Credit Talk

Are you in need of SPECIALIZED Debt Management (counseling)? Like many today I was under the impression that "traditional firms" such as Consumer Credit Counseling Service (CCCS), National Foundation of Consumer Credit (NFCC) member firms and other "non-profit" firms were the standard for the industry and that EVERYONE with a debt problem was best served by these groups. Boy!!!! Was I wrong! I discovered many myths based upon methods that are now essentially null and void. Yet many in the credit management industry don't want the consumer to know because it is not in the best interest of the major credit counseling players. In this feature and the follow up article referenced at the end, you will learn the truth… not the hype and self serving advertising you are use to. I will state emphatically here and now that I am not associated with any referenced individual or company for any form of recompense. What you read is simply the truth as has been presented to me.

The person who opened my eyes was Jim Young of Accelerated Debt Consolidation, Inc. He offered me incredible concepts rarely discussed by "traditional" firms. I appropriately labeled Jim's company (and any other similar agencies) "Specialized Debt Management". You will discover in this article the reason why the difference in labels and why the two are so uniquely different with their Debt Management Programs (DMP).

Non-Profit (NP) Does Not Improve Interest Rates

The first issue that Jim brought to my attention was that reduced interest rates consumers receive from their creditors are EXACTLY the same whether the client uses a For-Profit (FP) or a Non-Profit (NP) firm. For example, if a client owes Chase Bank $10,000, Chase requires 2% of the balance or $200 per month as a minimum payment in the DMP and they offer 6% for the debt management interest rate. This is what a client of a debt management firm would get whether the proposal submitted to Chase came from a FP or a NP firm. It was also brought to my attention that this "universal umbrella" of NP as it relates to credit counseling and debt management was not all it was cracked up to be.

NP Myths Built Upon Extinct "Fair Share" Concepts

After some research I found out that some of the firms with the worst records in the business were in fact Non-Profit (NP) and making very large amounts of money. These groups were about as "Non Profit" as Donald Trump. Mr. Young explained to me that for many years credit counseling and debt management firms received what is known as a "Fair Share" distribution from the creditors. This in no way affected what the clients paid or how much was credited to their accounts but it was in fact quite significant in the debt management firms earnings. For example, in the past debt management firms could deduct 12% of a client's payment going to American Express for Fair Share. So if a clients payment to AMEX through the program was $100 the firm could deduct $12 and send AMEX $88. The clients account at AMEX, however, was credited the whole $100. Thus the debt management firm received some serious earnings.

Creditors paid only "Fair Share" to NP groups that could then be a tax write-off for "contribution" to a NP organization. There is absolutely nothing wrong with this concept and it did not affect what the clients accounts were credited. But "Fair Share Distribution" from the major creditors has since been dramatically reduced and it is clearly not as much of an issue as it once was.

Capitalizing On The Myth

In the early to mid 90's debt management firms began springing up all over the country. Many started using their NP status as a marketing tool, allowing prospective clients to believe that they were some form of public service. This led the consumer to believe clients would get their services for less because they were NP or operating as a "Benevolent Charity". As was stated above, the truth is that interest reductions and minimum payments are EXACTLY the same regardless of counseling agency. The only difference would be in the fees charged (and services provided). There were large variations in the area of fees. Not all but many firms (both FP and NP) retained the client's first payment as a set up fee. Though consumer advocates frown upon this practice, some firms still performed well. It is a practice that could be done when all creditors re-aged past due accounts to a current status after the proposals were accepted. Some creditors like Citibank and Discover no longer re-age delinquent accounts so retaining the client's first payment has become a problem.

NFCC and CCCS

As the years went on I looked into NFCC membership. It seems that NFCC member firms are all CCCS offices. Some of them have different names like The Green Path, Money Management International which is now the parent company over CCCS and Clear Point Credit Solutions. So although I am not absolutely sure that they are the only members, it seems that the NFCC really may have only one member because every NFCC member firm I have researched seems to be connected to CCCS or in fact is a CCCS. If this is true, it seems a bit convenient to have financial advisors all over the country saying "Make Sure They Are An NFCC Member".

