Debt collectors will contact you and harass you to collect on a debt you owe.  You may recollect the debt and perhaps you don’t.  It really doesn’t matter, you have the right to dispute any debt and would you really send your hard earned money to anyone calling telling you to send money for a past debt owed?  I wouldn’t because I need to see proof that I am the responsible party.  But some debt collectors make it difficult, calling work and home, leaving threats.  You can end the harassment with one Cease and Desist letter.  

This letter shows them you know your rights and you intend to hold them accountable if they do not follow the Fair Debt Collections Act.  Below is a sample of the letter you can send them to stop the harassment of daily phone calls. 

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The current credit crisis and economic mess is hitting hard. So much so that it’s no longer just we mere mortals that are affected. Celebrities, known for their lavish lifestyles, are the hit too. I know. This is no consolation to someone who’s lost or is on the verge of losing his/her home. But it goes to show the depth and seriousness of the problem.

Here’s a small list of celebrities who have been faced with home foreclosure at one point;

1. Fantasia Barrino: In December 2008 the media was abuzz with the news that this American Idol season 3 winner was faced with foreclosure of her $1.3 million North Carolina home. Fantasia was reportedly in $58,000 debt loaned to her to help pay back taxes.

2.  Evander Holyfield: The former heavyweight boxing champion’s $10 million mansion in Fayette County, GA, was scheduled to be auctioned off last July.

3. Aretha Franklin: Oh, I love this lady. If you watched President Obama’s inauguration you saw her sing “My Country ‘Tis of Thee”. She is one of the best singers who ever lived. The queen of soul was in the news last March as on the verge of losing her $700,000 Detroit home due to $19,192 in back taxes.

4. Ed McMahon: The “Tonight Show” veteran has been in celebrity “foreclosure news” perhaps more than anyone else. Apparently Donald Trump should have bought the home and then lease it back to McMahon, but someone outbid him. So far none of the deals has been completed. I’m not sure we’ve heard the last of this one yet.

5. Jose Canseco: The baseball player reportedly walked away from his $2.5 million home in Encino, CA because, he reportedly said, it didn’t make sense to continue making the mortgage payments.

The list does not stop there. Others include Marion Jones, Tionne Watkins-Rolison (T-Boz), Latrell Sprewell, Courtney Love, and some mighty ones like even in celebrity terms such as Michael Jackson and Whitney Houston.

There are only two ways to save money, pay down your debt and save more of your disposable income. This is a great time to re-evaluate your debt situation and plan for a smarter future.

Each month when bills come in we look in disgust wondering how on earth can we thinks of ways to save money; not just for those items we need but for all of our wants. Take a look at your obligations and begin paying off your smallest commitments first. If you owe let’s say $1000 make a commitment to yourself to pay down this debt and decide how quick you can knock this out. Three to six months is a great goal if you can afford to cut back and put more money towards your goal.

More on Ways To Save Money; From Debt To Wealth

Bad credit credit cards are better known as secured credit cards. There have been many of these credit cards developed that were meant to improve your credit score but with a good look at the fine print, we’ve learned that these bad credit credit cards or secured credit cards are beneficial more for the credit card company instead of the consumer.

These bad credit credit cards were almost guaranteed with no credit or employment checks. All that was needed was a security deposit and you’d receive your new credit card within a few weeks. Spend a few extra bucks and you’d get your credit card within a week. Sounds great right?  Well, that’s not exactly how it worked out and many consumers have found that all the extra fees and charges placed them right back in the same debt hole they tried to dig themselves out of.

All credit card companies rely heavily on extra fees and maintenance charges, instead of the interest fees. Well, you’d receive your bad credit credit card and realize that $500 credit line was now only $50 after all the initial service charges and application fees you were responsible for. Before charging anything to the card, you had already run up fees and were responsible for a range of charges just for applying for the card.

There are some legitimate bad credit credit cards out there. Just go to a bank to see if they offer a secured credit card. Many banks do and all you have to do is open a secured savings account as collateral without all the extra fees. Bank of America, US Bank and Wells Fargo banks all offer secured credit cards and you can rest assured you won’t be overwhelmed with all the bogus fees. They are reputable banks that can help you rebuild your credit history.

