to get your FREE Debt Elimination Summary or talk to one of our Debt Solutions Specialists today!

photo by: akpoff

People are always asking...

"Does Debt Settlement hurt your credit score?"

Although this is a simple question, the answer is not as simple.

According to the Fair Issac Corporation (FICO), there are several factors that go into determining your credit score:

• Payment History....................35%
• Amounts you owe.................30%
• Length of Credit History.......15%
• Types of Credit......................10%
• New Credit..............................10%

As you can see, 65% of your credit scores seems to depend on your Payment History and How Much You Owe.  In reality, there are several other factors that go into determining your credit score. 

                                     For example, FICO says:

Your FICO credit score is calculated based on these five categories. For some groups, the importance of these categories may vary; for example, people who have not been using credit long will be factored differently than those with a longer credit history.

The importance of any one factor in your credit score calculation depends on the overall information in your credit report. For some people, one factor may have a larger impact that it would for someone with a much different credit history. In addition, as the information in your credit report changes, so does the importance of any factor in determining your FICO^® Score.

Therefore, it’s impossible to measure the exact impact of a single factor in how your credit score is calculated without looking at your entire report. Even the levels of importance shown in the FICO Score chart are for the general population, and will be different for different credit profiles.

If you are considering a Debt Settlement Program, let's assume that you have several unsecured debts and are behind or starting to fall behind on your monthly payments due to anyone of several circumstances.

And, if this the case, you can see from the information above that your credit score has already been affected.

Enrolling in a Debt Settlement Program and finally getting your delinquent account balances to ZERO will ultimately IMPROVE your credit score.

If you decide (or have no choice) but to file for BANKRUPTCY PROTECTION, then your creditors receive little to nothing.

But, once a settlement agreement has been negotiated and the agreement has been completed, your credit report will show a $0 BALANCE and state something like "paid-as-agreed" or "paid-as-agreed for less than the balance due".

In either case, once all of your debts have been settled and you have not charged up more credit, your credit score will begin to improve!

The WORST THING YOU CAN DO IS NOTHING! 

Debt Settlement may help you finally get back on the right track and avoid bankruptcy.

If you would like a FREE CONSULTATION with NO OBLIGATION, CLICK HERE.

If you are considering filing for bankruptcy, you may be wondering…

How does filing bankruptcy affect my credit?

That is a great questions, and one that we get asked all the time.  The simple answer is, filing bankruptcy will significantly impact your credit score.  However, the question is not really that simple to answer.  If your credit score is high, a bankruptcy will drastically lower it.  On the other hand, if your credit score is already low due to late payment and large unpaid debts, bankruptcy may have a slight negative effect, but the benefits may outweigh the cost.

What to expect when you file for bankruptcy

1.   Bankruptcy will stay on your credit report for a long time.

If you decide to file, you will likely file a Chapter 7 or Chapter 13 bankruptcy. A Chapter 7, which essentially wipes the slate clean and eliminates all of your debt, will remain on your credit report and potentially affect your credit rating for 10 years; a Chapter 13 will remain for seven years.

2.   Bankruptcy will lower your credit score

Once you file for bankruptcy, you may see your credit rating drop anywhere from 80 to 220 points.  I know that is a big range, but as I explained before, bankruptcy does not affect everyone the same. The higher your score is before the bankruptcy, the more points you will lose.

Another surprising fact is that, your credit score is not only affected by what you do.  When determining your credit score, your information will be compared against others who have filed for bankruptcy.  It’s crazy but true!

If you don’t know what your credit score is, you can check it for free at www.creditkarma.com

3.   You will be stuck with some of your debt

Even if you file a Chapter 7 bankruptcy, some debts are still protected.  Except in extreme circumstances, you will still be required to pay student loans, child support, and tax debt. If you are behind on these payments, your credit rating may drop an additional 70 to 120 points.

4.   You can improve your credit score

Within a year or two, you may be able to get your credit rating above 700. Paying all bills on time will greatly help to improve your score. Another suggestion is to use a secured credit card to build your credit.  Apply for a secured credit card, use it regularly and pay off the balance each month.  This will add positive marks to your credit report to start balancing out the negative. 