In my experience as Credit/Debt Management guide, I still believe that NFCC member firms (CCCS) do in fact perform very well for consumers that have debt problems. They do offer fine educational materials free of charge and have many years of experience at helping consumers get out of debt.

Reader Feedback On Traditional Policy

Over the years many consumers have written and explained how these "Traditional" services are in actual practice. Let me share what they have told me from their own persona experiences. After an initial CCCS or "Traditional" consultation if it is determined that a consumer is in need of a debt management plan or "DMP" and is qualified for it, another appointment is scheduled. A very reasonable set up fee of approximately $40 is charged if the client intends to enroll. Of the $40 fee $12 is used to obtain a copy of the clients credit report. Based on reports from consumers that wrote to me, it appears that the rationale for the credit report is to reveal ALL ACCOUNTS that the consumer has because these firms require clients to close and or INCLUDE all revolving accounts in the DMP. In the past many CCCS offices did not enroll clients that were current on their accounts and would not enroll clients unless they were at least 30 days delinquent. I have received reports that some CCCS offices still do not enroll clients in DMP'S that are current on their accounts telling them that no hardship exists. The reason for the delay is that disbursements to creditors are only made twice a month instead of daily. This causes a problem in billing cycles if the client is current because he or she may have 8 accounts in the program with various due dates. If a client was current on all accounts when he or she enrolled in the program and steps were not taken to adjust due dates prior to enrollment, this would cause some accounts to be late if payments were not disbursed in accordance with the clients due dates. This also relieves the debt management firm of any liability as it relates to the clients credit because the client was already behind when they enrolled. Many CCCS offices also engage in a "Credit Card Cutting" ceremony of sorts where the client is required to bring in all credit cards and cut them up. I find this to be a bit of an undignified process to subject someone to. It has also been reported that their client agreement includes a section requiring DMP clients to DESTROY ALL CREDIT CARDS and close all open lines of credit and they must also agree that they will not apply for any new lines of credit while enrolled in the program. I agree that when someone has a debt problem they may also have a spending problem so agreeing to abstain from incurring any additional debt may be a good policy for many who have reached the point of severe delinquency and credit deterioration. However this may not be the only option for a consumer that may have incurred some debt due to situations out of his or her control that needs help while still requiring some lines of credit for work, business and emergencies.

The Good, The Bad, The Ugly

In fairness I will state that in my years of advising consumers on debt problems I have heard many positive reports about these traditional Credit Counseling firms and have never heard any reports of anyone being misled or being taken in a fraudulent manner, as is the case with many other firms. However I have received many reports from consumers stating that they could not utilize such a program due to the lack of flexibility for their needs. I have also received reports about billing cycle problems related to creditor disbursements as a result of not taking steps to coordinate due dates and the resulting problems from not disbursing payments to creditors daily. Also, I am aware of complaints about face to face in-office appointments without the option of handling it over the phone. The most common complaints I have heard about these traditional debt management programs is the lack of flexibility and a feeling of being "put on probation" while in the program.

Summary of Traditional Services

Here then is a summary (good and bad) of traditional debt management services: They provide valuable educational materials They can reduce interest rates on accounts and get delinquent accounts re-aged If you stay with the program you will be debt free in a much shorter time period than on you own You will be required to close all existing lines of credit You must agree not to open or use any lines of credit Very little if any steps will be taken to minimize credit damage When you complete the program your credit rating will improve Upon completion you should be able to obtain new credit You may have to be delinquent on accounts for acceptance You will have the convenience of just one monthly payment You may be required to attend 1 or 2 in-office appointments When reviewing the results of the traditional program above it is clear that this would be a very beneficial program for someone overloaded with debt, possibly delinquent on the payments and who has demonstrated a lack of control over spending and who has deteriorating credit worthiness. A consumer like this would benefit from a program that prevents him from falling further into debt and also offers some "supervision" preventing further misuse of credit while helping this consumer to get out of debt much faster. But where does the consumer go that has good credit, needs to maintain lines of credit to function, is current on his accounts and/or wants to maintain his credit? For that answer please see the follow-up article Specialized Debt Counseling.

