good credit, some get sub-prime loans

Low interest rates and aggressive marketing campaigns have driven home lending to record levels. But increasingly Americans with good credit are being saddled with loans designed for high-risk borrowers.

These higher-cost loans have been the fastest-growing segment of the mortgage market — accounting for 20% of the home loans issued last year, up from 10% a decade ago.

Freddie Mac, the government-sponsored mortgage finance giant, estimates that more than 20% of people who get these so-called sub-prime loans could have qualified for more-conventional prime loans.
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Credit Card Debt Statute Of Limitation

Credit Card Debt Statute Of Limitation – What You Should Know

Credit Card Debt Statute Of Limitation – What You Should Know
By Delia Galley

Each state has a statute of limitations on old credit card debts. The statute of limitations refers to the period after which, creditors cannot sue you to collect the debt. The length of time is calculated from your last payment date or last activity date (this is when you last used the card).

Refer to the old debts statute of limitations chart, which details the statute of limitations by Oral Contracts, Promissory Notes, Written Contracts and Open-Ended Accounts. Note that the transient nature of state legislature requires you to verify the statute of limitations period with your State Attorney’s office. For more information go to

In the past 10 years, a growing trend has ensued, where aggressive debt collectors buy old debt accounts and actively pursue consumers to collect the debt, even though the statute of limitations has past. They purchase these accounts for pennies and hope that you will pay up. Even if, you pay $1 on the account – they make a good profit.

This is a violation of the Fair Debt Collections Practices Act. Some creditors even lie and say that the statute of limitations starts from the day that they purchased the debt account. These companies are so bold that some of them will threaten to sue you and in fact proceed with the court case – don’t give in. Others will harass you day and night, use profanity or promise to erase negative marks off your credit repot, if you send in a minimal payment.

If you find yourself in this situation here are a few tips on what to do:

  • Do not send in a payment – if the statute of limitations is past in your state. Doing so, will make your delinquency look recent. It will also give the debt collectors the idea that you are an easy target and they may attack you on other fronts.
  • Keep an eye on your credit report to make sure that they are not reporting negative information about you. Your old debt account should not be reflected on your credit report since the statute of limitations is past. If you find that they are reporting the information, take corrective action immediately and fix any errors.
  • If possible, ignore all contact with the debt collection agency. Do not accept their phone calls. If they send you notices in the mail, you will want to keep these as proof of their harassment.
  • The Fair Debt Collection Practices Act indicates that there are certain things that creditors cannot do in their attempt to collect debt. Go to for a list in plain speak. For a complete list, go to
  • Verify the statute of limitations information with your State Attorney’s office and solicit further advice on how to navigate your situation.
  • The author is the owner of the information-rich website – a “Drudge Report” of credit. The website offers free advice on how to rebuild credit and manage debt. The site also features numerous articles and news stories on credit reports, credit cards and bankruptcy.

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    The 10 Step Debt Elimination System

    The 10 Step Debt Elimination System

    The 10 Step Debt Elimination System
    By Larry Holmes

    Over the years I’ve evaluated many debt elimination systems. The best one I’ve ever seen is also one of the simplest. So let me introduce you to…

    The Best Iron-Clad, No-Holds-Barred, Fool-Proof, No-Fine-Print, Debt Elimination System Ever Developed – Bar None

    Just follow the following 10 steps…

    1. Go back one year and record all of your expenses. You need to go back that far to make sure you account for seasonal spending. Check bank statements, cancelled checks, credit card statements, anything you’re spending money on.
    2. Carry a little notebook with you for a couple a weeks and record anything you’re spending cash on. For example, that cup of Starbucks coffee that you can’t seem to do without. You’ll be amazed at how much is falling through the cracks on that kind of stuff. I realize that this part is a pain. But the payoff will be tremendous.

    3. Divide your expenses by 12 to get your average monthly expenses.
    4. List the balance owed for all of your debts, including your mortgage. If you can’t find it from your records, call your creditors and lenders and ask them.
    5. List the minimum monthly payment for all of your debts. What is the total of all your minimum monthly payments? Let’s say, for example, the total is $2,000 per month.
    6. Divide the balance owed by the minimum monthly payment for each debt. This will give you the number of months it will take to pay off each debt assuming the minimum monthly payment.
    7. Rank your debts by how many months it will take to pay off each one. The fewest number of months all the way down to the most number of months.
    8. Prioritize your debts by the number of months it will take to pay off each one (again, assuming the minimum monthly payment). Your highest priority debt is the one that you can pay off in the fewest number of months. Your lowest priority debt is the one that will take you the most number of months. That will probably be your mortgage.
    9. Okay, in step Number 4, you totaled your monthly payments on your existing debts. We are using as an example a total of $2,000. Take 10% of that total, or $200.
    10. Re-direct $200 that you are already spending on something else to apply to getting out of debt. Don’t tell me that you can’t find the $200 because you can. I’ve worked with thousands of people in helping them improve their financial lives and I know you can do it. It may come from $20 here, $25 there, $30 from this other thing, but it’s there. We all spend more than we think we do.
    11. Apply the $200 to your highest priority debt. It will be the one that you can pay off in the fewest number of months. For example, if the minimum monthly payment on your highest priority debt is $200, you are now paying $400 per month toward paying off that debt.
    12. Once that debt is paid off, you now have $400 a month to apply to the second highest priority debt. For example, let’s say the minimum monthly payment for your second highest priority debt is $250. You are now paying $650 a month on that debt ($250 + $400).

