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“Dear Steve,

I filed chapter 13 bankruptcy and little to my knowledge my attorneys who represented me did not clear my credit after the filing or even in the process so in essence I still have all the listings of old creditors on my credit report and it’s a bit tasking to have them removed.

Any suggestions on how to do so? My credit score has not increased even after filing actually the calls has just stopped and I’m still in ChexSystems so what’s the purpose of bankruptcy if there is not a reflection of it to clear your credit and increase your credit score?

Do you know a great attorney that actually will clear your credit in the process?

I did see the physical results in my bankruptcy however, I desire my credit report to represent the “paper effects” of it as well.

Bre”

Dear Bre,

Wow! I’m stunned that you thought that going bankrupt would somehow clean your credit report and improve your credit score. It won’t. In fact bankruptcy adds another big negative item, bankruptcy, to your credit report and lowers your credit score in the short run.

Let me use a school analogy to help you better understand your credit report. A credit report is not like a report card, it is more like a transcript. The transcript lists all the classes you attended and the grades, good or bad, that you got. Dropping out of school does not wipe the records off your transcript. Going bankrupt does not remove negative but accurate items off your credit report.

I am very surprised that throughout your discussions with the bankruptcy attorney and the pre-bankruptcy credit counseling that this was not clarified for you.

Now that you have gone bankrupt there are ways to repair your credit and improve your credit score.

1. Get a copy of your consolidated credit report and look for any negative but inaccurate items that are listed. Use the dispute procedure shown in this credit report and have those items removed.
2. To rebuild your credit score you will need to start having good information reported on your credit report. To do this you will need to get a major credit card that will both give you a card and report to the credit reporting agencies.
3. There are credit cards available for people with bankruptcy on their record.
4. As you continue to pay your new account on time and more time passes from your bankruptcy, your credit score will improve.

Big hug.

Steve

Source: Bre Wonders Why Her Credit Report Still Shows Negative Items That She Thought Should Have Been Removed By Going Bankrupt

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Ted gave me permission to share them and I hope they either put a smile on your face or make you ponder.

Source: Credit Card Approval - Just Because You Need to Laugh

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Is having and using a credit card a right or a privilege?

WC - A 27-year-old writer living in Chicago and writing about personal finance through The Writer’s Coin.

This one’s easy: this is a service. So if I had to pick I would say it’s a privilege.

When I was a kid I couldn’t understand the logic behind credit cards. My dad explained it to me and I was shocked: why would a company front you the money for something you don’t have the cash for? Well, because they’re going to make money off it, that’s why. No one owes you a credit card and you shouldn’t expect that. It is NOT a right.

Antisay - This blog is mainly about finance and self-improvement; I am in a constant race to become a better me and this blog is all about that sort of lifestyle. Visit this site.

In my opinion, owning a credit card is a privilege. By definition, a privilege is, “a right or immunity granted as a peculiar benefit, advantage, or favor.” Credit cards are grated only to those who qualify - in theory, anyway. I remember applying for a Victoria Secret store card when I was 18 and being declined because I had no credit history. Once I had a credit history, I was able to get a card with them, but with very high interest rates because I really hadn’t proved my financial self to the world yet.

Having a credit card is a privilege granted when we show that we can be responsible with money. The fact that the credit card companies have lowered their standards significantly in the last decade or so doesn’t change the fact that it’s a service they provide to those who qualify - not a service that they provide to anyone who wants it.

If you have a credit card, it is still a privilege to use it - not a right. If you go over your limit, it is not your “right” to spend more than you’re allowed, and you will get a penalty as a result. And if the credit card company decides they no longer want to lend to you, they can terminate your line of credit. If you abuse the privilege, it will be taken away or you will suffer the penalties.

As a privilege, it is something that should be treated carefully and respected - just like the privilege of recess in elementary school. If you abused the privilege by punching the kid next to you, it was taken away… and so we learn not to punch other kids. And just the same, we have to learn not to overspend or rely on credit too much - lest we find ourselves with a severe penalty. The card might not be taken away from us (unfortunately), but we’ll suffer all the same with late fees, interest, and hassling calls all the time.

I don’t really know how to conclude this - I’m left with final thoughts somewhat unrelated to the topic. Except to say that I wonder what is going through the minds of people who demand credit cards when they don’t qualify? Do they think that the card is their right? I am happy when people are rejected for cards - because I know that they won’t be able to hurt themselves more by overspending themselves into oblivion and then suffering debt misery for the rest of their lives.

Steve Rhode - A personal finance blogger and founder of the Myvesta Foundation, a global social enterprise that helps people find solutions for money troubles. You can ask Steve your debt related question through GetOutOfDebt.org and he’ll help you for free.

I believe that getting a credit card is a privilege since it is something that you must apply for and be awarded or granted access to by another entity.

