Posts Tagged 'Debt'

What Happens to Debt After 7 Years?

Dec 08, 2010  Posted by Nicole Ortiz in Business And Financial News | | No Comments »

If you’re having a hard time paying off your debts, such as a credit card, you’re probably doing your research on when your credit card debt technically “resets.”  What you’re going to find out is that every state is different, when it comes down to this law, so let’s take a look.

The process of debt collection

When you don’t pay off a company after a period of time, you will find that they will sell off your debts to another collection agency.  Generally, this collection agency is going to be able to get your debt for pennies on the dollar.  Now, this is when you’re going to find that the harassment is going to start, and it won’t start until you either tell them to stop, or you pay the bill.

The first thing that you’re going to want to do is check your state’s statue of limitations.   Let’s say that you live in Missouri.  They stay that you are going to be held responsible for 8 years.  Now, if this collector comes after you 9 years later, they legally can’t do this.  As long as you can prove it, they will have to wipe this debt clean and never contact you again.  If they are within the statue of limitations, you will have to either pay your bills, or continue to get harassed.

Looking at debt after 7 years

Now, let’s say that you either paid off debt, or you’re still ignoring it.  Technically, after 7 years, this is going to disappear off your credit report.  For example, let’s say you had a medical bill that was past due for $500.  You end up paying it down the line, but you waited a long time.  Even when you pay it in full, you’re going to find out that you will have to wait 7 years to get this removed most of the time.

What happens if it is still on my report?

If you’re finding that your credit report debt is still on your report after 7 years, you’re going to find out that you’re going to want to write them a dispute letter.  You’re going to want to make sure that you not only have evidence on the issue, you will want to make sure that you know where to send the letter.    Read this post on how to write a dispute letter for more information.

As every state is different with their laws, you will find with your credit report, that most of the time, your debts should be removed after 7 years.  While this isn’t always the case, be sure to consult with the credit report agencies if you have any questions in regards to your report.

Tags: Debt Debt Years

Paying off Debt Collections 101

Nov 28, 2010  Posted by Nicole Ortiz in Business And Financial News | | No Comments »

If you ignore paying off some debts, you’re quickly going to find out that the company you were going to pay in the first place is more than likely going to hand it off to a third party.

Now, this is where the fun is going to start, where they are going to harass you by phone, e-mail and so much more.   Now, if you’re looking to just pay them in full, or maybe you want to send them a few bucks, there are some things that you should know first.

Call up and ask for a lower bill

Don’t pay in full just yet.  What you will want to do is call up, and ask them for their best offer.  Let’s say that you owe them $3,000.  Call them up, and say that you have $,500 in the bank.  Will you be willing to accept this, in exchange for a final payoff?  I usually start at 50-60% off, and what you will find is that most companies will accept.

Now, if the company accepts, make sure that you tell them to send you a bill with that final total, stating that this is the final payoff.  ALWAYS make sure that you get this in writing.  If you don’t, it could come back to haunt you.

You will also find out that you can send them a written request as well, if you don’t want to call them up.  What you can do with a letter is just write to them stating that you want to pay $xxxx instead of $xxxx.

Get the bill deleted

If you’re going to pay in full, make sure that you get the item deleted from your credit report.  Many people don’t know this, but they won’t cancel it off your credit report.  Make sure that you get them to delete the item off your credit report, so that it doesn’t hurt you in the future.

Keep in mind that most companies won’t need do this, but it doesn’t hurt to ask.  If they won’t remove it, get them to state that you have paid in full.  By doing this, it will show on your report that it has been paid in full, rather than nothing.

What if they don’t do this?

If they don’t remove, or state what they haven’t done, what you’re going to want to do is contact the credit bureaus.  Make sure that you save that proof, so that you can show them evidence on what the company was going to do for you.

Tags: Debt Debt Collections

When to Seek Help From Debt Consolidators

Sep 18, 2010  Posted by Nicole Ortiz in Business And Financial News | | No Comments »

Debt is a word we are all aware of.  It brings on many emotions like guilt, and depression and can be a huge annoyance.  Although debt is common among millions, credit card debt is one of the worst debts to have.  When we have credit card debt, we are most likely being charged an outrageous interest rate.  Meaning when we don’t pay off our balances in full each month, we are getting a bill that ends up being even higher than what we started with.

Once a person has gotten themselves into credit card debt, it is hard to get out.  It is easy to spend more than we make, and to keep racking up our cards and paying the minimum amount.  Although it may be easy, that is a step in the wrong direction.  To get out of debt a lot of people rely on the help of experts.  Experts can give you a plan, and helpful tips to get you on the path of becoming debt free.

One of these experts is a debt consolidator.  What a debt consolidator can do is combine all your debt into one.  So let’s say you have a mortgage, car payment, and 3 different credit cards with debt on them.  They will then combine all your debts, so that you only have to make one payment.  There are a lot of people that take this route. 

