Posts Tagged ‘credit card debt’

Can I Keep A Credit Card When I File For Bankruptcy?

September 12th, 2010

The bankruptcy law is designed with the purpose of giving an honest debtor a financial fresh start by discharging his debts.

So, if you are filing bankruptcy, why would you want to hold on to one of your credit cards?

I think the question is rooted in the fear many people have that, without access to a credit card, “What will I do in case of an emergency?” I remember when I was an impressionable, naive, 18 year old freshman in college, I asked my parents if it would be a good idea to get a credit card. After all, It came with a free t-shirt! They said “Sure, you can use it for emergencies”. Well, I found that there were plenty of situations, that, in my mind, qualified as an emergency, and therefore would allow me to employ the services of the trusty credit card.

While my “emergencies” may not have qualified, there is no question there are real emergencies in life, and it is always good to have a backup plan to get you through those dilemmas. However, wouldn’t it be satisfying, if, instead of relying on that credit card to bail you out, to be able to do it yourself? This is returns us to the financial fresh start intended by the bankruptcy law. Once you have liberated yourself from the burden of your debts, you can concentrate on building your savings. After filing bankruptcy, take that $100/month you were devoting to credit card payments and pay it to your savings account instead. Now you can apply yourself to rebuilding your credit without the worry of getting caught in the same trap.

Within a surprisingly short amount of time, you can create an impressive emergency fund. Get a flat tire? You’re covered. Tooth starts aching and need to run to the dentist? No need to pay for that trip to the dentist for a year after your tooth is fixed if you have an emergency fund available to cover the cost.

Filing bankruptcy requires that the Debtor list all of his or her creditors in the bankruptcy petition. This is something I advise all of my clients to do, and that everyone who files for Chapter 7 or Chapter 13 declares under penalty of perjury has been done. I’m not as naive as I was in college, so I know that not all of my clients listen to my advice and adhere to it.

I know, for example, that some clients have tried to keep a credit card out of their bankruptcy in the hopes that they could use it. Problem is, even if you don’t list a credit card in your bankruptcy petition, your creditors will know you’ve filed (they subscribe to services that flag accounts of their customers who file for bankruptcy) and they will deactivate the account. Then, you’ve got no credit card and no disclosure of the debt in your bankruptcy. Not good.

Why not take control of your financial life by rethinking the notion that you need a credit card to help you out in an emergency and depend instead on your own emergency fund that will don’t have to get into debt to have access to.

Learn more about bankruptcy. Stop by K. Hunter Goff’s site where you can find out all about this bankruptcy lawyer and what he can do for you.


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What Happens If I Stop Paying Credit Card Debt?

September 1st, 2010

As an Orlando bankruptcy lawyer, one of the first things I advise my clients to do when they decide they are filing bankruptcy and hire me is to stop paying on their credit cards. Recently, though, before I could offer that advice, a client asked me: “What happens when I stop paying my credit cards?”

The answer? Your credit card company will begin the collection process, which normally proceeds in this manner:

1. You will receive frequent phone calls from the original creditor, as will your family and your employer, attempting to convince you to make a payment over the phone. The collection agent will try to intimidate you, by saying they will ruin your financial life unless you pay up.

2. In about 90 days, your original creditor will give up and sell your account to a debt collector. This third party agency will then repeat the actions above.

3. Then, around 180 days from the time you stop making payments, you may hear from an attorney. This attorney will simply try to collect on the debt, following the same protocol in 1 and 2 above.

4. At this point, the attorney might file a lawsuit, seeking a judgment against you. A judgment would permit the creditor to collect from you through a wage garnishment. Your wages cannot be garnished without a judgment.

Kind of a long process until a judgment is obtained, right? Over 6 months from the time payments stopped being made if I added correctly. So why, as a bankruptcy lawyer, do I advise my clients to stop paying on credit cards when they hire me?

You see, the objective is for my client’s bankruptcy to be filed well prior to a judgment being entered against them. As long as no judgment is entered, garnishment is not possible. Now, my client can catch up on car or house payments, for those secured debts they intend to keep through filing bankruptcy. They are not wasting that money on payments to malicious debt collectors, for credit card debts that will be discharged in their bankruptcy. They can also use the money they have saved to create that safety net, which I advocate as their Orlando bankruptcy lawyer, to be used as part of an overall, start fresh, strategy when filing for bankruptcy.