All three banks have online applications and report monthly payment histories to the major credit bureaus. This will allow you to re-establish your credit worthiness. After a time period specified by each bank, they will offer you a regular credit card if you have made all prior payments on time. So those looking for bad credit credit cards and want to take hold of your credit worthiness, look for a reputable bank to deal with.

In life, there comes a time when making a tough decision is inevitable. Filing for personal bankruptcy is one such decision. This article about things you need to know if considering the bankruptcy route.

Bankruptcy is a huge decision. It is a decision whose consequences will remain with you for many years. Before taking the plunge, make sure you have exhausted all other options including debt consolidation and debt settlement. If it is the only way out, and sometimes it is, then go ahead.

There are two options for filing personal bankruptcy; Chapter 7 and Chapter 13. You must reside in a state for 90 days prior to filing.

Chapter 7 bankruptcy, also known as liquidation, is the most popular. This requires you to give up most of your assets and gets you out of almost all your debts. All your nonexempt assets are sold and the proceeds go toward paying creditors.

Exempt assets cannot be sold. These may include clothing, food, books, furniture, wedding ring etc.

Chapter 13 bankruptcy is also known as wage-earner bankruptcy or reorganization. It allows you to keep most of your assets and arranges partial or full payment of the debts owed over three to five years, under court supervision.

You can file for both types of bankruptcies (hopefully not at the same time) without a lawyer, but it is strongly suggested that you get one. You also have to pay a filling fee with the court. This fee can be paid in installments with court approval.

If you decide to go without a lawyer make sure to thoroughly do your homework.

Finding a Lawyer

Finding a good bankruptcy lawyer may not be easy. You can try consulting a friend, relative or co-worker whom you know has been through this for recommendation. Or you can go to American Bar Association, Lawyers.com or American Bankruptcy Institute.

Do It Yourself

Lawyers cost money and, as you know, they don’t come cheap. You can do it yourself, but this can be extremely stressful. At the bottom of this page you’ll find a link for a do it yourself bankruptcy kit. We have not tried it, but it may be worth checking out.

New Bankruptcy Laws

The “new” bankruptcy law that went into effect in October 2005 makes it extremely difficult to file for bankruptcy under chapter 7.

To qualify for Chapter 7, you now have to pass a means test. And they just won’t take your word for it. You have to show the court a copy of your last tax return. Your income must be below median in your state, following IRS guidelines.

If it is determined that you can make partial payments to your creditors you cannot file for Chapter 7 and will have to go with Chapter 13.
 
You are also required to get credit counseling in the 180 days prior to filling.

Basically what our lawmakers did was to give creditors and collectors a virtual license to hound you for the rest of your life, the very thing bankruptcy was supposed to prevent.

In a Chapter 13 bankruptcy, your income is determined, your expenses deducted and then your disposable income put toward repayment of debt. Your disposable income is defined by subtracting IRS allowable expenses not what you believe to be your expenses. The money is paid to a court-appointed trustee who then pays the creditors.

You are also limited as to what you can buy before filing. Debts incurred up to 90 days before filing cannot be included in a bankruptcy petition.

After filing but before you’re discharged from the bankruptcy you must complete a course in financial management.

Your attorney must also certify that what you say in the you use documents in court is true (isn’t this what perjury laws were made for?).

For a do it yourself bankruptcy kit go to Filing Bankruptcy and get a kit for a one-time membership fee of $35.95 (price subject to change).

Refinancing a mortgage is done by most people to lower their interest rates and reduce monthly mortgage payments. There are good points and bad points to refinancing your mortgage.

When you consider that refinancing is essentially paying off your current mortgage by signing a completely new contract for your home loan, it can be a hard decision to make. There is always the chance that it won’t be in your best interests to refinance your mortgage. Before making this all important decision, ask yourself the follow questions:

Would your new interest rate be lower than your current one?

When your are thinking of refinancing a mortgage, check to see if the current interest rates are at least 3 or more percentage points below what you are paying now.

This is important because a lower mortgage rate means that you will pay less interest each year, and this means there will be less interest to deduct from your income tax. This will probably cause an increase in your income tax liability which will have to be offset against the savings from the mortgage interest.

You need to also be aware that there are some refinancing costs that might be tax deductible during the year you are refinancing. However, for those discount points to be deductible, it must be spread out over the life of the mortgage.

What are discount points, and will they affect the cost of your mortgage?

