Home 2009 Archives for February 2009

Archives for February 2009

Beware of Rent-to-Own

Posted on February 28, 2009 Written by

Beware of Credit Offers Aimed at Recent Bankruptcy Filers

Rent-to-own

By renting a TV, furniture or appliance from a rent-to-own company, you will often pay three or four times more than what it would cost to buy.  The company may make even more profit on you because the item you are buying may be previously used and returned.  And if you miss a payment, the company may repossess the item leaving with you no credit for the payments you made.

Source: Using Credit Wisely After Bankruptcy Pamphlet, National Consumer Law Center, Boston, MA, www.nclc.org.

Filed Under: Credit, Financial Help

Beware of Payday Loans, Auto Title Loans

Posted on February 26, 2009 Written by

Beware of Credit Offers Aimed at Recent Bankruptcy Filers

Small Loans

It is always best to save some money to cover unexpected expenses so you can avoid borrowing.  But if you are in need of a small loan, avoid the following high cost loans:

Payday loans

Some “check cashers” and finance companies offer to take a personal check from you and hold it without cashing it for one or two weeks.  In return, they will give you an amount of cash that is less than the amount of your check.  The difference between the amount of your check and the cash you get back in return is interest that the lender is charging you.  These payday loans are very costly.  For example, if you write a $256 check and the lender gives you $200 back as a loan for two weeks, the $56 you pay equals a 728-percent interest rate!  [Read more…]

Filed Under: Credit, Financial Help, Vehicles

Beware of "Bad Credit, No Problem"

Posted on February 25, 2009 Written by

Beware of Credit Offers Aimed at Recent Bankruptcy Filers

Be wary of auto dealers, mortgage brokers and lenders who advertise: “Bankruptcy? Bad Credit? No Credit? No Problem!”  They may give you a loan after bankruptcy, but at a very high cost.  The extra costs and fees on these loans can make it impossible for you to keep up the loan payments.  Getting this kind of loan can ruin your chances to rebuild your credit.

Mortgage Loans

If you own your home, some home improvement contractors, loan brokers and mortgage lenders may offer to give you a home equity loan despite your credit history.  These loans can be very costly and can lead to serious financial problems and even the loss of your home.  Avoid mortgage lenders that: [Read more…]

Filed Under: Credit, Financial Help

25th Bankruptcy and Debt Carnival

Posted on February 23, 2009 Written by

The 25th Bankruptcy and Debt Carnival is a collection of Internet blog posts about credit cards, debt, debt consolidation, finance, loans and personal finance.

Filed Under: Financial Help

Judicial Modification of Mortgages in Bankruptcy to House Floor Wednesday

Posted on February 23, 2009 Written by

Judicial mortgage modification in chapter 13 bankruptcy is expected to be considered on the floor of the U.S. House of Representatives as early as Wednesday of this week.   The proposed law eliminates the ban on restructuring primary residential mortgages to help people save their homes from foreclosure.  The law change will help people in foreclosure who don’t want to file bankruptcy also,  Chip Parker, Jacksonville bankruptcy lawyer, writes in the Bankruptcy Law Network blog.

The bill will be part of a large package of financial services legislation.  You can support judicial modification of mortgages in chapter 13 bankruptcy by calling or faxing your Kansas Congressional delegation today.  Here is how to contact your member of Congress:

  • Sen. Sam Brownback,  (202) 224-6521, fax (202) 228-1265
  • Rep. Jerry Moran,  (202) 225-2715, fax (202) 225-5124 
  • Rep. Lynn Jenkins, (202) 225-6601, fax (202) 225-7986
  • Rep. Dennis Moore, (202) 225-2865, fax (202) 225-2807
  • Rep. Todd Tiahrt, (202) 225-6216, fax (202) 225-3489
Filed Under: Chapter 13, Foreclosure, Mortgages

Beware of High Cost Predatory Lenders

Posted on February 23, 2009 Written by

Beware of Credit Offers Aimed at Recent Bankruptcy Filers

Avoid High Cost Predatory Lenders

Don’t assume that because you filed bankruptcy you will have to get credit on the worst terms.  If you can’t get credit on decent terms right after bankruptcy, it may be better to wait.  Most lenders will not hold the bankruptcy against you if after a few years you can show that you have avoided problems and can manage your debts.