But what about those malicious debt collection agents? Here in Florida, we have some of the toughest laws in the country to protect consumers from the abuses collectors use regularly when attempting to get my clients to pay their credit card debts. Additionally, a Federal Law also restricts those abusive acts by third party collection agents in an attempt to collect on a debt. Why not sue your creditors to enforce your rights?

The debt collection process can be an intimidating experience, or an empowering one. If you know how it works and you know your rights, the empty threats the debt collectors hurl at you in a typical phone call from them will seem laughable, and more often than not, actionable.

Get the Free eCourse to find out how an experienced bankruptcy lawyer to assist you in successfully navigating the debt collection process and help you achieve that fresh start you’ve been craving.


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Settlement Credit Card Debt For Do-It-Yourselfers

July 21st, 2010

Settlement credit card financial debt negotiation may be the cure for your overwhelming financial debt dilemma. If your credit card debt is for probably the most portion unsecured, it could be negotiated and settled.

You may be pressured to take out a dwelling equity loan to pay down your credit card credit debt. Don’t do it. The charge card debts is unsecured and utilizing residence equity creates secured credit debt.

You will probably find that the credit card company will not negotiate with you as long as your payments are current. Unfortunately, you will probably need to stop making payments in order to get their attention. It should not be that way but that is the way the system works.

Six months from your last payment, the debt becomes worthless on the books of the credit card company. A window will open up around the fourth month when you may be able to negotiate a lump sum or payment schedule with the creditor.

The card company will probably make an offer that seems entirely unreasonable. They are unreasonable for the most part. Your offer must be something that you can actually afford to pay. Never give them your checking account number or allow a draft to be made from your account. Too many unscrupulous creditors then try to take out multiple payments or as much as they can from your account.

In addition, you must be sure that the settlement is confirmed in writing. There are forms available that you can use. One of the primary goals that you must have is to have the payment of the debt reported as “paid as agreed”.

If you were not comfortable negotiating or need advice concerning settlement credit card debt negotiation, call upon an experienced adviser to get advice. Be very careful in using credit card debt settlement negotiators and make sure that you thoroughly check out the background of the company, particularly with the private debt settlement non-attorney negotiators.

You are not alone in facing stress from credit card debt. You can settle debt on your own or use a negotiator to get credit debt relief. Find out the five things you must know about settlement credit card debt at http://jamesmontgomerylaw.com/credit-card-debt-settlement.


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Credit Card Debt Solutions

May 14th, 2010

Many families throughout the world are finding themselves in situations where they need to find a way to get through financially. Credit card debt is a massive problem for many individuals and families as it is becoming easier to obtain more credit. Many people are finding themselves having to look for credit card debt solutions options.

How to get rid of Credit card debt

The initial step in any credit card debt relief situation is always to sit down and create a budget based on all sources of income and outlining all expenses no matter how frivolous. The budget will show that an official credit card debt solutions option might not be necessary if the family or person is able to cut out some of the less than essential expenses each week or month and increase credit card payments.

Budgeting will show what the person can afford to pay on their credit card each month and will also show a path to eliminating credit debt. Credit card debt relief can be achieved simply by taking steps to eliminate credit debt. Increasing monthly repayments to credit cards will hasten the elimination of credit debt.

It would also be advisable to stop using the credit card in order to eliminate credit card debt. Either put the card in a drawer or cut it up so as to take away the temptation of using it.

How to Reduce Credit card debt

Reducing credit card debt is a way of implementing a credit card debt solutions situation. It may be simplified in many ways. One way of reducing credit debt is to increase the amount of monthly payments. Another is to merge all your credit cards into one card so that monthly bills are reduced and so that you are able to focus on one payment rather than in addition to that.

Using consolidation as a way of credit card debt relief makes the overall monthly payment is lower than making separate payments. It also means that the credit card holder is able to pay the total of what they used to pay on all of their credit cards onto the one, thus reducing their credit debt faster.

Credit debt Solution

Credit card debt solutions is made easier by the solutions available through banks and debt relief organizations. Because an official credit card debt solutions solution will appear on a credit rating check, it is perhaps better for you to go through all other possibilities first.

As an initial solution, consolidate debt and implement a budget. If you’re still struggling, talk to the bank about reducing the monthly payments. Ask them about a payment plan that you can afford so that you can reduce the amount of debt you are in.