      When that debt is paid off you have $650 a month to apply to the next highest priority debt. You keep doing that until you’re completely out of debt including your mortgage.

      The beauty of this system is that you’ll be totally debt-free in just a few years and the only extra money that you committed to paying off your debts is the original $200 that you applied to your highest priority debt.

      Also, you now have $2,200 a month ($2,000 minumum payments on all your debts plus the $200 extra commitment) that you now can apply to investments. And it’s those investments that are going to make you financially free.

      Visit for your common-sense guide for debt-free financial freedom.

      Larry Holmes is a Wall Street trained financial advisor with over 30 years of experience. He is also an accomplished public speaker who has presented well over 1,200 financial seminars and keynote addresses to audiences throughout the United States and the United Kingdom.

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      Stopping Collection Agency Harassment

      Stopping Collection Agency Harassment – Your Rights

      Stopping Collection Agency Harassment – Your Rights
      By Toni Phelps

      The Fair Debt Collection Practices Act was passed in 1977 to protect you from abusive debt collectors. Here are rules a third-party debt collector must follow:

      Contacting a debtor. A collector may contact you in person, by mail, telephone, telegram or fax. However, a debt collector may not contact you at inconvenient times or places, such as before 8 a.m. or after 9 p.m., unless you agree. A debt collector also may not contact you at work if the collector knows your employer disapproves of such contacts. Tip: If a debt collector phones you at work, inform your boss that it is disrupting your performance, and have your boss tell the collector to stop calling you at work. Drawback: If your boss learns of your debt problems, it may interfere with your promotional abilities.

      Contacting a third party about your debt. If you have an attorney, the debt collector must contact the attorney rather than you. If you don’t have an attorney, a collector may contact other people but only to find out where you live, what your phone number is and where you work. Collectors usually are prohibited from contacting such third parties more than once. In most cases the collector may not tell anyone other than you and your attorney that you owe money.

      Giving written notice. Within five days after you are first contacted, the collector must send you a written notice telling you the amount of money you owe, the name of the creditor to whom you owe the money and what action to take if you believe you do not owe the money. Tip: Once you receive the letter, you may want to attempt a settlement with the creditor or the collection agency. A collections agency is always authorized to take something less than 100 percent, usually 50 to 60 percent. Here are tips on how to proceed:

      – Whether you pay in full, negotiate for a percentage of the debt or accept a payment plan, get everything in writing before you give them any money.

      – Make them stipulate they will not report anything negative to the credit bureaus regarding the debt. And have your original creditor sign off on the deal. A collection agency could offer to settle a $1,000 credit card bill for just $500. But once they’re paid, the original creditor can still come after you for the other $500.

      – If you negotiate a settlement for less than you owe, you could end up paying taxes on the unpaid portion. But if the unpaid amount is less than $600, a collection agency does not have to report it to the IRS. Make this part of your written agreement.

      – Always pay with paper checks, not electronic bank drafts by phone or debit cards. It’s to your advantage to have a physical record that you’ve paid, plus you control exactly what you’re paying and when.

      – Be sure to get something in writing when the debt is paid. That way, if it does come up on your credit report, you have something to prove it was paid.

      When a consumer doesn’t owe the money. A collector may not contact you if within 30 days after you receive the written notice, you send the collection agency a letter stating you do not owe money. However, a collector can renew collection activities if you are sent proof of the debt, such as a copy of a bill for the amount owed.

      No harassment. Debt collectors may not harass, oppress or abuse you or any third party they contact. They cannot:
      – Threaten violence or harm.
      – Use obscene or profane language.
      – Repeatedly use the telephone to annoy someone.
      – Lie.
      – Use any false or misleading statements when collecting a debt.
      – Falsely imply that they are attorneys or government representatives.
      – Falsely imply that you have committed a crime.
      – Falsely represent they operate or work for a credit bureau.
      – Misrepresent the amount of your debt.
      – Give false credit information about you to anyone, including a credit bureau.
      – Send you anything that looks like an official document from a court or government agency when it is not.
      – Use a false name.

