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“Dear Steve,

I fell behind on my mortgage payments then I stop paying my mortgage payments and let things get worse.

I fell behind in my mortgage and then gave up and stop paying it. I’ve been in foreclosure for about ten or more months. In a few weeks there will be a court case not sure if it will be final but i was served papers from the bank ten months ago or so. Can I stop all this and keep my house or is it too late now that i woke up and want to fix this mess?

Please help me if you can, thank you.

Jason”

Dear Jason,

The biggest issue we need to deal with after ten or more months of avoiding dealing with this is how much time you really have left.

I suspect that you don’t have a lot to enter into a long protracted negotiation process. You have three options:

Call The Lender Directly

You could call the lender directly and see what options they have to help you reinstate the mortgage.

Call a HUD Approved Housing Counselor

You could discuss your case with a local housing counselor and see what options they may have for you. You can find one online here.

You Could File Bankruptcy

You could talk to a local bankruptcy lawyer to see how a chapter 13 bankruptcy can protect your house and get you back on a payment plan to repair the delinquent mortgage situation.

Please come back and let me know which option you choose and what the outcome is.

Steve

Source: Jason Has Not Paid His Mortgage in 10 Months And Wants to Keep His House

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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,

Me and my fiancee are in college my fourth year, her third and because I went without a job for about 8 months we encoured almost 10 grand in debt. Now that we are both working and trying to do the right thing we are slipping farther and farther into trouble and we no longer use any of the cards

Is there any government programs and grants for people like us , I also wonder about that bailout and if that could help us out at all?

Chris”

Dear Chris,

I get so many inquiries about government program, government grants and bailout money to pay off credit cards that I’d rip my hair out if I wasn’t bald already.

The problem with the belief in government grants and free money being available to help people in trouble, like you and your fiancee, is that a bailout program sounds almost like something that could be offered. It’s not.

There is no government program to pay of your debt, no bailout money to help you pay your bills and no free money from government grants to eliminate your credit cards. It is a myth.

I’m afraid the real way out of this is hard work and if that does not work, consider a debt management program, and if that does not work for you, then bankruptcy.

Big hug.

Steve

Source: Chris is in College With His Soon to be Wife And Slipping Below The Waves in Debt

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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’m in debt from medical bills at about $17,000. I was taken to court over a $560 bill and am making payments on that, now I have another bill for about the same amount that i have court with next month. My finances are totally screwed up and i need to get a grip on these bills! What can I do?

Rachel”

Dear Rachel,

If you are being taken to court over these debts it is either an indication that you simply don’t have any money to pay towards these, or you are so completely irresponsible that you ignored them.

The more logical answer is that you simply don’t have any money to pay.

Really, the only way out from under these bills quickly is bankruptcy. And now you see why medical debts often lead people down to bankruptcy court. If you go bankrupt then it would wipe out that debt you are paying on already as well.

Go talk to a bankruptcy attorney right now or ask for a free bankruptcy review online.

Big hug.

Steve

Source: Rachel is in Medical Debt, Was Sued And Lost. What’s Next?

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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,

My daughter opened an AMEX card for me since my credit is fair. She got me a card in my name off of her account to be used for emergencies For the first 8 months of the card I was able to pay the bill however in mid July I came upon financial hardship and wasn’t able to pay.

I was using the card for everyday use and not emergencies and my daughter wasn’t aware of it since I was the account manager on the card and my bank account was connected to the card and paying all of the bills.

My daughter used the card maybe once or twice.

To make a long story short I can’t pay the bill and it’s now over 120 days in arrears. This bill is $38,000 now with all the interest it’s accrued. AMEX will not deal with me at all. I’ve asked them for a payment plan to get this paid off however all they offered was a plan that I have to pay $2930 per month for 12 months and I can’t afford that! I asked them to allow me to pay $700 - $1000 per month with a balloon payment in August (when I expect to get a bonus from my job) but they wouldn’t do that either.

They said if we don’t pay the first payment by next Friday that it will be turned over to a collection agency.

I have ruined my daughters good credit. She’s only 25 and was going to buy a house in the next few months and now she won’t be able to. I’ve also asked AMEX to put the liability in my name and make me responsible for the bill since my daughter didn’t know anything about this but they won’t do that either.

Any suggestions?? I’ve looked into debt companies but I’m afraid they may be scams.

Help please!!

Chloe”

Dear Chloe,

The damage is now done and hopefully you’ve learned some very valuable lessons. No sense wasting a perfectly good failure, I always say.

Sadly, this is not the first time I’ve seen a situation like this, and I’m sure it won’t be the last either.

