July 8th, 2009 at 12:00am
Under Bankruptcy Files
Question:
Old debts recently fell off of my credit record and I now have an excellent
credit report. Lately I’ve been getting lots of preapproved offers for credit
cards from major companies as well as department stores. I really don’t need
more than one or two major cards but I’m wondering if I should accept them
while they are being offered. I mean you never know when you might need them
(and if I really needed them they probably wouldn’t be offering them).
Can just having a lot of credit cards (meaning a large possible line of credit)
but with zero balances hurt your credit worthiness?
Answer:
Last time I added it up my wife and I had something in excess of
$250,000 in available credit on *many* cards. This is much more than
we earn in a year. I’ve had no trouble at all getting two mortgages,
a car loan, or - more credit cards. The loan officers always have
something very positive to say about our credit rating. I naively
assumed that if I accepted every card offered I would soon stop
getting offers. I get more applications now than ever before. I
can’t imagine what these companies think they are doing. At this
point I suppose you could say that I’ve started collecting credit
cards - some of them are very cute. My DIL’s sister was either turned down or had to settle for a higher
interest rate (can’t remember which) because of too much available credit
when she applied for a car loan
We used to have an Optima Card with a credit limit of $4500. Wanted to use
it for ff miles, but the credit limit wasn’t high enough as my husband
sometimes uses cc for extensive business travel. We requested a higher
limit. Optima said we had too much available credit and while they didn’t
turn us down, they requested financial information similar to the info you
have to provide for a new home loan. They wanted stuff like last year’s tax
return, 401K and other investments, last paycheck stub. NO WAY was I going
to provide that type of info. We have very good credit.
By admin
July 8th, 2009 at 12:00am
Under Bankruptcy Information
Question:
First off I make about $3600 a month in net pay. My aunt( who is quite
wealthy) recent gave me $16.000 to pay off my new car. The problem is
that I have had some economic problem that has landed me into $16.000
in credit card debt. I would say the combined payments is about $700 a
month, whereas my car payment is $356. If I paid off the debt. all I
would have is my $740 a month mortgage and car payment.
Being that she is 80 yrs ld and failing health, I havent told her
about the debt.
So my question is, should I pay off the car or the credit card debt?
Answer:
Good point. That’s is one of the pitfalls of refinancing or getting a
second mortgage. If the person still has a spending problem, the
credit cards will get back to their limit. Still paying the credit
card debt might be the more prudent choice. Let me reiterate. If the car is paid off, they can’t take it away from
him.
If it’s the OP’s spending habits which caused his financial problem
originally, he ought not to leave the car at risk, because he’ll never
be able to explain to his aunt how he loses the car from failing to
meet the payments.
The original post can be read as one seeking opinions that favor
shucking credit card debt in order to take on a car debt. Then his
credit cards would be freed up and he could run up his credit card debt
all over again. He may be trying to live beyond his means. I would
not be surprised if the OP has already used the car money on his credit
card debt.. The problem is this. I got into credit card debt because of major job
problem which meant I was not making ends meet. Much of the 16,000 was
mainly gorceries and alike. Nothing lavish. Secondly, my checking
account was getting very low. I had no overdraft protection because of
bad credit. They did pay for any item with insufficient funds, but it
cost me over $3,000 dollars in nsf fees last year. To be hnest, now
that my account is in good standing, might be time to quit the bank.–
Ill consider tha later.
Now I find myself in a position where I am falling behind…way behind.
Im making triple payments just to catch up.
For instance on my HSBC card, I am making 400 dollar double payment
just to stay one month behind.
Now I could pay the full $16,000 to the car, but then I still would owe
atleast a couple of payments. I could use some of the money to catch up
on my bills, payoff smaller cc cards, and put the later
amount($10-12,000)on the car.
Or I could pay everything up where all I would have is just the car and
the mortgage. I would tear up the cards, never use them. I`m getting
paid more now and very confident I am never going back down that road
of excessive debt.
By admin
July 6th, 2009 at 12:00am
Under Bankruptcy Information
Question:
I am trying to decide if I should move my $10,500 car loan at 9.75% to
a credit card that promises 3.99% until the loan balance is paid off.
Here is my situation: After looking at my credit report and adding up
all the revolving credit limits, it comes to about $44,000. I
currently have about $9,700 of that limit used.. $9,000 on a credit
card and $700 on a store card. I figured that in the next year I can
save $700 or so in interest, over $1000 in two years by making the
switch.. I plan on selling the car in the next two years.
Will it hurt my credit score if I do this? What are the implications?
Answer:
Are you sure that you can do this? Is there any “cash advance fee”
or similar fee?
I don’t know your particular offer — I couldn’t, since you gave no
details beyond the above — but the usual thing is to transfer
balances from other credit cards.
Read the fine print VERY carefully. Look for “gotchas” like their
reserving the right to jump your interest rate up to 20%+ if you’re
even a day late on a payment.