      Debt collectors may not state that:
      – You will be arrested if you do not pay your debt.
      – They will seize, garnish, attach or sell your property or wages unless the collection agency or creditor intends to do so and it is legal to do so.
      – Actions, such as a lawsuit, will be taken against you when such action legally may not be taken or when they do not intend to take such action.

      A debt collector may not engage in unfair practices when they try to collect a debt from you. They cannot:
      – Collect any amount greater than your debt, unless your state law permits such a charge.
      – Deposit a postdated check prematurely.
      – Use deception to make you accept collect calls or pay for telegrams.
      – Take or threaten to take your property unless this can be done legally.

      Having bad debt collection harassment? Here are some extreme steps you may decide to take:

      1: Don’t take the calls. You can hang up, screen calls or stop them from calling entirely with what’s known as a “cease and desist letter.” If you send a “cease and desist,” include your name, address and account number, and tell the company “do not contact me further about this debt.” Send the letter certified so that you have proof the company received it. But this move doesn’t cancel your debt. The original creditor or the collection agency may decide to sue, or the creditor can simply hire another third-party collector.

      2: Keep a diary. If you do take the calls, write everything down: dates, times, names and what is said. If it’s legal in your state, tape the exchange. And if you tell them you’re taping the call; whether you are or not, they’ll be more likely to behave.

      3: Negotiate to pay the debt. Once a debt goes to collections, you may be able to work out a deal to pay less than the full amount.

      4: Understand the laws in your state. Garnishment, lawsuits and property seizure are illegal in some places, which gives you a little more leverage to work out a deal. To learn what is and isn’t allowed, call your state Attorney General’s office or the state consumer protection office.

      But third party collectors have a choice: they can operate under the laws of your state or those of the state where the debt originated, usually interpreted as where you were living when you opened the account. Also, time may have run out on the debt. While there is no federal statute of limitations on debts, most states limit the amount of time a creditor has to collect a debt. However, that deadline varies from state to state. There is also a question of which state’s rules govern the transaction, yours or the creditor’s. That’s a very gray area. Check with your local state authority or an attorney in your state who specializes in this kind of law.

      5: File a complaint. If you suspect that a collection agency has crossed the line, call the FTC and your state’s governing office and file complaints. (Yet another reason it’s good to keep a written or tape recorded diary.)

      6: Sue. If a third-party collection agency violates your rights, you can sue for actual damages and punitive damages, as well as attorneys’ fees and court costs.

      Article by Toni Phelps, with resources from Credit
      Federal’s Debt Negotiators
      and the Federal Trade Commission

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      Reduce Your Debt

      Reduce Your Debt – How To Use Debt Consolidation to Get Yourself Out Of Debt Permanently

      Reduce Your Debt – How To Use Debt Consolidation to Get Yourself Out Of Debt Permanently
      By Carrie Reeder

      Debt consolidation can get you out of debt permanently if you make it part of a financial plan. Within five years, you can have your unsecured loans paid off and on your way to debt-free living. The key is to plan for the future.

      Get Your Bills In Order

      If you are in the hole with debt payments, then debt consolidation may be your way out. Debt consolidation programs lower your interest rates on unsecured loans with creditors. With their low fee, they handle payments, account paperwork, and direct dealings with creditors. All you do is send them a monthly payment for all your consolidated bills.

      Initially, you will see a slight drop in your credit score, eliminating your ability to apply for more credit. However, within two years you can apply for credit as lenders see your commitment to repaying loans. You can even apply for a mortgage loan at this time.

      To make sure you are betting the best deal, shop around for a debt consolidation company. Request quotes on fees and information on their services. While you want the best deal, don’t be lured by false promises.

      Pay Bills Faster

      Once you have one account paid off, apply that monthly cash toward another account. Not only will you be paying off your bills sooner, but you will be saving money on interest payments. Also consider applying any refunds or bonuses toward your bills.

      Also, look for ways you can cut spending, even if just temporarily. Cell phones, cable TV, or eating out can all be reduced or cut out. It is difficult, but keep your eye on your goal of being debt-free.

      Plan For Your Future

      It is not enough to get out of debt, you also need to plan for your future. You may find a credit counselor can help you create goals and design a budget. You can also find a lot of good information on finances online or through books.

      One of your future goals should be creating a financial safety net. Even while you are paying off debt, you should be saving money every month. While a job loss or a major illness can’t be avoided, you can minimize their financial impact by being proactive with your finances.

      To view our list of recommended debt consolidation companies online, visit
      this page: Recommended Sources for Debt Consolidation Online.

      Carrie Reeder is the owner of ABC Loan
      , an informational website about various types of loans.

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