When you daughter agreed to let you be an authorized user of her account she gave you the opportunity to ruin or damage her credit. And for everyone that may have allowed someone to be an authorized user on a credit account, check the balance and/or check your credit report to see what the current status of the account is. You don’t need a surprise like Chloe’s daughter got.

Before you leap to anything like credit counseling or debt management, which your daughter would have to enroll in since this is her card, not yours, I’d suggest waiting and letting the card go to collections.

Once it gets to the collection company they may accept your offer to repay $1,000 a month. But even $1,000 isn’t going to clear this balance in less than four or five years. This might be a good account to consider doing a debt settlement on. If you work with a reputable debt settlement company there is a chance that you could get 30% knocked off the balance and get this resolved in just a couple of years. Try contacting this debt settlement company and see what they feel is possible.

For my regular readers you may notice that while I am sometimes critical of debt settlement companies, this is a good example when a debt settlement approach might be a good option. The only unfortunate situation here is that it is an AMEX account. Never an easy creditor.

Big hug.

Steve

Source: Chloe Ruins Credit of Daughter With American Express

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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 worked as a teacher for sixteen years. I developed disabling panic attacks which would no longer allow me to work.

Soon after, I filed for bankruptcy. I later applied for social security disability in 2001 but was denied.

In 2003 I was forced to sell my home in order to have money to live. I began renting an apartment with a roommate and have managed to frugally live on the proceeds of the sale until now. I was able to reestablish an excellent credit record. But my funds have now been completely depleted and my credit cards have been my sole source of support the last several months. I have nothing left, no money and no family or friends that can help in any way.

I tried reapplying for social security disability recently but was denied again. All I have is some credit card credit left. But by next month, I will no longer be able to make my minimum payments, pay rent/utilities, or buy food.

My roommate was just laid off and cannot help either. I am 46 years old and facing homelessness and hunger. I am completely terrified. I am a good person and have always been a very good money manager. I suffer from extreme anxiety disorder and after many years of therapy and treatment, my condition just will not go away. I do not have the money for anymore treatment, and I have continually looked for work that I can do at home, but I just have not been able to find anything.

What do I do? I’m afraid I am a hopeless case. Thank you for reading this.

Rosie”

Dear Rosie,

I’m so sorry that you are living through this situation and a resurgence of your panic attacks. Debt does not help anxiety, it intensifies it.

The biggest issue is that for whatever reason, you have held off finding a solution for this terrible situation until the very last minute. Debt problems are not like a fine wine, they don’t get better with age.

I understand the limiting factors of your situation with the anxiety and panic attacks. I feel for you but that does not change the fact that you have no money coming in to live on, to safely shelter yourself or to keep you warm.

The reality of your situation is that once you started living on credit cards to get by, you were also living on very borrowed time. With cash gone, credit gone and soon, your apartment potentially gone, there is a good chance that you may wind up homeless.

The good news is that there might be some solutions to provide advice and assistance.

• Rent assistance advice is possibly available through the Housing & Urban Development agency.
• For medical care you quite possibly qualify for Medicaid. You’ll have to contact your state Medicaid office to learn how.
• You may be eligible for food assistance programs, like SNAP.
• Job location assistance and job directories are available online.
• You can contact your local city or county health department and let them know your situation and see what local programs may be available.
• I’d explore the Social Security denial some more. The DisabilitySecrets website has some good advice on it. Just because you have been turned down, does not mean that you are either not eligible or can’t get it. It may take a fight. You can also get a free case evaluation here.

Although disability claims based upon mental impairments may be harder to achieve an allowance at the initial and reconsiderations levels, these claims have a fair chance of allowance at the administrative law judge hearing. Therefore it would be sound advice to appeal your claim if you are denied at the initial and reconsideration levels of the Social Security disability process.

Specific guidelines for anxiety related disorders are found in Social Security’s Listing Of Impairments in Section 12.06. According to these guidelines an anxiety sufferer must have “a persistent irrational fear of a specific object, activity, or situation which results in a compelling desire to avoid the dreaded object, activity, or situation. Or recurrent severe panic attacks manifested by a sudden unpredictable onset of intense apprehension, fear, terror and sense of impending doom occurring on the average of at least once a week”.

Since the Social Security Administration approves panic attack disability benefits on a case by case basis, there is a formal application process. There are strict guidelines for average monthly income made year-to-date, case severity, and future work plausibility. However, for those stricken with debilitating anxiety and panic attacks that make work impossible, it offers a glimmer of hope and financial assistance.

But even with all these helpful tips we can’t take our eye off the primary issue, the lack of income. Establishing a source of income must be the number one priority. Without income you will not have many, if any, choices. I would suggest taking a look on Snag A Job for places that are hiring, right now, in your area.