Did you have a piggy bank when you were a child? I did. Mine sat empty for a long time until my mother convinced me that I should really start putting my pennies and nickels into it in order to save my money for when I was older and wanted to buy something.

So, I did. I had about forty cents on me from the sale of some baseball cards to one of my friends (probably a Reggie Jackson Rookie Card or something worth thousands today) and I plunked it into the piggy bank to save money for "when I was older." The next day I went to my mother and asked her, "How do you pray?" She was definitely taken aback by the question (I was probably five or six years old at the time), but gave me a long religious discussion about talking to God and waiting to hear an answer, the whole nine yards. I was puzzled by this response and asked my next question, "But how do you pray open?" She asked what I meant, so I went and got my piggy bank to show her the disc on the bottom which had a small slot perfectly sized for the insertion of a flathead screwdriver, upon which was stamped the phrase PRY OPEN. I was, after all, a day older and I wanted my forty cents for the ice cream man.

Too many people seem to have this same, childlike attitude toward saving money. They may open a savings account or even a CD account with the best intentions of saving money until they're "older," but find themselves making more withdrawals than deposits and, in the case of CD's and IRAs, sometimes paying hefty penalties to the bank. If you're one of these people, I implore you to stop.

Put down that screwdriver (withdrawal slip), and walk away so you can save money. The ice cream man (or new TV, stereo system, DVD player or whatever) may look pretty good now, but you'll probably want to have those funds when you're older and on a more limited income. Don't pry open your bank account

When you're looking for a loan, it might seem easy to simply accept the first loan offer that you receive. While it's true that you might receive a good deal on a loan this way, there's an even greater chance that you'll end up missing out on a better offer

You need quick cash but do not want to pledge anything as collateral. Well let's see what the options are around. A fabulous friend, humble kinsman or someone beloved? Well, they are the age old options to which you are going. Now, think something different, which is equally motivating and helping. This will lead you to instant unsecured loan, a loan that is made to meet all your needs and is easily available.

The first and the foremost thing you should know about an instant unsecured loan is that it is available without placing any kind of collateral for the loaned amount. No need to show the value of your car or home as you do in secured loan. In instant unsecured loan, it is the lender only, who will primarily bear the risk.

You can gain instant unsecured loan for any cause and reason. It could be the repairing of your home, financing higher education of your daughter or buying a posh car, if you seek money, you are fit for this loan. Again no matter if you are bad credit holders. Bankrupts, CCJ holders, defaulters can always go for this loan easily and conveniently.

You can avail instant unsecured loan at an amount ranging from £5,000 to £25,000. Though the money is quite reasonable, still it is less than the amount of secured loan, which you can get at an amount of £5,000 to £1,00000, which is quite higher than unsecured loan. Again, the repayment term is less and rate of interest is quite high in instant unsecured loan compared to secured loan. It is because of the fact that here the loaned amount is accessible without placing anything as collateral. But competition is constantly going on in the market. Take advantage of it, research properly, work out on risks and possibilities and be in touch with a lender who can offer this loan at a reasonable rate of interest and repayment period.

Now, you could access instant unsecured loan with the help of any lending organizations, financial institutions or banks. Search their addresses, stand in the long queues and fill up unending application form. But if you like a change and want to apply quick, safe and sound, online method is the right pick for you. Here, you can get access to all updated informations and can meet innumerable trusted lenders. Through this loan, you can opt for only smaller sums. This is quite reasonable, but if you look closer, you can access the limitation that lies beneath the amount. Again, the repayment term is also not as wider as secured loan. This is primarily because of the reason that unsecured loan does not demand any collateral as security for the loaned amount. All such reasons ultimately contribute to the rise in the rate of interest. But it is not going to happen all the time. If you research properly on different lenders and their offers, surely you can get a lender who will give you the loan at a lower rate of interest in comparison to other lenders.

