Military Financial Protection – Military Lending Act

What’s worse than preying on people with bad credit? Probably preying on our service members. Some companies try to lure in military service members for what they claim are special rates or loans, but in truth, it’s really preying on their needs or belief of special offers because of their military status.

For military service members, a promise of special rates, low mortgage fees or suspended car payments doesn’t often come off as scams as obvious as an offer to someone with bad credit. Military are often the recipients of special terms so it’s important to raise awareness so military families can protect themselves.

The Military Lending Act (MLA) is a good place to start for military service members and their families to understand their financial rights. Offers of easy money loans are often a web leading to high cost loans with a lot of hidden fees.

With serving their country — our country, military members do not need to be burdened with debt they cant pay back.

A particular troubling offer one needs to stay clear of are high interest payday loans. These loans appear affordable on the surface but deep in the terms can be fees and interest amounting to more than a service member can afford. These types of offers leave their families with the added stress of trying to pay the debts while the military member is off serving our country.

Whether its a payday advance loan, vehicle title loan, line of credit or tax anticipation loan, military family members need to be careful and educate themselves with the MLA to protect their finances.

You can learn more about military financial protection and the Military Lending Act here as well as discover legitimate loan offers for military personal.

What Happens to a Deficiency Balance in a Chapter 7 Bankruptcy

A Chapter 7 bankruptcy is often referred to as a straight BK because you normally have no assets to speak of or do not qualify for a payback plan like you see under a chapter 13.

People who file for chapter 7 bankruptcy usually claim all debts in the proceeding and walk away clean. A chapter 7 can mean “no assets” and usually consists of credit card debt and medical bills. Many people are forced into a bankruptcy from medical bills piling up and no health insurance. It’s tragic that it has to be this way in the United States.

If you do own assets but have no way of repaying your creditors, even a portion, the court will usually evaluate how many assets you have and if they can cover any of your debts. Credit card bills obviously have no collateral attached to them so they are often the cause of a BK 7 as well.

If you own a car dont feel like the court is going to force you to sell it to pay your creditors back. A person has to have a way to get to work. If however you have cash, assets, multiple vehicles or property, that will be taken into consideration for the type of bankruptcy you qualify for.

Often times a bankruptcy filing is a last resort but if creditors start hounding you non-stop or you’re being sued then bankruptcy can protect you and put a stop to collections. During a bankruptcy petition, there is an automatic stay that forbids creditors from coming after you.

What Happens to a Deficiency Balance in a Chapter 7 Bankruptcy

If your bankruptcy is successfully filed and discharged (not dismissed), you will not owe any deficiency balance in a chapter 7. The debts are wiped away.

Of course, each case is a separate situation so discussing your options with a bankruptcy attorney is suggested. He can explain to you about the Bankruptcy Means Test & Debtor Education that is required.

Negative Credit History – Catastrophic Results

catastrophic language breeds catastrophic results. 

That quote says a lot. The impact of words stream onto our credit reports and has catastrophic results.

One of the reasons that “credit bureau mistakes” is such a hot topic button is because of their impact on people’s lives. No one would blink an eye if the result of a negative credit history meant you paid 12 cents more a year on a car loan. It’s what those negative credit report listings do to our daily lives.

A bad credit history will impact;

  • your credit score resulting in less financial opportunities
  • impact the rate you may pay for car insurance
  • impact your ability to find a good job – a career in your field
  • impact your ability to rent a house or apartment
  • impact your financial security by way of judgments and liens

The list goes on… People feel REAL realities because of what their credit reports say about them. Its because of this – that so much particular attention is paid to credit reports. It’s reputation management at the least and you should protect it.

For people who feel slided by the credit industry it can be a real nightmare. If a collection account, judgment, tax lien or bankruptcy listing lands on your credit reports and its inaccurate, its immediately felt. It doesnt take months to “add up” to financial pain. It’s immediate, the minute it shows up in your credit history.

You may say, “well, you reap what you sow” but that isnt always true. Credit reports contain mistakes. A lot of mistakes.

Consumer Protection Agencies work hard to help stop the spread of messy credit reporting but it takes a lot of work from everyone involved. The creditors, collection agencies, credit bureaus and you.

A mistake in your credit reports wont be found by anyone but you. If you’re not looking at your credit reports a few times a year then how do you even know whats in it?

Then, one day, you need to buy a new car. It’s at that point you notice the mistake but now is not the time to catch the mistake. A dealer at your local car lot isnt going to stand around and wait for you to fix the mistake that day because you cant.

A credit report error takes time to fix. You’ll have to contact the credit bureaus and start an investigation which will take about 30 to 45 days. That doesnt do you any good if you need a car right now.

A credit audit is something everyone should do at least twice a year. Catching any mistake before it impacts your life in a catastrophic way is the only way. Repair your credit before you need it.