Source: Using Credit Wisely After Bankruptcy Pamphlet, National Consumer Law Center, Boston, MA, www.nclc.org.

Filed Under: Credit, Financial Help

Student Loans Not Dischargeable in Bankruptcy

Posted on February 22, 2009 Written by

Generally, you cannot discharge your student loans in bankruptcy.  There is an exception for hardship but the definition of hardship is so narrow, the exception rarely applies.

To make matters worse, the time limits for collecting delinquent student loans have been eliminated.  Collection efforts will follow you for years and years.

The National Consumer Law Center established the Student Loan Borrower Assistance Project (SLBA), the premier Internet site for student loan borrowers.  There you will find information on repayment options for borrowers who are unable to pay their student loan contract payments.

Filed Under: Financial Help

Beware of Credit Repair Companies

Posted on February 22, 2009 Written by

Beware of Credit Offers Aimed at Recent Bankruptcy Filers

Credit Repair Companies

Beware of companies that claim:  “We can erase bad credit.”  These companies rarely offer valuable services for what they charge, and are often an outright scam.  The truth is that no one can erase bad credit information from your report if it is accurate.  And if there is old or inaccurate information on your credit report, you can correct it yourself for free.

Source: Using Credit Wisely After Bankruptcy Pamphlet, National Consumer Law Center, Boston, MA, www.nclc.org.

Filed Under: Credit, Financial Help

Beware of "Secured" Credit Card Offers

Posted on February 21, 2009 Written by

Beware of  Credit Offers Aimed at Recent Bankruptcy Filers

“Secured” Credit Card

Another type of credit marketed to recent bankruptcy filers as a good way to reestablish credit involves “secured” credit cards.  These are cards where the balances are secured by a bank deposit.  The card allows you a credit limit up to the amount you have on deposit in a particular bank account.  If you can’t make the payments, you lose the money in the account.  They may be useful to establish that you can make regular monthly payments on a credit card after you have had trouble in the past.  But since almost everyone now gets unsecured credit card offers even after previous financial problems, there is less reason to consider allowing a creditor to use your bank deposits as collateral.  It is preferable not to tie up your bank account.

Source: Using Credit Wisely After Bankruptcy Pamphlet, National Consumer Law Center, Boston, MA, www.nclc.org.

Filed Under: Credit, Financial Help

Beware of “Disguised” Reaffirmation Agreement

Posted on February 20, 2009 Written by

Beware of Credit Offers Aimed at Recent Bankruptcy Filers

“Disguised” Reaffirmation Agreement

Carefully read any credit card or other credit offer from a company that claims to represent a lender you listed in your bankruptcy or own a debt you discharged.  This may be from a debt collection company that is trying to trick you into reaffirming a debt.  The fine print of the credit offer or agreement will likely say that you will get new credit, but only if some or all of the balance from the discharged debt is added to the new account.

Source: Using Credit Wisely After Bankruptcy Pamphlet, National Consumer Law Center, Boston, MA, www.nclc.org.

Filed Under: Credit, Discharge, Financial Help

How Do I Know the Chapter 13 Bankruptcy Trustee Got My Payment?

Posted on February 19, 2009 Written by

How do you know if the chapter 13 bankruptcy trustee received your plan payment?   The chapter 13 bankruptcy trustees in Kansas generally does not mail out receipts for your payments nor do they send you a monthly statement.  There is a handy way to monitor your case on the Internet.

Your canceled check or money order stub is your receipt.  If you are paying by wage order, your pay stub is your receipt.  Keep these records until your case completes in case there ever is an issue over payments.

If you have filed a chapter 13 bankruptcy case, you can signup for a free online access to your account data.  [Read more…]

Filed Under: Chapter 13

Should I Reaffirm Department Store Credit Cards?

Posted on February 19, 2009 Written by

Some department store credit cards may be secured.  The things you buy with the credit card may be collateral.  The store might tell you that they will repossess what you bought, such as a TV, washer, or sofa, if you do not reaffirm the debt.  Most of the time, stores will not repossess used merchandise.  So, after a bankruptcy, it is much less likely that a department store would repossess “collateral” than a car lender.

However, repossession is possible.  You have to decide how important the item is to you or your family.  If you can replace it cheaply or live without it, then you should not reaffirm.  You can still shop at the store by paying cash, and the store may offer you a new credit card even if you don’t reaffirm. (Just make sure that your old balance is not added into the new account.)