When to Seek Help From Debt Consolidators:

  • When you have a lot of debt.
  • When you have debt coming from many different things.
  • If you’re looking to make your payments easier.
  • If you need advice and tips on becoming debt free.
  • If you think that having someone in charge telling you want to do will make things easier for you.

Don’t be afraid to ask for help.  There are millions of people suffering from debt.  If you believe the only way out is with the help from an expert, be sure to consider it!

Tags: Debt Debt Consolidators

4 Things to Know About Credit Card Debt Forgiveness

Aug 04, 2010  Posted by Nicole Ortiz in Business And Financial News | | No Comments »

If you find yourself in a bind when it comes to credit card debt, you may find that you’re going to look at many options.  From haggling with the credit card companies to declaring bankruptcy.  While there are a lot of options, I can understand why it can be hard to choose one.

When it comes down to debt, there is so much information to absorb and while many of you may not have the time to sit back and learn it, you may have no choice but to head to a professional and that’s okay!

Whether a professional or yourself has learned a little bit about credit card debt forgiveness, I wanted to give you 4 things that you should know about it, before you think about attempting it.

You’re going to be taxed on it

When you settle with a credit card company by going this route, you’re going to find that the creditors are going to send you a 1099-C form.  Whatever debt that was canceled will be taxed.  For example, if you had $7,500 in debt and they settled on $4,000, you’re going to have a $3,500 difference.  That difference will be taxed.

You don’t pay taxes when declaring bankruptcy

If you decide that you want to declare bankruptcy, you’re not going to have to pay the bills off anyways.  Many people have the assumption that they will have to pay taxes on all unsettled debts.  This isn’t the case.   You will be excluded from the tax rule.  I would advise that you meet with a professional accountant if you ever have questions.

It will lower your credit score

If you decide that you want to settle for something less, the credit card companies will report this to your credit report.  It’s going to show that you have no more debt with that card, but it will also state that you settled for a lower amount.

Get everything in writing

While it is tempting to get yourself to pay a lower bill to settle, you will always want to make sure that you get everything in writing.  When you get things in writing, you’re going to find that you will have proof, if anything does happen down the road.

The most common error that you’re going to come across is the taxes at the end of the year.  Just make sure that you understand that you’re going to get taxed on the difference of what you settle for.  If you ever do have questions, be sure to refer to an accountant and/or lawyer that works with debt and bankruptcy.

Tags: Card Debt Credit Card Credit Card Debt Debt

Economic Outlook: Re-doubt on debt

Jul 17, 2010  Posted by Shannon Cox in Business News | | No Comments »

International markets were mixed Monday in Asia and Europe, as Moody’s Investors Service downgraded Ireland’s credit rating.

The influential rating service reignited concerns of debt burden’s in Europe, notching Ireland down from Aa2 to As1 and defining its rating as negative, as opposed to stable.

“Today’s downgrade is primarily reflected by the Irish government’s gradual but significant loss of financial strength, as reflected by its deteriorating debt affordability,” Moody’s credit officer Dietmar Hornung told The New York Times.

Despite the downgrade, the euro held its own against the U.S. dollar Monday, climbing from Friday’s $1.293 to $1.2968, the Times reported.

Some investors, apparently, are beginning to shrug off the fear that a growing list of European nations could default on their debt, which puts pressure on what is still called the euro experiment. Only 10 years old, the euro links Ireland’s economy, which contracted 7.1 percent in 2009, with economies in 15 other nations.

The euro has taken a beating this year, dropping 15 percent against the dollar, falling hardest since May, when debt in Greece became a public concern.


Full Post…

Tags: Debt

Debt Validation Letter: Key to the Process

May 13, 2010  Posted by Nicole Ortiz in Business And Financial News | | No Comments »

When people get into debt, they automatically assume that they are going to owe this debt.  What many people don’t realize is how many times a company will screw up each and every year when it comes down to someones debt.  What you’re going to find out is that the other side can often be wrong.

Before you start fighting off that debt, you should highly consider writing a debt validation letter.

Why should I write a debt validation letter?

First off, you’re going to want to make sure that they owe you cash.  What happens if you legally don’t owe them anything anymore?  Would you give someone money just for the sake of it?  No!  No one is going to do this.  Instead, I wanted to give you some strategies that you can use in order to ensure that you’re paying off the right debts.

Under the FDCPA, you’re allowed to validate your debt.  You should always get proof when a creditor / debt collector is going after you.

What happens if they can’t verify your debts?

If the creditor is not able to verify your debts, they legally can’t collect your debts, nor can they contact you anymore.  Also, on top of that, they can’t report that debt to the credit agencies.  Now, you should see why it’s important to validate it.

How can I start the debt validation process?

What you’re going to want to do is send the company a letter stating that you want to validate your debts.  Under your credit report, you may notice that some marks are popping up.  This is when you want to take action.  If you don’t take action, nothing is going to be resolved.

You may find validation letters here and here.