(image credit)

Your 2012 Credit Repair Plan – Be Diverse

Happy New Score! 2012 is your year to have better credit

In these tough economic times, its harder than ever to get favorable credit terms. A blemish here or there is just enough to make potential creditors worry that you may be too much of a risk.

2012 credit repair plan

2012 is the year!

For 2012 a new plan could be just what you need to get your credit back on track once and for all.

A long term goal to improve your credit is a reasonable goal. No one rebuilds their credit history in 30 days. It will take some commitment and patience but the rewards can be seen in dollars.

Your 2012 credit repair plan should be diverse. Credit doesnt consist of one vertical and neither should your strategy to improve it.

Your credit report contains many different types of accounts and that can include a mortgage, car loan, medical collections, a judgment, perhaps a tax lien. Even a bankruptcy doesn’t mean the end all for your credit.

Positive strides to improve your credit

Every good plan starts with a path. You can’t get where you’re going if you dont know where it is. Start small and work to improve the things you have the most control over. Whether that’s a past due gym membership or a delinquent medical bill, you’ll want to tackle the smallest or least complicated issues first.

Our credit reports create a score. That “credit score” determines how good your credit is. A low credit score means you’re going to get less favorable terms and interest rates while a high credit score is going to give you much more leverage.

Cleaning up a lot of little miscellaneous issues can have a big impact on your overall credit score and shouldnt be overlooked. Removing just one collection account, even a small one can have great impact on raising your credit score.

Even removing multiple addresses and old information can help to tidy up your credit reports and give a clearer picture of who you are. Everything counts!

Bigger issues like judgments, tax liens or even a bankruptcy means more work and a longer recovery process but don’t let that scare you. Whether an account is 50.00 or 5,000.00 it still has to follow the same rules under the Fair Credit Reporting Act and that is that it must be verifiable, accurate and timely.

A mistake made by a creditor or collection agency is often enough to work in your favor in deleting a negative item.  If you follow a strategy of working each item on its own and not letting yourself get overwhelmed with the whole picture, you’ll accomplish much more. There is no exaggeration here when I tell you that I have seen people remove 20, even thirty items from their credit reports in as little as 2 months. It happens all the time because record keeping between furnishers of information and credit bureaus is sloppy.

Because creditors, collection agencies and other furnishers of information have to abide by so many rules under various consumer credit protection laws, it opens up avenues for lots of mistakes. This isnt anything you should feel responsible for because you have an absolute right to an accurate credit report.

Just because its negative doesn’t mean its accurate

This isnt to say I would advocate anyone not paying their bills. What I’m saying is there is a strategy for you and one for the people reporting information about you. If something is false or innaccurate, it should not be in your credit history.

If a creditor has sloppy record keeping or failed to record your payment history properly then thats an area for you to explore. Likewise, if a hospital or doctor’s office slammed your credit report with a medical bill without you ever seeing a bill, then obviously thats not a fair way to do business and you reserve the right to investigate that item to find out why.

This happens more than you would think. People go to refinance a mortgage or car and suddenly find a medical collection dragging down their credit score. In most cases, the person had no idea they owed the debt. In that scenario does it really benefit you to simply pay it and end up with a paid collection account on your credit?

It’s still negative. A paid collection account isn’t quite fair if you were never billed to begin with right? Why should you be penalized for their mistake? 

A good way to approach a situation like this would be to negotiate with the collection agency after your credit bureau dispute process. If the item is proven accurate through this dispute process, then its a good time for you to contact the agency and find out why a bill was sent straight to your credit reports without your knowledge.

Why weren’t you given the opportunity to pay the debt before it was sent to collections? Were proper steps followed by the collection agency or doctor’s office when the debt was incurred or written off. Was it an insurance deductible no one informed you about. Was it a 20% co-pay you were unaware of. Did anyone even bother to send you a bill. Is it a portion you aren’t even responsible for under your insurance plan? These are all things you should investigate.

What about other situations? There are Plenty! Is your debt legally expired. Has the collection agency re-aged your debt in an effort to collect it. Was the debt someone else’s obligation and you can prove it. Did the collection agency violate your rights by violating the Fair Debt Collection Practices Act? You see, there are no cut and dry issues when it comes to our credit reports. Every issue or potential issue can lead to victory!

Your goal isn’t to deceive anyone or escape your debts. Your goal is to use legal leverage and force the credit bureaus and creditors to do their job. Some times people think credit repair is shady or that perhaps you’re a bad person because you’re trying to fix it. Why? It’s not fraud or illegal. You are using your absolute right to make sure information contained in your credit reports is indeed correct.

A credit repair plan should always start off with this attitude. You’re not going into this because you’re trying to wipe away your existence, you aren’t trying to create a second identity or defraud anyone. You are doing what any average person should do and that’s an audit of your credit.

To get more tips on improving your credit or DIY credit repair tips, be sure to visit our credit library. There’s a lot of information in our article library about credit repair issues like expired statutes of limitations, validation of debt and dealing with bill collectors.