Rosie, I think that if you put effort into exploring all of these options that out of it you may create at least an emergency solution that may assist you.

Big hug.

Steve

Source: Roise Has Panic Attacks, Can’t Work, And Is Now Out of Money

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“Dear Steve,

I currently owe $30,000 directly to a university as a collection with 6% interest. They will not release my transcripts from my one year of study at the university until I have paid the amount in full. I am making the minimum payment every month, but my income is roughly $12-13 an hour because all I have is my high school diploma. The interest keeps accruing and I am unable to pay it off in the foreseeable future on my income. I would like to go back to school or complete some sort of training program to obtain a higher paying job, but cannot do so without my undergraduate transcripts.

How can I pay off the university in order to get my transcripts and obtain training to get a higher paying job?

Jake”

Dear Jake,

The college is holding the transcript hostage because it is the only collateral they’ve got. It certainly does not sound like this was a government backed student loan so your options are significantly limited.

Sometimes debt is just the beginning of their woes. Students who leave school because they can’t pay their bills often face a second sanction — a freeze on their education. Universities typically refuse to release transcripts for students who owe money, preventing those who’ve dropped out from finishing school elsewhere, which would better position them to repay the debt. Source

Over the years I’ve had a number of clients that have been in this very situation and until the debt is paid, the transcript remains a hostage.

Typically the issue surrounds your college regulations or student contract which says that all outstanding fees must be paid to receive course credit and official transcripts.

Your best course of action would be to attempt to negotiate a suitable solution with the university or hire a lawyer to look into the issue to determine if the college has violated the student contract in any way that may allow you to get an official transcript.

This is not necessarily a great solution but then again, I’m not a huge fan of student loans because the consequences for nonpayment can be very severe, as you’ve learned.

Big hug.

Steve

Source: Jake Wants His Transcript But He Defaulted On His Student Loan Debt

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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,

My husband and I just bought a home and besides the mortgage, we are in debt for $26,000.

I called up my credit card companies and they said they aren’t offering lower rates to customers now.

I went to CCCS website and they say lowering customers rates is one of their ways they can help out. If I can’t get the credit card companies to lower my interest rates, how can CCCS? I have also read some negative things about CCCS and other agenices like theirs.

What can I do to protect my family from not being able to make ends meet?

Eva”

Dear Eva,

Congratulations on the new house. I got you this answer for a house warming gift.

CCCS or any credit counseling group offers what is called a Debt Management Plan or Debt Management Program, DMP, as a way to consolidate your debts. Many people think it is a loan, it’s not. Others think it is an easy way out of debt, not necessarily.

Credit counselors are recognized by creditors to offer special terms that might involve lowering your interest rates. These terms are generally reserved for people that are having financial problems, not as a way to just lower your monthly payments.

Entering into a credit counseling program can negatively impact your credit score since it is an indication that you are having financial problems. And once your creditors see or learn about your participation, your interest rates and/or monthly minimum payments could go up.

A credit counseling program is paid for primarily by the creditor that pays the credit counseling group a percentage of money they collect from you and return to the creditor. I know, it sounds dangerously close to the services provided by a debt collection agency.

Now, there are times to use a debt management program, especially if you are having a tough time getting by each month and if you don’t get into a debt management program then you will fall behind or go bankrupt.

Nobody can give you specific advice about what terms will be offered to you in the debt management or credit counseling program until you contact the credit counseling group and ask about what terms your specific creditors typically offer.

Since the terms and interest rate reductions are very important to you, I think you should contact this group and see what the current terms are. When you contact them, also be sure to ask what your creditors will do with your minimum payment when you are in the debt management plan and ask for an estimate of what your monthly payment would be.

There is no reason for you to enroll or signup for a debt management plan to learn this information and while CCCS is one group that offers debt management plans, they are not the only one.

Finally, a debt management plan is primarily dictated by the terms the creditors offer through the credit counseling agency and not by the credit counseling agency negotiating on your behalf. There is no negotiation.

Protecting your family from not making ends meet has less to do with CCCS than it does with utilizing your money so that your most important bills are paid first. This means that your mortgage, car payment, utilities, food, etc. should be paid before you send any money towards your credit card debts. In fact, I think you should also be putting at least $100 a month into a savings account as part of your most important obligations.

If you were to fall behind on your bills and creditors closed your accounts, you’d need the savings account money to help you in an emergency. Its logical and makes sense.

Big hug.

Steve

Source: Eva Has Heard Negative Things About CCCS

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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 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 Finance Bloggers Question of The Week

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