If you die without making a Will in the UK, the state will decide who gets what and how much, so those who you would want to benefit may get far less than you hoped.

Your estate (your property and all belongings) are frozen and become subject to the law of intestacy. You are said to have died 'intestate', meaning everything you own will be valued, tax paid at 40% if worth more than £275,000 (as at August 2005) and then shared out to your surviving spouse or relatives or given to the state if you don't have any.

The problem with this is that neither you or your family will have any say in the matter if you didn't make a Will. The beneficiaries and the share they receive will be decided by the state and the whole process can takes months or even years because you didn't take the time to make a Will.

Whilst the law and complete strangers decide how your belongings are shared, your surviving spouse or partner has all the usual household and living expenses to pay. If you are the main breadwinner they will probably be on a reduced income. Your surviving spouse or partner may not have access to money, she or he would normally have a right to if you had made a Will, because the assets could be frozen until all the formalities have been sorted out. If you have got a valid Last Will and testament it should take no longer than three months to complete the legal process and release your assets to the people who you chose.

<b>So Who Gets What if You Die Without Making a Will?</b>

When someone dies without making a Will or Last Will and Testament, their estate (all their property and belongings) are distributed according to the law of intestacy. This is where, in effect, the state writes your Will for you and is most likely not to meet your wishes. The following outlines the basic rules that decides who gets what:

If you are married at the time of your death

Your spouse will get everything if you left less than £125,000. If more than £125,000 is left but you leave no children, parents or siblings, then your spouse will still get everything.

If you are married with children at the time of your death

If you die leaving a spouse and children, then your spouse will get the first £125,000 and your personal effects. The remainder is divided as follows: your spouse gets a life interest in half and the other half is divided between your children. A life interest means that your spouse is entitled to the income on that half for their lifetime and on their death it will automatically pass to your children.

If you are married without children but have parents or siblings

If you die with no children, but have surviving parents or siblings, then your spouse gets the first £200,000 plus personal effects and the remainder is divided two ways. Your spouse will get half and the other half goes to your parents. If your parents have pre-deceased you, this share is divided between your siblings.

If you are not married at the time of you death

<li>If you leave children then it will be divided equally between them.</li> <li>If there are no children but your parents survive you, then everything will go to your parents.</li> <li>If there are no children or parents, then your siblings will receive everything.</li> <li>If you leave no children, parents or siblings, then your grandparents will get everything.</li> <li>If none of these people are still alive, then it will be divided among your uncles and aunts.</li> <li>If there are none of the above then your estate will pass to the Crown.</li>

<b>Notes:</b>

When using the term 'children' this includes illegitimate and adopted children but not step-children (unless legally adopted). Joint property generally passes to the surviving joint owner.

It is not possible for everyone to afford a new automobile; such people can go for used automobile. It is true that used automobile are cheaper than new automobiles but still the person may face some financial hurdles in buying a used automobile. So, in order to overcome those financial hurdles, the person is only needed to avail used auto loans.

Like other loans in the financial market, used auto loans are also available in two flavors that are, secured used auto loans and unsecured used auto loans. In secured used auto loans, there is a need to place collateral against the loan amount. And, this collateral also enables the lender to offer low and competitive rates. On the other hand, in unsecured used auto loans, there is no collateral involved. Rather, certain proofs are needed to be provided such as employment proof, regular flow of income, financial status, credit worthiness etc. These proofs are only security for the lender regarding the timely payments of the installment.

In the present scenario, there are many lenders in the financial market who offer used auto loans on competitive rates. In addition to the lenders in the physical financial market, there are many online lenders who offer better rates. Here, better rates imply low and competitive rates. When the person applies for used auto loans, he is only needed to surf on the internet and locate the lender offering used auto loans. After locating, he will be asked to fill an online application which asks for certain personal and financial details. And in return of that the lender gives a loan quotation which carries the brief estimation of prices. Comparison also becomes easier through loan quotation.