The bottom line is, bankruptcy should only be used as a last resort.  If you are overwhelmed with debt, there are programs out there to help you such as Debt Consolidation and Debt Settlement.  Both of these options will help you get out of debt fast and save you money in the long run. 

If you have questions about whether bankruptcy is the right choice for you, give us a call at 1-877-492-4109 or click on the link below for a FREE CONSULTATION with one of our Debt Solutions Specialist. 

Money doesn't grow on trees!  You work hard every day to bring home your pay check and support your family, so it can be devastating when your creditors can come and "PICK" your hard earned wages.

It is sometimes possible to stop a wage garnishment, but it is better to PREVENT a wage garnishment!

How can you PREVENT WAGE GARNISHMENT?

Once you have fallen behind in paying on your credit or store cards, medical bills, personal line of credit, private student loan and any other UNSECURED debt, your creditors will start to call.

Once they have made repeated collection calls and sent you numerous collection letters, your creditors will start to threaten all sorts of things including "Pursuing Legal Action".

BE PRO-ACTIVE

I know that it is scary, and it would be much easier to bury your head in the sand and ignor the creditors.  But, if you do, you may end up in a hole that you can't is too deep to get our of!  You need to be PRO-ACTIVE and CONTACT YOUR CREDITOR(S) IN WRITING stating that you cannot make payments at this time and plan on repaying this bill when you can.

This will not stop their collection efforts, but it will help slow down their options for filing a claim for the debt.  When you owe a debt, the creditor has the right to collect of course. However, they are supposed to do so within the laws stated in the Fair Debt Collection Practices Act (FDCPA).  Many unscrupulous collections agencies will ignore these laws, so it's extremely important that you KNOW YOUR RIGHTS, and stand up for your self throughout this process.  (Read More: "Know Your Rights When Dealing With Debt Collectors")

CREATE A CRISIS BUDGET

A CRISIS BUDGET is a short term budgeting tool that you can use when you have an unexpected income reduction or need to free up some money in your existing budget for an emergency.  I would say that this qualifies as an emergency! 

Take a close look at your budget, if you have one, and see how closely it matches to your ACTUAL SPENDING.  Most people create an ideal budget, but in reality their spending habits are significantly different. 

Once you have a clear picture or where your money is really going each month, look for areas of general improvement first.  Could you start making coffee at home a few days a week, or start bringing your lunch and eating out at work only once per week?  How about carpooling to work to save money on gas? These are goals that are realistic over the long run, but will usually not make enough difference in a state of crisis. 

Next, identify any areas in your budget that can be reduced for the next 6-12 months.  Can you live with basic cable instead of the premium cable TV package?    Is it possible to defer your student loan payments for a while?  Try calling your utility companies and see if they have a temporary hardship program.  Get creative.  After all, this is a CRISIS BUDGET.  You won't have to stick to it forever.

CALL YOUR CREDITORS

Now that you have re-evaluated your budget and freed up some money, you know what you have to work with.  This gives you power when you contact your collection agencies. 

The collector may accept a SETTLEMENT OFFER for less than you owe, or they may let you repay the debt over several months at a reduced interest rate.

Be strong, and stick to what you can actually pay.  Your creditors want your payments coming in each month.  They make money when they get to charge you interest, so it makes sense for them to work something out with you.  There is no point in working out a SETTLEMENT or REPAYMENT PLAN that you cannot pay!

• If you have delinquent debts, BE PROACTIVE! Don't just ignore the calls and letters.
• Create a CRISIS BUDGET that you can stick to while you are repaying your debt!
  
• Try to work out a SETTLEMENT AGREEMENT or a REPAYMENT PLAN with the creditor or collection agency, and make sure that the payments fit into your crisis budget!
  

If all of this sounds like "TOO MUCH", then give us a call.  We have been helping people settle debts and prevent wage garnishment for 10 years.