Next, you’re going to want to dispute this debt claim with the credit bureaus.  Be sure to look up the Statute of Limitations on the debt.  If that debt is past the SOL, you can state that the debt is too old to collect.

Generally, you’re going to have to wait 30 days to hear back from a collection agency.  After that 30 days, if you don’t hear back from them, you’re going to want to send out a letter once again.  Always make sure that your letter is certified.

The last step that you’re going to take if you find that it isn’t work is to take them to small claims court.

You’re going to want to do everything that it takes to get rid of this debt, as well as the mark on your credit report.  By doing so, not only is your score going to rise back up again, you’re not going to have to worry about harassing phone calls, or the thought of owing someone money that isn’t theirs.

Tags: Debt Debt Validation

What Are The Biggest Benefits Of Paying Down Credit Card Debt?

May 08, 2010  Posted by Nicole Ortiz in Business And Financial News | | No Comments »

One of the most important investments you can make for your future is to pay down your high interest credit card debt as quickly as possible.  Many experts agree that this is the best way to spend money that is not going towards immediate necessities and utility bills.  Paying down your high interest credit card debt is one of the best returns on your money that you can get because of the many benefits associated with the elimination of this expensive type of financial obligation.

Reduced Interest Payments

One of the most beneficial benefits of paying down your high interest credit card debt is the reduction in the amount of interest that you are paying to borrow the cost of the items you have placed on your credit card.  In most cases, credit card interest rates will be the highest interest rates that a person is paying over all of their financial obligations which means that the person is paying the credit card company more to borrow their money than they are paying any other source and getting virtually nothing in return because they still have to pay back the balance as well.

Credit card interest rates are applied to the total balance on the credit card, so having a lower balance means that you will be paying less in interest charges each month.  Paying less in interest means that if you continue paying the same amount each month, more of your money is going towards paying down the actual charges on the credit card, eventually leading to the credit card being paid off.

Lower Monthly Payments

The minimum payment required by the credit card agreement is based on a percentage of the total balance on the credit card, which means that as the balance on the credit card decreases the minimum payment due will decrease as well.  Although you should try your best to continue paying the same amount each month so that you can bring down the balance of the credit card faster, in the event that an unexpected financial issue occurs the credit card payment will not be as much of a burden on your finances and it will be easier for you to pay the minimum payment.

Increased Credit Score

One of the calculations that is used to compute your credit score is the percentage of your credit that you are using compared to the total amount of credit you have available.  The highest credit scores go to the people that are using less than 30% of their total available credit and each percentage point over this margin can result in a linear reduction in your credit score.  Keeping balances on your credit cards low results in a higher credit score which increased your chances of obtaining additional credit if needed and qualifies you for a lower interest rate on many different types of credit products.


Tags: Card Debt Credit Card Credit Card Debt Debt

7 Ways to Consolidate My Debt

Apr 29, 2010  Posted by Nicole Ortiz in Business And Financial News | | No Comments »

Credit: alancleaver (flickr)

So, you’re in debt?  You’re going to think that it’s the end of the world, but the good news is that it isn’t!  Like anything in life, you’re going to find that you can either hire a professional for twice the price, or you can do it on your own for next to nothing.

Trust me, it’s not that hard to learn how to consolidate your debts.  As long as you educate yourself, you can really start knocking away at your debt.  Always remember that it’s going to take money to get rid of your negative net worth.  There are no magic trees of formulas!

#1 Transfer your debts to one credit cards – What you can do is find a balance transfer credit card.  Let’s say that you have 5 cards.  To make things easier, you can transfer all those balances onto one card.  As long as your balances aren’t too high, you should be able to do this.

#2 Home equity loans - If you own a home, call up your bank and work up a home equity loan.  The economy may be on the up and up, but you can always see what they can do for you.

#3 Retirement funds - I wouldn’t really go this route, but if you need to dip into your retirement funds, you need to do the math.  If your money is only making you 2% and you have 18% interest rates on your credit card, it’s a no brainer to pull out your funds and pay off the cards.

#4 Your bank - If you don’t have a mortgage or any other loan, check with your local credit unions or banks.  Tell them what is going on and see if they can help you out.  Some banks may be able to, while others are going to simply turn you away.

#5 Call up the credit card companies - People don’t do this and I don’t know if they are afraid, or if they just don’t know.  Simply pick up the phone, call up the credit card company and ask them to lower your rate.  90% of the time, they will lower it, or offer you some deal!

#6 Ask friends and family - I know this is something that many of you don’t want to do this, but if you ask a friend or family member, see what they can do for you.  While some may be willing to help, let them know how you’re going to pay them back.  If you have to, write up a legal contract.

#7 Meet with a nonprofit – There are a lot of non-profit agencies around in your area.  You can speak with a church, or if you wish, you can find a non profit online.   These people are here to help, rather than get money out of your pockets.

As you can see, its really not that hard to consolidate your debts.  It’s going to take action on your part.  By taking action, you’re soon going to find that your debt is going to slowly dwindle away!

Tags: Consolidate Debt Debt
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