Used auto loans are also available to all the bad credit scorers. But, the only difference is that they are always offered with comparatively high rates, however they are also competitive in the financial market. People with bad credit score must always try to timely repayments in order to improve their credit score. And if somehow, they fails to make timely repayments then this can affect his credit score adversely, which further will emerge as hurdle in procuring funds from the market.

The person must always try to make high down payment, which as a result enables the lender to offer competitive and low rates. High down payment also reduces the financing amount, thus low amount of loan is availed, which is easy to repay.

Therefore, used auto loans provide financial assistance in buying a desired automobile.

Selecting the Advanta Life of Balance Platinum Card will provide you with some ideal choices and rewards. If you are looking for an affordable credit card that provides for excellent rewards, then this may just be the right choice for your needs. The Advanta Life of Balance Platinum Card actually gives you some options to consider. When it comes down to it, you need options in life.

The Benefits

First off, you will have an introductory interest rate of just 2.99% on balance transfers that you make during the first three months that you get the credit line. In addition, this rate will hold until the balance transfers are paid off in full. But, when you do consider that the interest rate on this credit card is a mere 9.99%, you can easily see that there are rewards in just having it. This APR of 9.99% is variable and applies to both purchases and cash advances, something that is very unique in the credit card world. There are no annual fees and your grace period is just 20 days. The good news is that there is no maximum credit limit, which means you will get what you deserve here.

Rewards

The Advanta Life of Balance Platinum Card offers some excellent rewards as well. You will earn between .25% and 6% rebates. You choose how to benefit from rewards. Some options including gasoline, computer equipment, office products, building supplies, utilities and others. You earn your rebate based on how much you spend as well. For up to $10,000, you will earn .5% all the way up to 6% on purchases up to $40,000. There is no yearly limit on how much you can earn back and there is no expiration either.

To get the Advanta Life of Balance Platinum Card, you will need to have excellent credit. You should consider which reward program works the best for your needs. You will be able to cash in your rebate checks when they reach $50 and use as you see fit. This is an excellent credit card both for the rewards as well as for the low interest rates.

Wells Fargo online banking offers many of the features you would expect a bank to offer. In addition to the ability to view your bank accounts, pay your bills, and keep up-to-date with your loan payments, Wells Fargo online banking offers customers something even more important: convenience.

That's because when you choose to go the Wells Fargo online banking route, you no longer have to spend your lunch hour doing your banking. You can sit right at your desk or anywhere you have Internet access and find out everything you need to know about your money. And you can find it out regardless of the hour or the time zone you're in.

Need to make a mortgage payment but don't have your coupon book? No problem. Away on vacation and had a little too much fun and now you need to transfer some money from your savings account over to your checking account? That's no problem either! Want to calculate loan payments or trade stocks and bonds? Once again, when you're set up with Wells Fargo online banking, you can do almost anything you would normally do in person. You can even order new checks and get stock quotes. In addition to consumer and business finances, Wells Fargo also provides investments and insurance.

Running a business is hard, but your business banking doesn't have to be. If you have your business banking set up with Wells Fargo, you'll be happy to know that the same activities and monitoring capabilities are available for business customers.

If you haven't already signed up, you're missing out on an incredible opportunity. Anyone who has an account can start taking advantage of the many Wells Fargo online banking features right now. There's no cost to enroll in this program and you need not worry about security either. The Wells Fargo online banking site is secure and you can confirm this by looking for the yellow security padlock on the bottom of the screen.

When buying a home there are many tax benefits you can take advantage of, including a mortgage tax deduction. Besides a real estate deduction, a mortgage tax deduction can be a great benefit. The only main qualifier for the tax deduction is that the amount, including for the primary and any second residence is less than $1.1 million.

Something that needs to be considered when trying to qualify for a mortgage tax deduction is that any home loans before October 14, 1987 are exempt from the previously mentioned limit. Loans that were taken out before this date can qualify under the tax reduction no matter what the size of the loan. Also if the loan was taken out before this date it can qualify for the deduction no matter what the use of the loan was for.