The easiest way to explain discount points is to understand that each discount point will be equal to 1 percent of the total loan amount. Lenders use the technique of charging points in order to adjust interest rates. Doing it this way, the lower the interest rate goes, the more points you will be charged. The higher the interest rate goes, the fewer points you will be charged. Combining points and interest rates determines the annual percentage rate or APR. Lenders are required by law to provide the APR to you, the borrower. You can compare the combinations of points and interest rates to help figure out the best deal for yourself. Don’t forget, though, that there are other costs that you must consider.

Will it be better to stay with your current lender or find a new one?

If it is possible, renegotiate your current mortgage at a lower interest rate with the lender you are with now. This can usually be done for a set fee. Choosing to renegotiate a mortgage is more of an amendment made to your existing mortgage agreement as opposed to refinancing. While the interest rate for this may not be as low as the current rate to refinance, you can save money because there are no closing costs involved.

If you find that you cannot renegotiate with your current lender, it is time to do some research to find someone else to try. Investigate the charges that might be involved if you refinance through a new lender. Keep in mind also, that the total charges of refinancing a loan usually runs between 3 and 7 percent of the total mortgage.

Now that you are armed with the facts, you can make a more informed and wiser choice regarding whether to refinance or not.

Everywhere you look today there’s work at home scams advertising to unsuspecting unemployed workers. Look in newspaper classifieds, street light posts, highways and your email and you’ll find someone proposing to locate or hire you for a work at home job.

These work at home hoaxes and scams are ripe for distressed workers with little hope right now. While these list of work at home scams and advertisements seem appealing, especially if you’re unemployed or disabled and can’t work outside of your home, you must be prudent when selecting a work at home opportunity. Not all work-at-home prospects deliver on their over the top promises.

Many work at home scams will entice you with an amount you can possibly make per week or per month, without telling you how many hours you must work per day. And they omit the fact of just how many non-paid hours you *must* work per day before you get any pay. And most importantly, many of these work at home scams will require you to pay fees up front to find out where the work at home opportunities are located, when consumers really can utilize the internet to locate work at home jobs. It turns out to be a maze of schemes to get your money.

A well-known work at home scam is the stuffing of envelopes, or at least that’s what the classified ads suggest. More often than not, consumers are told to place an ad recruiting new people to send in money to get a list of work at home jobs. So the same ad you responded to, you’re now recruiting new people to get in the game. It’s an on-going saga that really goes no where and no other work at home information is ever provided.

It makes you wonder how work at home scams keep their vitality with the wealth of information online explaining just how to avoid them. Before choosing from a list of work at home opportunities, realize that this could be a list of work at home scams so do choose hastily and check your information thoroughly.

Every month hundreds of thousands of people find themselves short on money. With no real options available for help, many of these people turn to one of the biggest scams around. You have heard of them, and probably received their spam emails. These sites, also known as payday loans or cash advance loans, make outrageous promises to reel in the needy and unsuspecting victims. What you probably don’t know is that these “businesses” have illegal interest rates and guidelines. This seems to be common knowledge but state laws have not closed them, and they make more money off innocent people every year.

Payday advance loans look good on the surface. They can be like throwing a life preserver to a drowning man. It is these circumstances that make it easy to prey on people who are a step away from being homeless, or having their utilities shut off, or just needing to buy food. Good credit is not required to secure one of these and it can be done right at your computer. The cash advance loan was made just for those who are in a financial mess, for whatever reason.

Before you go racing to one of these sharks, you need to understand that you will be required to pay back much more than you borrowed. Also, be sure to read all the fine print before you sign something you will not be able to handle down the road. Ask yourself if this is the only way out for you.

Some of these loans are easier to get than others, but there are basic requirements to be met before obtaining one. There are usually age requirements, a job or some other income to repay the loan, and references that can be contacted if you miss paying back the loan. A savings or checking account is the most important requirement. There needs to be somewhere for the funds to be deposited.

If you truly feel you have no other alternative, at least do your research on these payday loan companies. You may be able to find one that will have some advantages for you. The companies that operate under the same lender need to be avoided, even though they will offer to loan you much more money. Borrowing too much money will be just as bad as being broke in the long run. Overextending yourself will only require you to pay all that money back within just as short a time frame. This situation will have you just as broke as when you took out the loan.