For Example

Some offers to reaffirm may seem attractive at first.  Let’s say a department store lets you keep your credit card if you reaffirm $1000 out of the $2000 you owed before bankruptcy.  They say it will cost you only $25 per month and they will also give you a $500 line of credit for new purchases.  What they might not tell you is that they will give you a new credit card in a few months even if you do not reaffirm.  More importantly, though, you should understand that you are agreeing to repay $1000 plus interest that the law says you can have legally canceled.  That is a big price to pay for $500 in new credit.

Another option for keeping property with a purchase money security interest is redeeming it from the creditor for a lump sum cash payment.

Source: Your Legal Rights During and After Bankruptcy:  Making the Most of Your Bankruptcy Discharge Pamphlet, National Consumer Law Center, Boston, MA, www.nclc.org.

Filed Under: Chapter 7, Discharge

Should I Reaffirm Credit Cards?

Posted on February 18, 2009 Written by

It is almost never a good idea to reaffirm a credit card.  Reaffirming means you will pay bills that your bankruptcy would normally wipe out.  That can be a very high price to pay for the convenience of a credit card.  Try paying cash.  Then in a few years, you can probably get a new credit card, that won’t come with a large unpaid balance!

If you do reaffirm, try to get something in return, like a lower balance, no interest on the balance, or a reasonable interest rate on any new credit.  Don’t be stuck paying 18/-/21% or higher!

Source: Your Legal Rights During and After Bankruptcy:  Making the Most of Your Bankruptcy Discharge Pamphlet, National Consumer Law Center, Boston, MA, www.nclc.org.

Filed Under: Chapter 7, Discharge

Do I Have to Reaffirm Car Loans, Home Mortgages?

Posted on February 17, 2009 Written by

If you are behind on a car loan or a home mortgage and you can afford to catch up, you can reaffirm and possibly keep your car or home.  If the lender agrees to give you the time you need to get caught up on a default, this may be a good reason to reaffirm.  But if you were having trouble staying current with your payments before bankruptcy and your situation has not improved, reaffirmation may be a mistake.  The collateral is likely to be repossessed or foreclosed anyway after bankruptcy, because your obligation to make payments continues.  If you have reaffirmed, you could then be required to pay the difference between what the collateral is sold for and what you owe.

If you are up to date on your loan, you may not need to reaffirm to keep your car or home.  Some lenders will let you keep your property without signing a reaffirmation as long as you continue to make your payments.  Sometimes lenders will do so if they think the bankruptcy court will not approve the reaffirmation agreement.

Source: Your Legal Rights During and After Bankruptcy:  Making the Most of Your Bankruptcy Discharge Pamphlet, National Consumer Law Center, Boston, MA, www.nclc.org.

Filed Under: Discharge, Mortgages, Trustees, Vehicles

Kansas Suspends Paying Tax Refunds

Posted on February 16, 2009 Written by

The State of Kansas suspended paying $12 million in income tax refunds today and may not have enough funds to pay employee payroll on Friday, according to the Topeka Capital-Journal citing Budget Director Duane Goossen.

The state ran short in its main bank account to pay its bills.  Governor Kathleen Sebelius proposed moving funds from other state accounts, which requires permission of the State Finance Council.  The Republicans on that council are withholding consent until the Governor signs the 2009 budget bill.

Filed Under: Kansas Bankruptcy News

Do I Have Other Options for Secured Debts Other than Reaffirmation?

Posted on February 16, 2009 Written by

You may be able to keep the collateral on a secured debt by paying the creditor in a lump sum the amount the item is worth rather than what you owe on the loan.  This is your right under the bankruptcy law to “redeem” the collateral.

Redeeming collateral can save you hundreds of dollars.  Because furniture, appliances, and other household goods go down in value quickly once they are used, you may redeem them for less than their original cost or what you owe on the account.

You may have another option if the creditor did not loan you the money to buy the collateral, like when a creditor takes a lien on household goods you already have.  You may be able to ask the court to “avoid” this kind of lien. This will make the debt unsecured.

Source: Your Legal Rights During and After Bankruptcy:  Making the Most of Your Bankruptcy Discharge Pamphlet, National Consumer Law Center, Boston, MA, www.nclc.org.

Filed Under: Discharge, Exemptions & What You Get to Keep, Mortgages, Vehicles
Next Page »
Verified by MonsterInsights