When it comes to the mortgage tax deduction there are some advantages in terms of the total acquisition indebtedness as well. First of all let's explain what the total acquisition indebtedness is. It is the money that you borrow to buy, build or improve on your home. Basically the same rule applies to qualify in this matter. Any one that was taken out after October 14, 1987 can only be allowed up to $1.0 million, where those who took one out before have no limit.

An interesting fact in regards to home loans and what could effect your qualifying of the mortgage tax rebate is that you can borrow up to $100,000 of the equity of your house and use it any way you'd like. In this instance, if you bought before 1987 you will not get a better in deal in this matter. Since if you did buy before 1987 if you borrow on the equity you can only use the money for home improvements.

One new thing that has happened in the instance of mortgages and tax deductions is that is no longer allowed to borrow with no limit. This means you can no longer borrow on your equity with not limit and benefit by using it for whatever you want. This also excludes you from making unlimited deductions on any equity you may have borrowed upon.

Another new thing that perhaps is a good thing is in regards to being able to draw on your equity like a credit card. There is a limit on it now but they can borrow when they need to, without all the hassle of taking out specific loans and the ensuing paperwork. This type of loan can qualify in terms of a mortgage tax deduction.

Being able now to fully understand what types of loans and mortgages that can qualify you for certain deductions can help you best take advantage of any benefits related to tax breaks. Having the option of a tax rebate can greatly increase your chances of saving money.

In today's world, it seems that almost any topic is open for debate. While I was gathering facts for this article, I was quite surprised to find some of the issues I thought were settled are actually still being openly discussed.

You may not consider everything you just read to be crucial information about Bad Credit Home Loans. But don't be surprised if you find yourself recalling and using this very information in the next few days.

What is bad credit home loan? It is a loan that one can get despite having a bad credit rating. One has a bad credit rating when one has a low credit score. Many lenders offer a bad credit home loan beacuse they know fully well that their loan is secure, since it is taken on mortgage of your home.

A bad credit home loan is an instrument of opportunity for those who have bad credit rating i.e. those with low credit score and would like drop out of their debt and start on the road to building good credit. By getting into a bad credit home loan, you can lower your monthly payments by consolidating all your debts and also enjoy a lower interest rate on the current debt. This is a major step towards credit repair as you are now able to pay off your current debts by taking up a bad credit home loan. Moreover, if you can keep up the payments on your second home loan for about six months to a year, you will see a remarkable change in your credit score.

There are many options available out there on bad credit home loans. The most popular options available on bad credit home loans are cash out mortgage refinance and home equity loans. Both options allow you to cash in on the equity already paid into your home mortgage and use it to get yourself out of debt. It's best to deal with a mortgage company online to avoid bank associate's talk around and skepticism. Its also easier to compare various offers form different lenders to make sure you are not being cheated. While filling up forms for online mortgage, bear the following points in mind:

1. Be prepared to read as many articles on online mortgage as possible at the bad credit home loan lender's websites. You need to educate yourself on various types of financing and be informed and up to date on fees and current lending rates before you take the next steps.

2. When applying for online quotes, do not opt for a generic estimate which is based on you monthly income and bills, fill out detailed information whereupon you can get a real accurate quote.

3. Get to the total bad credit home loan cost i.e. including the closing fees, application fees, any other charges, interest charged, amortization and loan fees etc.

4. After applying, do not forget to keep all records received from the lender and follow up with weekly phone calls to make sure things are moving on time.

5. After completion of bad credit home loan, plan to refinance in about three years, by which you should be back in good credit, if you have kept up regular repayments. This will help in reducing your short time debt and maximize your future credit rating.

Use your bad credit home loan to the maximum advantage to get your credit rating back in line. This will help you plan a secure future for you and your family. If you do this well, you will be on your first step towards financial freedom.

Take time to consider the points presented above. What you learn may help you overcome your hesitation to take action.