Knowing When to Get Help
- 1. You avoid phone calls because it may be a creditor.
- 2. You have three or more creditors are constantly trying to reach you.
- 3. You are considering getting a loan to pay of your debt.
- You are considering filing for bankruptcy.
- 4. You are paying more than 20% of your monthly income toward debt (this does not include mortgage or rent).
- 5. You have missed more than one mortgage or rent payment.
- 6. You are having trouble making the minimum payments on your credit cards.
- 7. You are receiving warnings from your utilities, or they have been shut off.
- 8. You and your partner argue about money.
- 9. You have been turned down for credit.
- 10. You have written bad checks unintentionally. If you have done this intentionally, you’ve committed a crime.
- 11. You are receiving calls from more than one creditor.
- 12. You have been summoned to appear in court.
- 13. Your car has been repossessed.
Most often, if you contact them before they contact you, you will still be considered a good customer going through hard times, as opposed to a customer who is a collection risk. Managing problems with student loans are relatively easy, provided you contact them before you go into default.
Give them a call and explain your situation, and more often than not, they will work with you. For problems with mortgages, try to make up any shortfalls within the grace period. If you can’t, you should seek outside help.
If your problems get away from you, that is, if you have more than a few bill collectors after you, or if you have problems with debts that are backed by assets, you should seek professional help from a legitimate credit counseling agency.
A good counselor will take into account your current and future needs (buying a home, or sending a child to college) in recommending debt management plans. To help ensure that you use a legitimate agency, look for accreditation with the COA (Council on Accreditation) or the ISO (International Standards Organization), and make sure the accreditation is current. You can also check agencies out with your state’s consumer protection office. An above board counseling agency will charge you less than $100 for counseling and setup fees combined.
In life, things come up and throw us for a loop. It has been said that prevention is the best medicine. To avoid emergencies in the first place,
- 1. Plan ahead – save up “just in case.”
- 2. Put your savings away first, not last. Don’t wait until there’s not enough to put in the savings account.
- 1. If necessary, sell some of your unused big – ticket assests.
- 2. Increase your income with overtime, a raise, or a second job if possible.
- 3. Borrow against your home. This is fine to do when necessary, just try to stay within 75% of the value of your home.
- 4. Put off your retirement contrbutions if you must.
- 5. Seek help from family, friends, or a professional.
- 6. Declare bankruptcy. If all else fails, this is a good option, as this is what bankruptcy is for.
- You are entitled to a free copy of your credit report each year.
- You are entitled to a free report if you feel your identity has been stolen.
- Once suspected identity theft is reported to a credit bureau, the bureau has a responsibility to ensure that future credit transactions are actually from you.
- Active duty military personnel can place an alert on their files to protect their credit.
- You have the right to be informed if your report has been used against you.
- You have the right to dispute inaccurate information, and have it corrected or deleted within 30 days.
The FACTA is beneficial, as it helps to protect you from identity theft by attempting to stop it before it starts. This is done by taking note of certain changes, like changes of address, or requests for replacement credit cards. The FACTA also requires creditors to give you early warning notices when there is negative information in your account history that may be reported to a credit bureau.
In addition, you may receive a notice after negative information has been reported. To further protect consumers, the FACTA demands that receipts for credit and debit card transactions only include the last 5 digits of the credit card number, and that the expiration date is excluded.
This active-duty alert stays on your credit report for a year, and all potential lenders must contact you before extending credit. This is done to ensure that these actions are legitimate. The FACTA rules are in addition to the SSCRA (Soldiers and Sailors Civil Relief Act), established in 2003. Under the SSCRA, military personnel are entitled to the following:
- Court hearings can be held off by a 90 day stay if you are unable to attend due to your military service. You must request this, and the judge can grant additional delays if needed.
- Interest rates on pre-service loans, IF REQUESTED, can be reduced to 6 percent. Interest in excess of 6 percent per year must be forgiven. To take advantage of this, make sure you make your request in writing and include copies of your military orders.
- Proper court action must be taken before you are evicted from rental property for not paying the rent.
- If you are under orders for permanent change of station, or if you are deployed for at least 90 days, you may terminate housing leases entered into before you started active duty – without a military termination clause in your lease.
- Automobile leases can be cancelled if your orders are for 180 days or more. This applies to family members as well.
- If the military moves you to another state, you can keep your state of residence.