One in ten Americans are having their wages garnished according to Automatic Data Process Inc. Originally reported by MSN http://on-msn.com/1vbfT5F
While the MSN story is troubling to say the least. It’s even worse than MSN reported. Wages can be garnished up to a whopping 60% of a person’s disposable earnings. The highest percentage allowed (50-60%) applies to child support. Other types of debt can range from 15%-25% of disposable earnings.
The Federal Wage Garnishment Law, Consumer Credit Protection Act’s Title 3 (CCPA) www.dol.gov/whd/garnishment dictates what percentage can be garnished from an individual’s paycheck. The restrictions of “15%-60%” do not apply in all cases. Certain bankruptcy court orders and Federal or State tax debts have NO RESTRICTIONS!!
Before I go thru the specifics of ‘garnishments”, let me preface this by saying I am not an attorney. I am not giving you legal advice. This article is not intended in anyway to be “in lieu of”
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If you are getting collection calls for any unpaid debt that you owe, the best way to handle them is to speak to the collector and find out everything you can find out about that debt. Make sure the debt is your debt. Make sure the amount is something you remember that you failed to pay. Verify the amount owed is approximately what you thought you owed. If your initial review doesn’t sound like it’s your debt, tell the collector you are disputing the debt. Debt collectors may send a letter to the mailing address that they have on file asking you to validate the debt. Please do not ignore these letters. Review them for accuracy and if the debt is not yours, dispute it by responding to the letter and advise the collector. If it is your debt, be ready for the collection calls to start or be proactive and call the collector yourself.
Remember, if it’s your debt, it’s best to take the call and face it head on. But here are a few
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Types of Loans
There are different variations of consumer personal loans, signature loans and lines of credit. Each loan product may have different features and pay off requirements. The loan rates maybe fixed or variable and loans terms may vary. The personal unsecured loan maybe a useful tool for Debt Consolidation, large purchase, home improvements, car repairs etc.
Personal Loans are funded by your local bank or financial institution, these loans do not require collateral. Your credit history, income and your ability to repay the loan will be the primary factors to be approved for a personal loan.
Your Credit Score
Your Credit Score will be the number one factor that determines if your loan is approved and what your interest will be.
Debt To Income Ratio
You will be asked
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Debt Settlement is a legitimate industry that helps consumer settle their debt for less than they owe. However, there are still ways for unscrupulous companies to scam you. Watch and learn how to avoid getting ripped off by debt settlement scams.
Debt Settlement? The Good the Bad & the Ugly.
You see and hear it everywhere; settle your debt for half of what you owe. What are they talking about? What has just been described is called debt settlement. Marketers are quick to point out the big plus of debt settlement, which is paying your creditors less than you actually owe them. That’s where the good news stops. Debt settlement is an ugly financial solution and should only be considered by those in dire financial hardship. Debt settlement is only appropriate if you have fallen behind or it is inevitable you are going to fall behind on your minimum payments, and you don’t have any assets
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A budget is an important tool to help manage your debt. Not does budgeting help you get out of debt, it can also help you maintain a debt free life. Many people avoid budgeting their money because they assume it will put limitations on their spending. That’s not necessarily true. A budget is a way of practicing some much-needed self-discipline with your spending.
- Realize the importance of having a budget. The simplest way to think of a budget is as a plan that dictates how you spend your money. You make plans for other aspects of your life. Why shouldn’t you plan your spending? A budget can help you realize sooner when you don’t have enough money to cover your expenses. That gives you some time to come up with an cheaper alternative to making ends meet.
- Gather cancelled checks, bank statements, and receipts. Don’t try to make your budget completely from your memory. If you do it that way, you’re more likely to forget some numbers. Instead, use cancelled checks, bank statements, and receipts to help you figure
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Money Management Means Setting Goals
It’s sometimes said that saving money is a “lost art” – that, unlike our grandparents, we no longer have the desire or discipline to save for a “rainy day.” Thanks to easy credit and constant advertising, people today want things right away, whether or not they can afford it.