Credit card debt relief doesn’t have to mean going through an agency, but if it does, it has the potential to sort your credit card debt out in a simplified way. Credit card debt solutions will reduce the amount of stress being suffered and through the process you are likely to learn better ways of sorting out your finances.

To people who are searching for a debt consolidation solution , our website offers a huge number of suggestions on debt consolidation loans


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Three Questions about Credit Card Debt Court Summonses

March 29th, 2010

How do I reply to a court summons for credit card debt?

Your response only requires 2-3 pages. Answer the specific items in the complaint (with a denial) and then give your defenses. Remember: if something is not specifically denied, it is admitted by default.

The answer needs to be worded and formatted in compliance with the local court’s rules of civil procedure. The rules will dictate that you send your answer to the court and the plaintiff probably within 20 days of your receipt of the summons to avoid a default under those rules. According to the Credit Card Debt Survival Guide, it is important to send the reply certified return receipt requested to prove compliance.

What is a good defense?

They are several good defenses. One makes the plaintiff prove there is a contract for the alleged debt, another makes them prove the amount they say is owed, and a third makes they prove they actually own the debt.

The plaintiff must prove and document your ownership of the debt. You do not have to admit to the debt in court.

Local attorneys I have spoken with want a large retainer to take my case. How can I find help?

A local attorney does not know how much time your case will take him. So, he asks for a large retainer to handle the complete matter.

Just reviewing an answer to a summons is another matter. That is a basic legal task. It can be done in an hour or less, if you specifically request only that. Also, if you have low income you could be eligible for legal aid.

Remember, debt collection attorneys do not want to litigate with a consumer who actually responds to their summons. They want the easy money in non-answer defaulters.

This content is not intended as a substitute for legal advice. If you need an attorney in your local area, please contact a licensed attorney in your state.

If you want to eliminate credit card debt, read about proven strategies for settling debts and handling debt collectors as well as collection attorneys in the Credit Card Debt Survival Guide. www.credit-card-debt-survival.com


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You Can Eliminate Credit Card Debt by Stopping a Junk Debt Buyer’s Attempt to Collect It from You.

January 24th, 2010

A consumer with knowledge of existing consumer protection laws can stop a junk debt buyer’s credit card debt collection attempts eliminate a credit card debt claimed to be owed.

Junk debt buyers are investors who purchase large blocks of written off credit card debt. These purchases are typically for about 10 cents per dollar of debt with each purchase totaling in the millions of dollars. Junk debt buyers repackage and resell this debt to each other for smaller and smaller sums, sometimes less than once cent per dollar of debt. In an illustration of this reported by Business Week, Portfolio Recovery Associates, a large national junk debt buyer, over an 11 year period paid $791.6 million for $35.3 billion of debt in 16.7 million customer accounts. That was less than an average of three cents per dollar of credit card debt.

Based on those fractions, according to the Credit Card Debt Survival Guide, junk debt buyers do not have to collect on a majority of those debts. If they collected on just less than half, they would be hugely profitable.

A general lack of consumer knowledge of the federal Fair Debt Collection Practices Act (FDCPA) gives junk debt buyers confidence in their ability to collect on these cheap debts. Junk debt buyers through their collection agencies mail tens of thousands of collection letters to consumers holding discharged credit card debt. Most addressees do not properly answer this initial communication in writing asking for documentation of the debt. If a consumer knew this batched debt comes on computer tape in groupings of thousands, sometimes millions, of accounts with little or no original documentation, they might respond more confidently.

Even worse, when contacted by telephone and threatened with a bogus lawsuit, many consumers out of honesty admit to the undocumented debt, making the debt collector’s job easy.

Junk debt buyers’ and their collection agents’ debt collection efforts, unlike the original credit-card-bank creditors, are covered by the FDCPA. With a properly crafted written response to eliminate credit card debt, like the ones that can be found in the Credit Card Debt Survival Guide, these debt owners and collectors must stop their collection activities including no negative marks on a consumer’s credit report.

Matt Highlander researched the Credit Card Debt Survival Guide. Learn about debt settlement and legal nonpayment strategies to eliminate credit card debt. Matt Highlander is a contributing writer. www.credit-card-debt-survival.com


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Trying To Fix Credit Card Problems

December 1st, 2009

A credit card can either be a hassle or a blessing depending on the way you deal with it. Credit card problems have been known to pop up when you least expect it. Having a credit card means that you are liable for any purchases made and you have to pay for of the purchases. If you add an authorized user to your card you will also be responsible for paying for their purchases too.