I think that, rightly or wrongly, many people treat their credit card as a right.

So if having a credit card is a privilege then how much weight can we place in the screams of consumers that feel abused by creditors when the consumer put themselves in that position to begin with? And if it is a privilege and it is issued to generate revenue then isn’t it the banks ethical responsibility to use that tool to maximize revenue for the bank in any way legally possible, even at the expense of the financial well-being of their customers?

But then again, aren’t consumers eligible for fair treatment and regulatory compliance by banks. If they are, then once you get and use a credit card it comes with some rights.

J. Money - You’ll enjoy the blog Budgets Are Sexy for a look inside the life of one blogger and how money impacts it.

It’s a privilege baby! A privilege 99% of us Americans have, but it sure as hell isn’t a right. If it were EVERYONE would be able to have (and keep) one - and these days that’s simply not the case….plus look around at the rest of the world - not even close to what we have going on here. I have not way of backing this up, of course, but i’m sure it’s true.

So if you’re lucky enough to get your hands on a GOOD credit card (like with low interest rates), then cherish it and use it wisely my friend. If you get caught dicking around, it may haunt you for years to come - and that’s no fun for anyone.

Marcus - The creator of the CreditMattersBlog, this blogger has a deadly sharp point of view when it comes to consumer debt issues. Visit his blog.

If anyone says that it’s a right, I’ll be shocked.

Of course, it’s a privilege. But before you can earn the privilege, you must first be approved for a card. Indeed, we all started out with a clean slate. None of us could prove our creditworthiness from the get go. Therefore, our first card is typically granted without us having to prove a thing.

Beyond our first card, though, it is a privilege to get additional cards. No one is guaranteed the right to get approved for a credit card. Indeed, we must earn that privilege by demonstrating that we can handle additional credit. Still, even if we’ve shown that we’re capable — and responsible — there are no assurances that the card companies will continue to extend credit to us. For whatever reason, a card company could withdraw our credit lines (in the form of credit-limit decreases or closures). If that happens, you’ll then realize that it was always a privilege to have the card in the first place. Fact is, if it was a right, the card companies wouldn’t be allowed to take the credit away.

That’s my two cents on the topic.

Dawn - Iowa Hippie Chick blogs about money love and marriage and offers so very insightful posts on personal finance that involve emotional insight and awareness. Vist her blog.

This question is a no-brainer …
Having a credit card is a privilege!

It is a privilege that we earn by handling our personal finances responsibly.

I suppose, it’s similar to the privilege of driving - If not handled with care it should be taken away. Thus keeping the rest of us safe from irresponsible users!

Patrick Bryan - Living in Northern Ireland, Patrick helps people in a very different environment and economy but yet, much is universal and much is the same. Visit Patrick’s Northern Ireland blog on debt.

Until the constitution is amended to include ‘the right to get into debt’ I feel you would have to describe a credit card as a privilege rather than a right. It is a commercial decision for a credit card company to issue someone with a card – in essence they decide if they are a good risk to repay the money lent, and if there is a profit to be made from the relationship.

For many of us credit cards are a great benefit providing convenience, reduce the risk of carrying cash and provide interest free credit for up to 56 days. Until debit cards came along nothing could beat the benefit of having a credit card in your wallet, and if you use them ‘responsibly’ then I believe that we should still consider it a privilege to own one.

Unfortunately it is when people fall behind with credit cards that the dark side of our flexible friends is revealed. High interest charges, late payment fees, retroactive application of interest charges, two-cycle billing – I could go on. It is for this reason the Credit Cardholders’ Bill of Rights was proposed. The capricious nature of credit cards is that even though they are inanimate pieces of plastic they can assume magical powers, transforming themselves from a helping hand which pulls you out of trouble into a shove in the back when you are teetering on the edge of a financial precipice.

So, rather than defining a credit card as a ‘privilege’ or a ‘right’ I would prefer people to regard them as a form of ‘luxury debit card’ – a way of spending money in a safe and convenient manner, but which has to be paid back when the bill arrives each month. And if you can’t trust yourself to do this on a regular basis then it is probably best if you just use a regular debit card instead, and keep your credit cards at the bottom of your sock drawer, or locked in a high tower and guarded by a dragon.

Source: Is a Credit Card a Right or a Privilege? - Personal Finnance Bloggers Question of The Week

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Reducing the principal on mortgages is “a last resort,” says Paul Koches, executive vice president at Ocwen Financial Corp., a West Palm Beach, Fla., loan servicer that has shrunk the amount owed on 10,884 delinquent mortgages as of Sept. 30. That is 23% of all the loans modified by Ocwen so far this year.

Ocwen estimates the company’s foreclosures result in an average loss of $122,000, or 59% of the loan amount. The figure has more than doubled since last year, causing Ocwen to look harder at lowering principal payments.