While it’s true that personal savings dropped to just 0.8% in 2008, the rate has since rebounded to 6.0%. What’s more, the highest rate of savings ever recorded (14.6%) was in 1975 – long after credit cards and other “easy” ways to borrow were introduced.
In reality, we simply have more choices than our grandparents did – more things to buy (computers, software and flat-screen TVs) and more ways to buy them. And because it is so easy to borrow, we need better ways to manage our money and stay out of debt.
Setting SMART Financial Goals
One of the best money management techniques is called SMART. It was designed to help you save for short-term, medium-term and long-term financial goals,
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Know Where Your Excess is.
One of the most important factors in managing a budget is to know where your extra money is. After doing budget planning of expenses vs. income take an unbiased look at it and see how much is left over each month. Of that amount you will want to put at least half of that towards your savings and the other half towards your cost of living.
When you objectively look at your budget plan you can see that you may have allowed more for a particular expense than it actually costs. Those funds should be kept as a rolling balance in your account. Just make note that there is X amount of excess to be applied where needed. Every once in a while a bill will run over what was budgeted for it and you will have the extra funds available. A separate account for your rolling balance may be necessary, this way you always know which amount is excess from budgeted expenses.
Also keep an eye on what expenses can be reduced if it’s necessary. Food out, dry cleaning,
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by Gary Foreman
When I send in my mortgage payment and I send in more than the minimum amount, the return payment stub asks whether I would like the additional payment to go towards escrow or principal. Which direction would be the best? Jim
Jim asks a very good question. How you manage your mortgage payments can make a big difference in your financial well-being.
Let’s begin with a little background about mortgages. Many of you will already be familiar with this, so just consider it a review.
When you take out a mortgage you’ve borrowed money. And, you’ve agreed to pay interest to the mortgage company for the amount of money that you owe. On all but a few mortgages, you’ll make monthly payments. Part of that monthly payment will go towards the interest that’s owed for that month. Another part of the payment goes to repay the amount borrowed (called “principal”).
Your mortgage payment may also include an “escrow” account. That’s where the mortgage company collects an extra amount each month from you. Then when your homeowners’ insurance or property
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Obtaining a credit report is an excellent way to begin taking control of your financial future. It’s recommended that you review your credit report once a year, not only to be aware of your standing with creditors but to also keep abreast of errors and fraud. However, once your report arrives you may have trouble making sense of it. How are you to read and understand a credit report?
There are three major credit reporting agencies that issue credit bureau reports; Experian, TransUnion and Equifax. It is recommended that you obtain reports from all 3 credit report agencies as they most likely contain varying information since creditors subscribe to agencies on a purely voluntary basis. The credit reports provided by each of the different bureaus may present somewhat differently but generally speaking the information will be broken down in much the same way.
There are four main parts to the credit report: personal profile, credit history, public records and inquires. Check each section carefully for any errors. Note any errors you may discover on a separate piece of paper as you read over your report.
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Delray Credit Counseling offers Debt Consolidation Services or Debt Management Plans (DMP). This is a program offered by most banks and finance companies through non-profit Consumer Credit Counseling Agencies
Facts on Debt Management Plans;
Debt consolidation services are for Credit Cards, Medical Bills and/or Collections Accounts. (No “secured” debts can be included. This includes house, or car payments, and any loans or accounts with collateral attached).
Only consumers having difficulty meeting monthly payment requirements or are unable to reduce their balances should apply. (This debt management program is not appropriate for consumers who are shopping for a better interest rate).
The Debt Management Plan may reduce or eliminate interest rates as well as stop late and over-limit fees. This program may also reduce a consumer’s overall monthly payment. Interest rates will vary depending on the creditors, but are usually around 6-9% and sometimes eliminated.
All of the debt consolidation services and benefits are extended by the credit grantors. Consumer’s payments must be made on time or creditors may drop a consumer from a DMP and not allow re-instatement. If this happens
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