The application can be completed and submitted online. Once your application is received, the lender will set about verifying the information provided. You will most likely get a call at your job to verify that you actually ARE working and will be able to repay the money. It is a bit invasive, but people with bad credit see this as an easy way to secure a personal loan quickly, usually within 24 hours.

When it is time to repay the loan, the lender will withdraw the loan amount plus interest from your savings or checking account. That money needs to be in the account when this day comes or fees will start to grow. The lender will also begin taking the fees from your account without even telling you.

Cash advance, or payday loans, or whatever other name they go by can seem like a port in a storm. Sometimes, though, they can simply be a leaky boat with the holes temporarily plugged, causing you to just sink again.

Need a payday loan? Check out Direct Lender Payday Loans

Auto insurance companies are seeking more and more ways to part you with your hard-earned money. Some of these unfair practices border on discrimination (I have no better word for it).

It started with credit scores. Though some states have outlawed this practice in states that have not, many insurance companies continue to charge rates on premiums based on credit scores. Yet in most states, auto insurance is not a choice. It is mandated by law.

And the consequences can be dire if caught driving without “liability”. They include hefty fines and long license suspensions depending on the state’s laws.

Why these companies would charge you more based on credit scores for something which you have no choice whether to have or not to have, beats me. Miss one payment and your coverage could get cancelled, and as far as I know from experience, a policy cannot be reinstated once cancelled. There is virtually zero risk of default.

As if this is not enough, now some auto insurance companies are basing premium rates on level of education, occupation, home ownership and whatever else they deem fit. It is one thing to consider me “high risk” because I’ve had one accident or a speeding ticket. But to charge me more on basis of not having a college degree is beyond the understanding of my mortal mind.

What has renting or owning a home got to do with my driving? Why should, say, a doctor of equal age and driving experience (who also makes more money) as I have to pay less?

And it’s not just about rates. Your eligibility is also affected. Yes, a company can turn you down or decide to drop you based on these preposterous criteria.

Why, pray, are insurance auto companies being allowed to practice what I dare call classism?

There are various forms of debt consolidation, but basically two. Confused? Let me explain, and then we’ll go to the pros and cons of both types of debt consolidation.

The first form of debt consolidation is using one of various ways of borrowing money in order to pay down debts so you are left with one payment. This includes, for example;

1. Putting all your accounts into one new or existing credit card, hopefully with a lower interest rate. This option works best for those with good credit scores as they can get low interest, high-limit credit cards.

2. Obtaining a loan secured or unsecured, and then using the funds borrowed to pay off your debts. You now have one debt to deal with. People often use home equity lines of credit for this. Those with good credit scores can get an unsecured loan for this purpose. Such a loan  be called a debt consolidation loan.

The Pros of Debt Consolidation Loan

1. If you get a low interest rate, your monthly bill will be reduced, sometimes significantly.

2. You now only one payment to worry about as opposed to multiple with different due dates.

The Cons of Debt Consolidation Loans

1. Getting fair interest rates can be difficult and some lenders can result to trickery. You could get a low interest rate and then see it jump somewhere down the road. Obtaining a home equity line of credit has certain disadvantages and risks, subject of a different article.

2. False sense of safety: You may feel like you paid off your debts and are now debt-free, which is not really the case. You just have one big payment. This false sense of safety could lead you to start charging your credit cards again and you’re back to square one.

The second form of debt consolidation is the most common. It involves working with a debt consolidation company and/or a credit counselor.

Pros of Working with a Debt Consolidation Company

1. A good consolidation service or credit counselor will negotiate better terms on your behalf, including lower interest rates, with your creditors. This often reduces your total monthly amounts.

2. If you hit a bump or two down the road (don’t we all), the counselor or company will explain your situation to your creditors in a professional manner.

3. You now have only one payment to worry about.

The Cons of Working with a Debt Consolidation Company

1. If you get a bad or scam company you could find yourself in a worse plight than before. Some debt consolidation companies have been known to charge, often hidden, exorbitant fees. Others will take your money and not forward payments to your creditors.

2. You will be required to close most if not all your credit accounts. This will hurt your credit history and score. Additionally, you will be advised not to open new credit accounts for a period of time (typically about three years).

3. Some creditors view debt consolidation in the same light as a Chapter 13 bankruptcy, the difference being that debt consolidation does not stay on your report for up to 10 years.