Early trends are encouraging. A recent study by Credit Suisse found that roughly 12% of Ocwen borrowers who had their loan balances reduced in April were at least 60 days past due five months later. In comparison, the default rate on less-aggressive loan modifications was 22% or more.

Read the rest here.

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Even though the Federal Reserve has lowered its rate to 1%, banks are raising your interest rates in hopes of making a bigger profit. Oh yes, they are raising your fees or charging news ones as well.

At a time when the government is pleading for consumers to return to consuming, the banks are instead dissuading people from doing this by punishing consumers with higher fees and charges. And at the same time the banks are getting billions of dollars in bailout money to help get this economy moving again. It almost sounds damn near unpatriotic.

And let’s be clear about why the banks and credit card companies are scrambling to make these new revenue streams and profits. It is because the brightest and most financial savvy banking minds of our time swindled themselves by buying and insuring crap loans that inflated housing values and now result in record numbers of foreclosures. That’s some damn smart banking.

So the banks losses are the direct result of their own ineptitude and you are going to pay for it with higher credit card fees and charges.

What Credit Card Companies Are Doing

I would not be surprised at all to see monthly payments for cardholders to increase significantly as more creditors take the Chase lead to increase monthly minimum payments from where they are now. It is a quick win to increase their cash flow and will likely result in higher losses, but more cash now, when they need it.

Here is an example of what it can mean to you:

$10,000 Card Balance
Old Minimum Payment: $200/mo
New Minimum Payment: $500/mo

Imagine if all your cards did that to you, which they legally can. Many monthly budgets would be torpedoed leading to missed or late payments, but wait, that generates more fees to the credit card companies. Me sees a plan.

The banks will claim that by raising the monthly minimum payments that it is in the interest of the debtor since it will help the consumer to pay their bills off faster and get out of debt sooner. Truly this is nothing more than raising the hurdles higher and then saying it is better for runners who now have to jump higher.

Credit Cards Still Available

You should not get the impression that credit card accounts are not still plentiful and available. Just look here to see what is being offered.

While credit card companies are going to punish and raise revenue on its current crop of hostages, ah, customers, they are not going to stop extending credit. It’s what they do.

That is a good news, bad news situation. If you are stuck with a bad card with horrible rates and terms, it is still possible to switch. Granted, with credit standards toughening it is harder to switch of you have bad credit.

Source: Credit Card Companies Are Coming For You. Protect the Wife and Children.

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The hijackers have a favorite part of the coast to park their ships while they await the ransom to be dropped from the sky, in cash. On last count there were 13 ships parked and awaiting ransom to be paid.

The new pirate business is improving the money generated by local merchants on shore. Each day supply vessels come to shore to by new supplies for the pirates and their hostages. Small businesses have no problem extending credit to the pirates since they are paid in full once the ransom is delivered. Best yet, the pirates pay their bills in cash.

One local merchant said she is so confident in the pirates, she instituted a layaway plan just for them.

“They always take things without paying and we put them into the book of debts”. “Later, when they get the ransom money, they pay us a lot.”

I guess the pirates have just not figured out they could get reward credit cards to use to pay for hostage goodies. That way they’d get free air miles without blackout dates.

Source: Somali Pirates Are a Good Credit Risk. Maybe They Need An American Express Card?

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Income from the GetOutOfDebt.org site advertising is used to help alleviate poverty. If you would like to help me to help others, there are easy and free things you can do, click here to learn how you can help.

“Dear Steve,

I am disabled and falling in debt faster than i can handle. I am barely staying alive with trying to feed my family. I am behind on my mortgage and regular bills (utilities). I stopped paying on my credit cards just to try and keep my utilities from being disconnected. credit card companys are calling me constantly for there payment. I don’t even have the money to pay the lawyer for claiming bankruptcy. I don’t know where to turn. please help !!

What can I do???

Ed”

Dear Ed,

You’ve done the right thing by stopping payments to the credit card companies. You need to focus your repayment efforts on the mortgage and utilities at this point.

What I don’t know is if you can reasonably expect to be able to afford your mortgage any longer. It might just be that will your reduced income that you can’t afford the home. In that case you should give the home back to the bank and then go bankrupt to eliminate all your past debt, including any money the bank may want from you following the foreclosure of your home. I am assuming that you have little to no equity in your property.

At that point you can stop running for cover all the time and just focus on building a safer financial future for you and your family using what you’ve got coming in each month.

There are self-help bankruptcy materials available and you can usually get free bankruptcy forms from the local bankruptcy court.

If you decide that you can move then you can stop making the mortgage payments to save a rent deposit and to file for bankruptcy. That should allow you to do what needs to be done.

Big hug.

Steve

Source: Ed is Disabled and Falling in Debt Fast. What Can He Do?