The credit card holder is the person that these companies come after for their payments. The credit card holder credit report will have the remaining balance and any payment history recorded to it. When credit card payments are made on schedule there are no problems because this will actually raise your credit score.

If for some reason you are not able to make your payment on time this can cause you problems. The credit card holders credit score can be affected by the missed or late payments. If you need a high credit rating to purchase something you may find that you are not able to do so because of late or missed payments.

Another problem is lost or stolen credit cards. You may not know if your card has been stolen or lost and so you cannot report it, this will leave you liable for the charges. When you have two or more credit cards you may want to make a list of all of them. If you have too many credit cards you may not even realize when one is gone.

Identity theft and credit card fraud are a big problem in our country right now. This can also cause you problems with a credit card. It is very important that you protect your credit cards, account numbers, and any other personal information. Receipts will sometimes have a portion or the whole credit card number printed on it. Be sure to keep all receipts until you can dispose of them properly.

If someone steals your identity or opens a credit card with your information it can take you a long time to convince these companies that you did not make the purchases they are trying to charge you for. The best way to handle this is to avoid it completely.

There are some companies that even offer service to watch for identity theft for you. You make small monthly payments to the company and they keep track of purchases made in your name. They will let you know if they think someone is using your name or credit cards. This will catch the problem before you are left owing thousands of dollars and spending weeks trying to straighten it out.

Review your statements for your credit cards every month. Even credit card companies can make mistakes. Checking your statement will tell you if there are charges you did not make on the statement. If you are able to catch the problem when it first starts, you will be able to fix the problem faster.

During the time that you have credit card problems you need to fix them fast. There are ways to handle this problem that will take the weight from your shoulders. Find out how at http://justicedebtrelief.com.


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Arriving At The Need For Credit Card Debt Solutions In Time

November 29th, 2009

When you’ve found that the credit card debt you’ve incurred now seems impossible to pay down or eliminate, you might consider efficient credit card debt solutions as soon as possible. Truthfully, the solutions that work the best and can be implemented the easiest art all that hard to put into action and get control over these cards. What’s for certain is that paying just the minimum will not work.

First of all, realize that credit card issuers in the industry as a whole aren’t there to be your friend nor are they there to assist you other than to assist you in getting deeper in debt. Credit card companies are trying to make the maximum amount of money they can off you, so don’t make the mistake of thinking that paying only the minimum will ever get your credit under control.

Another thing to do as quickly as you can once you realize you have a debt problem is to sit down and come up with a plan for getting out of it. This will mean learning to develop a budget. If you don’t know how, consider meeting with a budgeting professional who can help you develop one. And take some time to sort your budget into items that are essential and those that are not so essential.

Once you’ve got these items sorted out begin considering what items that aren’t so essential you can begin getting rid of. This means movie nights out and dining out all the time, especially. If you can do this correctly you might find yourself surprised at how much extra money you’ll have which you can then apply to paying down those credit cards, meaning paying more than the minimum monthly payment.

Think of this example: Imagine you have a total credit card debt of $18,000 and you have no way of paying more than the minimum. You’re going to be in debt for 10 to 15 years, at minimum. However, if you can free up money in your budget from cutting out non-essentials you may be able to apply $300 or so extra. That will limit your debt in three years and save you nearly $48,000 in interest.

The single most important thing you can do, remember, is to stick to the budget plan that’s been developed at all times for however long it takes to get out of debt. You might consider having your weekly or biweekly paycheck deposited directly to your bank account and then bills paid automatically from your account. You won’t see the money, so you won’t be tempted to spend it.

You might consider — if you’re falling behind the matter what you try — seeking assistance from the credit card companies themselves. Try not to let your debt age more than 90 days — which will result in it in labeled as delinquent — and never let it go longer than’0 days or the debt may be written off and hang around as a stain on your credit report for a decade in some cases. Unfortunately, you may find that your credit card company is unwilling to work with you.

Consider also getting assistance from credit card debt solutions companies that are not out there scamming or otherwise trying to bilk customers. There are a number of quality solutions companies that exist, so check into them very carefully before taking one on. In all instances, if a plan is developed and adhered to, the chances of getting out of debt are much greater than with no plan at all.

If you’re falling behind on credit card bills and can’t get out from under the interest rates, you need credit card debt solutions. You will take care of your credit cards quicker and easier-learn more right now at http://justicedebtrelief.com.


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