Help Bankruptcy Blog

With today’s tightening credit crunch, and the lower value of the U.S. Dollar, more and more people are interested in ways to improve their credit score. Their hope is that by having a higher credit rating, they will be better able to keep their credit card rates low and maybe even get a consolidation loan to put all (or most) of their higher interest credit into a more manageable position.

If you are looking for a way to inproving your credit rating, there are some things you need to consider. First of all, it is rarely a good idea to work with a credit repair company. It sounds funny, I know, but these companies do a lot of the work you could do yourself, and then they charge you for it.

The worst of them actually have you pay them your monthly payments, and they are supposed to pay your creditors. Too many people I’ve heard about find that these companies don’t ever pay anything to the creditors, making your credit even worse than when you started!

That is probably an extreme case, and I know there are reputable firms out there that will help you manage your debt. Still, when I posted a question on Yahoo! Answers recently asking whether I should try to repair my credit on my own or hire a company, the overwhelming response was to do it myself.

It still takes time, but that’s part of the price of climbing out of this hole of mounting debt that I’ve found myself in.

I came to the conclusion that I would do it myself, but I really needed someone to tell me exactly what I needed to do and how to do it. Fortunately, I came across the Credit Secrets Bible which has those exact answers.

I won’t bore you with the details, but if you need to repair your credit score (and who doesn’t, these days?) you should check out the Credit Secrets Bible for yourself.

Identity protection is essential to the protection of our credit because corporations are regularly “misplacing” our private data. Identity thieves have recognized that our private information is worth lots on the black market and they are stealing laptops and backup tapes to get what they want. Our information are then sold to identity theft rings who go after our money. If you don’t think this happens often or that you don’t need identity protection you are mistaken. The following are some examples from last year.

100,000 employees of The Transportation Security Administration, including federal air marshals and airport security officers, had their private records compromised when a computer hard drive containing payroll information was stolen.

Connecticut’s Revenue Service reported a laptop “missing” that stored the private records of about 100,000 taxpayers.

Administaff had a laptop stolen which held the private data of 159,000 employees.

Neiman Marcus Group exposed the private records of 160,000 employees when a computer was stolen from a consultant.

230,000 police officers and guards in the State of Texas had their private data exposed when a computer was stolen from a state agency.

500,000 taxpayers and employees of the State of Ohio had their private records including SSN’s compromised when had a backup data storage device stolen from his car.

230,000 Hartford Financial Services clients in the State of Ohio had their private data lost when 3 storage tapes were lost.

TSA of Arlington, VA misplaced a backup device with 100,000 records that contained Social Security numbers, bank account and routing information, dates of birth, addresses and payroll data.

47,000 clients of J.P. Morgan Chase had their private records exposed when a computer tape was stolen from a secure off-site storage facility.

Over 190,000 clients of Blue Cross Blue Shield in Virginia had their private records, including social security numbers, compromised when backup tapes holding this confidential information was stolen from a third party vendor.

Identity theft is big business in North America today. Criminals acquire our private records by using many means besides the theft of laptops and backup tapes. They are targeting all of us and they will take you for all you are worth if you don’t protect your money. This is why identity protection services like LifeLock, TrustedID, LoudSiren and Debix are growing fast. Identity protection programs are a type of insurance that offers us protection from financial loss. Visit Loudsiren or one of the other identity protection services to learn more about protecting your finances.

There is a category of mortgage loans available for those with a less than stellar credit record who want to acquire their own home. This category of mortgage loans is called sub prime lending, but is also referred to as non conforming lending in some market segments. This type of mortgage loan has only come into existence in Australia since about 1997. The need for an alternative existed because of the rigid lending guidelines of most lenders. An increasing percentage of the workforce have been shifting to part-time and casual employment, and were failing the traditional lending guidelines.

To give an example, recent statistics indicate that Australia has some 2 million casual, contract and part time workers. In addition to this, nearly one million Australians are self-employed, and these borrowers were also failing the guidelines due to a lack of evident income records.

800,000 workers are over the age of 55, and financiers are resistant to lending 25yr home finance to more mature applicants. There are also some 300,000 people with credit defaults listed on their credit file. Add to that one hundred thousand new immigrant arrivals every year without a previous credit history in Australia, and twenty five thousand new bankrupts every year, with a comparable number being discharged from bankruptcy every year.

All of this adds up to the obvious requirement for an alternative form of home mortgage finance with more flexible guidelines to cater to these various groups of people. Further information about the different categories and providers of these more flexible forms of home mortgage finance can be found in the following sub-prime loans article.

For a broader and more comprehensive overview of all the different forms of mortgage finance including all the full-doc loan options, in addition to lo doc and no doc loans, there is a further article on the financiallyfree website on the Different Types of Home Loans. When choosing a loan type, it is advisable to consider factors other than the interest rate. As a general rule, the more flexibility and features that a loan has, the higher its interest rate will likely be, but the flexibility can be a blessing over the long term as it allows you to structure your payments for home finance reduction purposes, either by making your payments fortnightly instead of monthly, or by enabling you to add periodical lump sums into your loan, or to offset the interest on a percentage of the balance of the loan by parking your salary or other savings into an offset account.

If the subject of mortgage minimization is of interest to you, I highly recommend that you look into the Mortgage Cycling Revealed ebook by Craig Romero. A link to Craig’s website can be found behind the peel back webpage graphic in the top right hand corner on the above mortgage reduction webpage.