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Income from the GetOutOfDebt.org site advertising is used to help alleviate poverty. If you would like to help me to help others, there are easy and free things you can do, click here to learn how you can help.

“Dear Steve,

I am a single mom and heavily in debt. I was living with my husband (we are legally separated) because of finances but recently I moved out. I am not behind on my payments at this time because I didn’t have to pay rent, utilities, etc. It is only a matter of time before I can’t make my credit card payments. I don”t know what I should do. Help!!

Should I file bankruptcy?

Trisha”

Dear Trisha,

Your situation is fairly typical. When a couple splits they now have two households to maintain on the same income they used to maintain one. Divorce and separation is often the event that leads one or both partners to bankruptcy.

I suspect that the only reason you are not behind yet is that since you recently moved out, all the new payments have not hit yet, or that you are using what little saved money you might have to make ends meet.

I think that you should use this event to not only start your marital life over but your financial life as well. If you do decide to go bankrupt it will eliminate and debt in your name and remove your liability to repay any joint debt that he has said he would pay.

The most important thing to remember about divorce is that even if he agrees to pay a debt that you might be jointly responsible for, it is still your responsibility to repay that debt if he does not. When you get divorced, you divorce your spouse, not your creditors.

Before you make any decision and certainly before you send any more money to creditors, I think you should find and meet with a local bankruptcy attorney for a free bankruptcy review. Get a legal opinion from the bankruptcy lawyer about what bankruptcy will mean for you and then make a choice about what you want to do. If you decide to not go bankrupt than come back and let me know. I’ll come up with a Plan B for you at that point.

Big hug.

Steve

Source: Trisha is a Single Mom, Separated, and Facing Bankruptcy. What Should She Do?

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Income from the GetOutOfDebt.org site advertising is used to help alleviate poverty. If you would like to help me to help others, there are easy and free things you can do, click here to learn how you can help.

“Dear Steve,

Over $70,000 in credit card debt has been charged off from the original creditors and now reside with multiple collection agencies. One of the charges is approximately $30,000, which I pay $200 per month (to Creditor’s Interchange). I have ignored the various other collection letters/calls because they want money from me that I just don’t have.

I’ve just received a letter from an attorney regarding one of the accounts (over $9000). Bankruptcy isn’t an option because my husband’s parents have money invested in accounts that list my husband as a joint or secondary and we were told that if we filed, they would take half of that money since my husbands name was on the account.

My husband doesn’t know the extent of the debt and I’m afraid to tell him. We had a discussion about debt about 8 years ago when we owed about $3,000 (total) and he had a fit, yelled, screamed and didn’t speak to me for two months. I feel like I’m drowning…

What do I say to that attorney? Do you think he’ll accept payments of $50 a week? That is the MAXIMUM I will be able to afford. Then, how do I address the other collection agencies? I’d like to pay them something to start repairing my credit, but I can’t give them what I don’t have! Thank you.

Kam”

Dear Kam,

If your husband is a joint account holder and jointly responsible for the debts than he deserves to be told the truth.

Of course, his ignorance about his personal finances is not an excuse to behave badly. He has a responsibility to look at his credit report at least once a year to see what it out there in his name. If he had seen this early, and you’d had an unpleasant confrontation, you probably would not be where you are today.

What typically happens in these situations is that when one spouse comes clean with the other, things are a bit tense and chilly around the house for a week or two and then it thaws out and the two get to work on resolving the problem.

I think the attorney letter is designed to scare you but it could also lead to you being sued for the debt to recover what you owe. If you are sued, your husband will find out about the debt when he is called to court. And if the creditor wins, which they almost certainly will, the creditor could garnish his wages or go after cash in the bank to pay off the court award.

This is quite a hole you’ve dug yourself in but the best and most responsible thing you can do at this point is to be honest with your husband, accept responsibility for your actions and stop trying to solve $70,000 of credit card debt with $50 a week payments. That is not going to solve a thing.

Even without fees, jacked up interest, and penalties, the monthly minimum payment on $70,000 of credit card debt is going to be about $3,750 a month to dig yourself out of this mess in the next 10-15 years.

You are not making anything better by avoiding the reality of your situation. Take control, take action and in the long run, it will work out for the best.

Big hug.

Steve

Source: Kam Says “I Have Charged Off Debt In Collections And I’m Scared to Tell My Husband”

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But all of those shortcomings were easily forgiven because you could often get free or one penny flights to many destinations in europe. All you had to pay for was the tax. I’m serious!

U.S. airlines could learn a thing or two from Ryanair. That is if they actually wanted to push more people around the sky for reasonable rates.

I just heard that Ryanair is now giving away one million free tickets, you pay the government tax on that, and I had to take a snapshot of the offer, otherwise you’d never believe me.

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