WE CAN HELP YOU TOO!

As the Director of Settlement Services at Debt Relief, I am often asked...

"Is Debt Settlement better than bankruptcy?" 

I wish that this was a simple answer, but the correct answer is that is all depends.

In this case I am talking about unsecured debt such as:

• Credit Cards
• Unsecured Personal Loans
• Store Card Accounts
• Medical Bills

Your Options

When Unsecured Debt gets OUT OF CONTROL and you CANNOT AFFORD to continue making monthly payments, what are you options?

1.  In rare cases, you may be able to secure a 2nd mortgage or Equity Line of Credit to use to pay off all of your accounts.

While many feel like this is unwise, it may be to your advantage to combine or consolidate all of your high interest accounts into one loan that usually has a much smaller interest rate.

Of course, the danger is that if you default on this loan, your home could be in jeapordy!

Also, if your home is foreclosed on, the 2nd mortgage and/or equity line of credit may not be dismissed!

2.  If you qualify, a DEBT MANAGEMENT PROGRAM may be a good option. In a Debt Management Program, your creditors usually agree to lower your interest rate and take a fixed payment for approximately 48 months depending on the account.

Often a common missconception, A Debt Management Program is not a factor in determining your credit score.

The problem with a Debt Management Program is that, many times, the total payment may not be less (and is some cases more) than your current total monthly payments!

3.  DEBT SETTLEMENT is an option that you should consider if you cannot quailfy for or cannot afford the payment of a Debt Management Program and do not have or cannot qualify for a 2nd mortgage or equity line of credit.

In a Debt Settlement Program, your accounts will become delinquent and in most cases charged off by the original creditor and placed with a debt collector.  Once your reserve account has sufficient funds, a settlement of 50% or less can be negotiated and the debt is now classified as "settled-as-agreed".

Even though your credit report will show late payments, eventually all of your accounts will show a  ZERO BALANCE! At this point, your credit score will start to IMPROVE!

Many clients have enrolled in our Debt Settlement Program with $25,000, $50,000 or in some cases over $100,000 of combined unsecured credit and have completed the program, becoming totally DEBT FREE and saving 50% or more!

• If you have no access to home equity or cannot qualify for a consolidation loan...
• If you cannot afford the total monthly payment of a Debt Management Program...
• If you cannot afford a reasonable monthly amount for a Debt Settlement Program...

4. ...then BANKRUPTCY may be you only option.

Bankruptcy is a very serious decision and should only be considered after investigating ALL OF YOUR OPTIONS. However, qualifying for a Chapter 7 bankruptcy is not an option for most people after the Bankruptcy laws changed on 2005.

Most people will only qualify for a Chapter 13 bankruptcy and will pay into a plan for up to 5 years before their debts are discharged.

You may have heard that Debt Settlement Programa charge huge fees! While the debt settlement company will and should earn a fee, recent legislation has gone a long way in stopping bad debt settlement companies.

You should always check out a Debt Settlement Company (or any company) at the Better Business Bureau.

With a Chapter 13 bankruptcy, your creditors will get pennies-on-the-dollar and your bankruptcy attorney will earn a fee. This is usually calculated in the monthly payment you will be making to your bankruptcy court.

So, is Debt Settlement or Bankruptcy the best option for you?

Our Debt Solutions Specialist can help you determine which option is the best choice for your situation.  If you would like a FREE CONSULTATION WITH NO OBLIGATION to explore your options based on your particular circumstances, give us a call at 1-877-492-4109 or click on the link below!

When you contact the Debt Settlement Company (DSC), do you fee like they are more interested in getting you to sign up or do they take the time to do a complete analysis of your particular financial situation?  If so, be careful.  Read on to learn what to look for in the Best Debt Settlement Companies.

#1  The best debt settlement companies want to know several things about you and the debt you have incurred such as:

• What type of debt do you have?
• Is is secured or unsecured?
• How did you get too much debt or behind on your debt?
• Are you employed?
• What is your monthly budget?  In other words, how much to do bring home and how much do you pay out each month. VERY IMPORTANT!