As for your credit score, it would depend on the credit limit of the
new card. If your new card has a limit not much greater than the
loan amount, then paying off the loan and opening the credit card
should make little or no difference. I have ATT(Citibank) and BankOne cards and get those “coveeeeeeniece”
checks for 2.99% or 3.99% for the life of the loan AT LEAST once a month.
No transcation fee, etc.
Also, if your credit rating is good they wouldn’t THINK of raising
your rate. Last year because of change in jobs and direct pay snafus
I missed my BankOne payments twice within a couple months. Not only
didn’t they raise my rate from they even refunded the late charge.
It all depends on your credit rating and payment history.
So, if the OP’s got good credit, a good history and is responsible with
his payments there’s not go for it.
By admin
July 6th, 2009 at 12:00am
Under Bankruptcy Questions
Question:
I have an existing 5 years’ balloon mortgage on the prime residence, with 4.25%
interest rate. I’m planning to pay it off fully in 5 years, making extra
payments.
ING Direct is offering home equity loan with 4% interest rate and no
points(http://home.ingdirect.com/open/open.html) . This sounds like a very good
deal, they confirmed there are no prepayment fees, and extra payments would
still go towards the interest. Are there any caveats in changing conventional
mortgage to a home equity loan? How about the refinancing costs? Are they going to charge loan origination
fees, survey or inspection fees or any other types of fees?
Answer:
In general, the amount owed on a first mortgage far outweighs the equity in a
house. Though the OP MIGHT be an exception, the limit of the typical HE loan or
HELOC obviates its replacing a first mortgage. A “refinancing” of the first
mortgage is most often necessary.
Also, it is VERY unusual to find a HELOC or HE Loan that is cheaper than a
replacement first mortgage. Since a HELOC or HE Loan is, by definition,
subordinate to an existing mortgage, the lender carries a higher risk — though
sometimes marginally so.
Also traditionally true, and again these are not traditional times and on
this specific point, the times have not been traditional for a number of
years. I took out my first mortgage about thirteen years ago. Five years
ago I took out an equity loan to put in a pool and the interest rate was a
couple of points less than than the first mortgage. Last year I took out
another equity loan to pay off the first mortgage, and the rate was lower
than both the original first mortgage and the pool loan. Total fees on the
last loan were $75.00. That might traditionally be true, but these are not traditional times. I
refinanced my house last year by taking out a home equity loan and using the
loan proceeds to pay off the first mortgage. This was the specific intent
of the home equity loan, and both I and the bank providing the loan went
into the deal knowing that up front.
By admin
July 5th, 2009 at 12:00am
Under Bankruptcy Discharge
Question:
Please excuse the lack of real personal issues here, but i’m now at the
stage of the game where money becomes a real issue. i’d appreciate any
>advice on this, and FYI i live in Canada (don’t know if laws differ on
this front in the States).
I believe that you would have to go to court and the judge would rule on
a budget for you to live on while at the same time making arrangement with
your creditors a payment schedule. Declaring bamkruptcy does NOT free you
of your financial obligations.
Answer:
In the United States, if you file under Chapter 11, you make a schedule to
repay your debts to the best of your ability. The bankruptcy is then executed
by the courts, making sure you pay. If you have a change in circumstance, you
will get your debt repayment altered. After the end of 2 to 5 years, any
remaining debt will be dischaged, freeing you of the remaining financial
obligations. Under Chapter 11, you do not give up any assets.
Under Chapter 7, you total up all your assets, and are allowed to keep
so much in different catagories. For example, you can keep a car, as long
as it’s an old piece of junk not worth keeping. (I paid more to keep my
piece of junk working than I paid for it!) You are allowed so much equity
in your house, and so on. Expensive cars (>$2000 or so, depending on state)
and houses with lots of equity will be liquidated by the court. This DOES
free you from your financial obligations. You are allowed to file Chapter
7 once ever 6 or 7 years, so if you go this route, and manage to get into
debt AGAIN in that time period, your only option will be Chapter 11.
You can file Chapter 11 as often as you like, but you can only have one
filing go on at a time. Consumer debt and credit advisors work for your creditors. They’re an option,
but if you have a few creditors that happen to be real assholes, (I could name
one that is now being sued for violation of federal truth in lending laws…)
you’re only realistic option may be some sort of bankruptcy. Besides, these
services are not doing anything that you can’t do yourself. Some creditors
will work with you. Others make it a policy to always “call the bluff” of
people who say that they are going to have to bankrupt if they can’t get
relief on their debt payments.
By admin
July 5th, 2009 at 12:00am
Under Business Bankruptcy
Question:
I have a joint account car loan with a $16,000 (aprox.) balance, as it
was a 5-year loan and I am still in the first year of payment. The
original balance was around $18,000. I am hoping, even though I had a
co-signer on this, that after a year or two, this will really boost my
credit score with timely payments (which have been perfect thus far).
