July 19th, 2009 Written By: Kerri Randall
So you let one or a few of your debts get out of hand, and you ignored your creditor’s collection calls. Now you’ve been taken to court to settle the debt, and the court has resolved to garnish your wages. Once wage garnishment has been ruled, there is little that you can do to stop it. But if you do decide to try one of your few options, you need to act quickly.
Your first, and probably best, option is to try to reach an agreement with the creditor, preferably before the court proceeding. The creditor cannot garnish your wages themselves without a ruling, but you will have to commit to the terms of the agreement; court can still be an option at any point.
You can file bankruptcy. This will severely damage your credit score, but it will immediately prevent your creditor from collecting the debt that you owe. With this option, you’re really weighing the costs and choosing the lesser of two evils. While your creditor might be stopped in their tracks, you’ll have a tough time being approved for loans and other lines of credit in the future.
If the wage garnishment has already taken effect, and it’s too late to stop it, your last option is to file a “Claim of Exemption.” This means that the amount being garnished will be adjusted and lessened. You only qualify for this, though, if you can prove that the amount of money you’re left with is not sufficient enough to cover basic life necessities. When you fill out the form to submit to the court, you’ll need thorough proof of your income and a detailed list of your necessary expenses.
One important thing to note is that you’ll want solid documentation from your creditor when your debt is finally paid off. This can help you ensure that the account is removed from your credit report when it should be. You can also use it to supplement any future loan or credit applications to help explain the status of your credit score and why it’s so low, as well as show that you’ve worked on turning it around.
Categories: Handling Collections
Tags: bankruptcy, debt collection, wage garnishment
July 16th, 2009 Written By: Kerri Randall
If you’ve had a credit judgment placed on your credit report, you already know what it is, and there’s really nothing you can do at this point. If you’ve received notice that you’re facing a credit judgment, you’re in serious trouble, and the time to act is now.
A credit judgment means you’re being taken to court for failure to make good on an old debt. Perhaps you were even sent to collections over this delinquent account but you ignored the warnings or were unfortunately unable to pay. If the creditor believes they have a decent chance of receiving their money from you, the next step is to request a judgment from the court.
Unless the debt in question isn’t yours, chances are very high that the court will rule in the creditor’s favor. You don’t even have to be present for any actual proceedings. (If the debt really isn’t yours, then definitely attend and fight it all the way!) Once the judgment is ruled, your credit score will drop dramatically, and it can be extremely difficult to recover until you’ve paid off the debt.
But your credit score is the least of your worries right now; it gets worse. The common way for the court to ensure that the creditor will actually be repaid is garnish your wages. This means a certain amount of your paycheck will be withheld from you and sent to the creditor until the debt is paid in full. It can be embarrassing because now your employer will know your personal financial and credit information. Worse still, it’s obviously going to become harder to pay your bills and afford even simple life necessities, especially if you’re already living paycheck to paycheck.
Once you’ve been notified of a potential judgment proceeding (or even if you think you’re at risk for that), you only have a couple options left, but it’s best to consider at least one of them. First, you can file bankruptcy. This will also shoot your credit score down and you’ll still have a big hole to crawl out of, but it will protect your paycheck. Your other option is to contact a lawyer or a credit agency that can help you negotiate a payment arrangement with the creditor. The payment plan reached with the creditor may still be a bit damaging to your paycheck, but that may be your better option if it helps you avoid a judgment.
Categories: Handling Collections
Tags: collections, judgements, wage garnishment
July 14th, 2009 Written By: Kerri Randall
When you’re in college, you learn the value of free stuff, and you learn it because you have no money! So when pre-approval offers for credit cards get dropped in your mail, they can be quite tempting. A credit card account can be a great way to start building the credit you’ll need throughout your life, but be sure to choose the right one, perhaps one geared toward college students, and manage it wisely.
A Few Notes
Before you get started, there’s one thing you need to drill into your head: A credit card is NOT FREE MONEY! You still have to pay for every purchase you make—just not right now. Once the end of the month rolls along, you’ll get your statement, and you’re expected to pay in full. If you start the habit of doing so, you’ll be less likely to live beyond your means or get a nasty surprise when you open your bill and remember that you bought pizza for your entire sorority with your credit card that one night and no one chipped in. If you start off only making minimum payments, your credit card debt could soon rival your student loan debt.
That said, there are a couple of cards directed toward college students that can help you along. You’ll need your credit score for a lot in the future, including securing a job and applying for your first home. Time is your best friend in establishing a high score, so you want to get started early and maintain good habits from the start.
CitiForward Card for College Students
The CitiForward Card for College Students is recommended because it rewards you for good behavior. If you stay under your credit limit and pay your bill on time for three consecutive billing cycles, your APR could be lowered by up to 2%. That could mean a lot to you down the road if an emergency arises or your credit somehow gets out of hand. You’ll start off with 0% APR for the first six months (but check the fine print to see what could jumpstart the APR ahead of time), and you’ll get 5000 bonus reward points for choosing paperless statements within your first three months.
Citi mtvU Platinum Select Visa for College Students
The Citi mtvU Platinum Select Visa for College Students is my personal choice. Here, you also get 0% APR for the first six months, and there’s no annual fee. You get 25 Thank You rewards points for each month that you pay on time and stay under your limit, and you get up to 2000 Thank You points twice a year for having a good GPA. You’ll get 250 points for a GPA of 2.5-2.99, 500 points for 3.0-3.49, 750 points for 3.5-3.99, and 2000 points for a 4.0. Sounds like great incentive to be studying rather than spending! You’ll get closer to rewards for free.
AccountNow Prepaid Visa
If spending too much would be a temptation for you, consider a prepaid card, like AccountNow Prepaid Visa. There is a $9.95 monthly fee, but you have a $10,000 balance limit (meaning you can prepay up to that amount), and since it’s prepaid, you can’t go over your limit or get stuck paying finance charges. You also get free bill pay and free Credit Builder—while it’s not technically a credit card, your payment history will be reported and will affect your credit score (hopefully boosting it).
Your best bet is to save your credit card for emergencies only, but it happens to all of us—that dress is just too cute or you have no cash but your friend flew in to hang out for the weekend. The key is to choose the right card and be responsible about your spending. Use your credit card as a means to build credit itself, and try not to spend more than you can pay off when your bill arrives.
see creditcards.com more resources, check out creditcards.com
Categories: Money Resources
Tags: best credit cards, college student credit card, credit card rewards, Establish and Rebuild Credit