• If you are retired, is your retirement income (pension, retirement fund, social security) deposited seperately and NOT CO-MINGLED with other income you might earn from another job.  This is critically important!

Click HERE for a FREE Debt Settlement Consultation!

#2 The best debt settlement companies will assign you a counselor or account representative that you can always contact with any question or concerns.

If you feel like you are getting "shuffled from one person to another", be wary!

#3 The best debt settlement companies charge fees that are consistent with the industry and comply with their particular states laws or guidelines.

#4 The best debt settlement companies will rate very high with their local Better Business Bureau (BBB). 

It is not necessary for them to be accredited with the BBB, but make sure to check out any complaints or issues this company may have had.  The best debt settlement companies should have an A  rating or higher!

Got to --> the Better Business Bureau

#5 Finally, the best debt settlement companies will follow through with you after you have requested information and or a financial analysis.  If you have to call them back or feel like they are "too busy" to help you,...keep looking!

If you have old credit card debt, you may be wondering how long a collector has to collect.

There was an interesting article in our local newspaper "The Oregonian" today, 4.2.12 entitled "More time for debt collectors".

Seems that three people sued the credit card/debt collectors (specifically Daniel N. Gordon, an attorney in Eugene that specializes in debt collection) that the creditors could not sue after 3 years because the statute of limitations was only 3 years in the state of Delaware (the state where the credit card company lists as the home office).

The Oregon Court of Appeals ruled that a creditor can have as long as the individual's state's statutes of limitation to attempt to collect a debt.

In Oregon and Washington, the statute of limitations is 6 years.

What does that mean to you?

If you have old credit card accounts that you have not paid on for over 6 years you have a couple of rights that you need to know:

If you see that debt (longer than 6 years) on your credit report, you can request that it be removed as the statutes of limitations has expired.

The credit reporting agency (usually Experian, Equifax or TransUnion) will investigate and if you are correct, remove the item.

In some listings on a credit report, you will see a notation of when this account is scheduled to be removed due to the statute of limitations being exceeded.

It is important for you to know what the statute of limitations is for your state.  You can find a listing (although you should double check on line at your State's official site) at:

                              LISTING OF STATE'S STATUTES OF LIMITATIONS

Another reason it is important for you to know your rights is if a collector sues by filing a claim in the county court of your residency, you can dispute the claim if the statute of limiations has expired (for your state of residency).

WARNING!

You need to be aware of the term "re-aging" debt.  If a collector calls and you agree to make a small payment to stop further action, etc., the statute of limitations clock is reset and basically starts over!

Therefore, if you have old debt, is is NOT WISE to talk with a collector or to make any acknowledgment of the debt.

According to the Fair Debt Collection Practice Act (FDCPA), if you make a request in writing to the collector, they must stop calling you at home or at work.

In making the request, DO NOT ACKNOWLEDGE THE DEBT!

State that you dispute the validity of the debt and that you are not responsible.

Demand that they cease from calling you at work and home or that you will report them to your state's Attorney General's office.

If you would like help, here's a link that will show you HOW TO STOP COLLECTION CALLS.

If you want to resolve an old debt rather than risk legal action from collectors, you should consider a Debt Settlement Program, where you may be able to settle the debt at 50% or less and have it removed from your credit report!

For more information, click the link below for a FREE CONSULTATION!

Contrary to Michael Scott's opinion, you can't declare bankruptcy by simply saying it in public!

But that is not the only Bankruptcy Myth that is going around.  It is important to know which Bankruptcy Myths are true and which ones are just plain silly!  Here are 4 common myths that are absolutely NOT TURE!

Myth #1: You Can Only File Bankruptcy Once

You CAN file bankruptcy more than once. In fact:

• You can receive a discharge from a Chapter 7 Bankruptcy once every 8 years

• You can receive a discharge from a Chapter 13 Bankruptcy every 2 years

Also, if you complete a chapter 7, you must wait 6 years before filing a chapter 13. And if you complete a chapter 13, you must wait 4 years to obtain a chapter 7 discharge. 