More information on the different types of mortgage finance available, both sub-prime (non-conforming), as well as standard full-doc, lo-doc or no-doc loans, as well as comprehensive tips on mortgage minimization can be found on the FinanciallyFree.com.au website.

Thanks to rising interest rates, higher minimum payments required by credit card companies, as well as your own overspending (just admit it!), your ability to keep up with your credit card debt may be more difficult than ever. More and more people are finding themselves in a situation where they are struggling to keep their heads above water.

It doesn’t even seem to matter if you pay extra when you can, because your balances still grow. It’s like running to get away from a boulder that keeps going faster and faster.

Here are five things you can try right now to try to ease the pain.

1. Negotiate Lower Interest Rates. You need to call each of your credit card companies and try to get a lower interest rate. This often takes begging, pleading, negotiating, asking for higher levels of authority, even cajoling and wheedling (whatever those are). Their response will normally depend on things like your payment history, creditworthiness, etc. It can help if you can clean up your credit score before you take this route. Keep track of who you talk to and when, and what their responses are.

2. Consolidate Debt. In some cases (but not in all) it makes sense to transfer a bunch of smaller cards over to one bigger card with a lower interest rate. Be sure to read the fine print to see what kind of fees they will charge you for making the transfer. Sometimes this is not another card, but a loan that is not secured by your house or property. (That’s an entirely separate topic!). You probably get these offers in the mail.

One problem I had recently with getting one of these loans is that they checked my credit report first. Due to these credit card problems, the results were not good. Try to improve your credit rating before doing this. It is important that if you do transfer your balances to another card or a consolidation loan, that you do not use the original card any more. It takes discipline.

3. Create A Payoff Plan. Start paying off your credit cards one at a time. Make minimum payments on all but one card. On that one card, pay as much as you possibly can. Try to set up a schedule to show how much you need to pay to be rid of the first card. Once you have paid that one off, use the money you were putting towards paying that one off, and ADD it to the next card in line. This also takes discipline, but is the most prudent way to eliminate your debt.

The order you pay them off can be determined in one of two ways. First, pay off the highest interest rate cards first. This will save you the most money over time as you are just flushing away the money spent on interest every month. Method two is the one I prefer. Pay off the smallest balances first. This frees up your cash faster to apply towards the next card. In reality, you can use both methods. Pay off a small balance card first to free up a little more cash, then hit a high interest-rate card, then go after the next smallest balance, and so on.

4. Increase Cashflow. It’s always helpful to have some extra cash to begin or continue a debt payoff plan. Go through your house and find all the junk you don’t need any more: baby clothes, collectibles, decorations, housewares, books, VHS tapes,
DVDs, computer and video games, etc. List them on eBay or Craigslist and sell them off. It will help generate some cash, as well as give you some peace of mind by uncluttering the domicile.

5. Apply Extra Money to Your Debt. Are you getting an annual bonus at work? Are you going to receive a tax refund from the government? Are you going to get that credit the IRS promised US taxpayers? Apply that to one or more of your credit cards to help you eliminate that debt. Believe me, I know it will be tempting to spend it, but it will do you far more good to apply it to covering what you’ve already spent. That’s actually how I got out of debt the first time!

These five steps may not work for everyone, but they are a great place to start. Apply yourself to controlling your debt and paying it off. It takes work, but it wil be well worth the effort.

It can be quite nerve racking when the bill collectors are calling and sending demand notices, however you can handle it. There are ways you can protect yourself and also ways to properly handle your debt collectors.

There is an act that was designed just for individuals that are trying to cope with the overzealous bill collectors. The Fair Debt Collection Practices Act is a guideline that must be followed when a debt collector is attempting to collect payment on a debt. It is illegal for a debt collector to call a residence before 8 a.m. and after 9 p.m.. They are also not allowed to threaten the garnishment of wages or harass you with phone calls after you have asked them to stop calling you. For more information go to => www.ftc.gov/os/statutes/fdcpa/fdcpact.htm#801.

If you have an answering machine, you can screen your phone calls before you answer them. Adding anonymous call blocking to your phone line can also help from receiving the unwanted collection calls. Well, at least from having to talk with the person on the other end. However, if you decide to answer the phone you can request that the collector no longer call you. Once you have stated to them that you don’t want any further phone calls, legally they have to stop the phone calls to you.

You should seriously consider reaching an understanding with the agency to return what you can before taking drastic steps. In many cases, the collector is authorized to reduce the amount owed in order to collect the money. Usually, if you make payment arrangements on the debt, the collection calls from that company will stop.

Keep a log of all calls between yourself and the collection agency. If you have agreed to any payments be sure that you write it down as well as the person you made the agreements name with. Try your best to keep the agreement you have made, if you are unable to keep it notify the company as soon as possible. If you have requested the collector to stop calling you, you can record any phone calls with them. Be sure you alert them to the fact that the calls are being recorded. This is usually very effective in making them cease the harassing phone calls.

For most of the time, you can usually bargain for the amount of cash you need to pay. The collection agency gets a commission off of the amount of money they successfully collect. So, in many situations they will accept a smaller payment in order to collect any money. In their eyes, any money is more than nothing.

If you agree to a smaller payment, be sure to request that there should be no further negative marks placed on your credit report. Also, be instant that they promptly report the payments made as well as adjusting the amount that is owed on your credit report.

When you have made the first payment, an agreement should be reached. In this agreement it should state the amount that is owed as well as the terms of the agreement. Send as little of a first payment as possible. This will insure that they will keep their end of the agreement and hold true to the contract.

You can find more resources on how to consolidate debt, student loan facts and stock options trading by clicking on the links.