Myth #2: A Bankruptcy Hurts Your Spouse

If you’re married, filing bankruptcy doesn’t affect your spouse’s credit. However, if you’re struggling to pay debt that’s in both of your names, then you should file bankruptcy together. Otherwise, creditors will simply demand payment for the entire amount from the non-filing spouse.

Myth #3: You Can Go to Jail if you Don't Pay Your Debts

No matter what anyone says—especially an aggressive debt collector—it’s not against the law to owe money. There is no such thing as debtor’s prison in the United States. 

Creditors can sue you, take you to court, lien your property, and garnish your wages, but they can’t send you to jail. You can only be arrested if you commit a crime, like fraud, hiding property to avoid a judgment, or refusing to pay income tax.

Myth #4: Bankruptcy is Expensive

The filing fees for chapter 7 and 13 bankruptcies vary, but aren’t more than $300. The real expense is hiring an attorney, which could range from $2,000 to $4,000, depending on the firm and the type of bankruptcy you choose. You can file bankruptcy without an attorney, but I don’t recommend it. A less expensive option is to hire a bankruptcy paralegal.  They can do everything an attorney can do, but usually charge much less!

While bankruptcy may be inevitable for you, there are other options that can help you to eliminate your debt without filing bankruptcy.  Debt Consolidation and Debt Settlement are some of the choices you have when you are struggling to pay your debt.  For more information, click on the link below or ask a question in the comments section at the end of this post!

Follow this 5 step plan to make your personal finances healthier and build a better Financial Future for you and your family.

Step #1: Set Your Money Goals

In this first step, it is tim to sit down and really think about where you want to be financially in the future.  Think about the following questions to get you started on setting your money goals:

• What part of your financial life was disappointing last year and what can you change so it is better next year?
• What part of you financial life worries causes you the me the most stress, and what safety nets can you put in place to help relieve this stress?
• What would you be proud to accomplish in the next 5 years of you financial life?

Step #2: Check Your Credit Report

Your credit report plays a huge role in your personal finances and financial future.  Each year you can pull your credit report for free from each of the three major credit reporting bureaus.  Simply go to AnnualCreditReport.com to get your Free Credit Report. 

Instead of pulling all three reprots at once, try spreading them throughout the year.  For example, pull your Equifax credit report today, then mark your calendar to pull your Experian credit report in 4 months and your Trans Union credit report in 8 months.  By doing this you will be keeping a close eye on your credit without breaking the bank!

If you want to check your credit score for free, go to CreditKarma.com

Setp #3: Research your Debt Elimination Options

If you have credit card debt, retail store cards, medical bills or other unsecured debts, you have several options available to you to help eliminate that debt once and for all while saving you time and money.

• If you plan to pay off your debt on your own, consider adjusting how you make your payments.  The Debt Snowball is a popular method to help you pay down your debts fast. 
• If you are able to keep up with your payments, but your high interest rates are keeping you from eliminating your debt, a Debt Consolidation Program may be a great option for you. 
• If you are struggling to keep up with your minimum payments or you have already fallen behind, you should consider enrolling in a Debt Settlement Program which can reduce your monthy payments and eliminate your debt for much less than what you owe!

Step #4: Create a Budget

If you are like so many others out there living paycheck to paycheck, creating a budget can help you to start saving for your retirement and start building an emergency fund.

Start by writing down everything you spend for an entire month.  Once you have done this, take a look at how you’ve been spending your money, and see where you can cut back in order to put some money into savings or pay down your debt.

Step #5: Set up Automatic Retirement Contributions

Participating in a retirement plan at work is a great way to make sure you’re consistently investing for your future. If you don’t have a workplace plan you can invest in an IRA as long as you have some amount of earned income.

Set up a direct deposit so a percentage of your paycheck is automatically invested in your IRA. Or set up an automatic transfer from your bank account to your IRA once a month or every payday. Automating your financial goals is the best way to make sure you accomplish them.