My question is: how does a $10,000 balance on a $18,000 loan look
versus a $16,000 (versus a $5,000 balance and so forth)? Will this
bump my score up quite a bit in a few years? Right now my average FICO
score is around 615 (between the 3 bureaus). Want to get it over 725
for a good mortgage rate. Any thoughts would be appreciated! Thanks!
Answer:
What if I pay off 75% of the balance early on the car loan? Then,
technically, my remaining monthly payments would be lower, correct?
Not trying to nit-pick, just trying to understand the game. Also…
how long will it take me to go from a 615 to a 650 FICO if I have two
loans in re-payment now (student loan and joint account car-loan)???
Making payments on-time to both now, but had a couple of 60-day late
payments on the student loan a about 18 months ago. Any help is
greatly appreciated, as I am totally new to the mortgage world. there’s no “game” to it, the most important thing is paying your bills on
time. That and length of credit history…. i never bought a house until
i was in mid-30s. I’d never had an installment loan (paid cash for cars),
only revolving accounts. I had a whopping total of two bank cards, &
3 rarely-used store cards. The important thing was that i’d had those two
bank cards for over a decade each. When i applied for the mortgage, my
low score was upper 750s, my high low 800s, & my middle upper 770s.
it’s my understanding that the last 2 yrs. for lates is most important,
so you might be better off in another 6 months. Only what i’ve read, don’t
know for sure.
as far as your monthly payments, they wouldn’t change — you’d simply
have fewer payments to make.
By admin
July 4th, 2009 at 12:00am
Under Bankruptcy Files
Question:
I got home late tonight and received a notice from First Card
(you know, the mileage plus outfit) that they were cancelling
my $8,500 limit credit card. They gave no reason, but did give a couple of
phone numbers. I plan to call them in the morning.
What on earth could be going on here? I have a 6 digit+ salary,
and have always paid my cards. In fact, this one has had a zero
balance for several months. They claimed that the following
“consumer reporting agency” provided them with adverse information:
Answer:
Possibly someone reported wrong information to them, or in my case merged my
file with someone else who never paid a bill. Be prepared to fight if you have
to, but suing is useless since the credit reporting companies basically wrote
the Credit Reporting Act of 1997. I had problems for months including having a
car loan turned down, a credit card canceled (like you) and a lawsuit served
against me! You will be able to get a free credit report Trans Union with a copy
of your letter from the credit card company. This is what happened to me. The credit card company sent a letter saying that my
line of credit and been changed to zero. I called them up and asked them what caused
this. They didn’t “know” I Made them run another report right then and told them to
sent me a letter that they restated the credit line.
By admin
July 4th, 2009 at 12:00am
Under Bankruptcy Information
Question:
I am wondering if refinancing will make any sense for me at this time.
I am looking to reduce my monthly payments.
Any suggestions or recent experiences with interest rates.
Any recommendations on how to go about finding the best lender?
Answer:
You’re not going to find anyone willing to refinance your car at better
than a 3.9% rate. Car loans are currently in the high sixes to low sevens
for new car purchases. You probably have a promotional rate, which no one
is going to beat to do a refinance. If you want those “zero percent” loans
that you’re seeing on TV, you’ll have to buy a new car. What’s the repayment period? If you got the special 3.9% rate based on a 3
year repayment period and are stretched for the payment, you might be able
to refinance the balance owed over another 4 years or so and lower your
payment, but you’ll certainly end up paying a lot more in the long run.
Otherwise, even if you could find a low rate, it’s now a two year old car
(2002’s out or due out shortly) and, depending on finance period, you will
likely owe more than it’s worth. In addition if it was new when you bought
it, you were probably able to finance over a longer period than you can now
with a used car. I’ve refinanced before through credit union when stretched
for cash. Not sure how eager banks or finance companies are for such a
deal.
By admin
July 4th, 2009 at 12:00am
Under Bankruptcy Information
Question:
they are don’t bother with screening since the phone is MY tool.
If I am busy I do not answer.
If it is a telemarketer I say “Thank you. Not interested” and just hang up.
Answer:
When I was 11 I started going to church with a friend. A few weeks later the
minister came to call. My grandma solved the problem. She stuck her head in
the door and said “Preacher? Tell the old fool to go away.”
My mom would never do such a thing, but I would. Guess it skips a generation.
I really should do the “Wait just a minute, the timer went off…” thing more
often, but I never think of it until after I’ve hung up. My company will not take credit card orders on the phone from
companies (we do not do retail sales) that we do not know. We offer to
pay for the cost of a wire transfer if the customer refuses other forms
a payment. In an ideal world perhaps. In reality the banks seem to be even more
cluseless about security than many of us individuals. There have been a few
articles in comp.risks over the past year telling about legitimate bank emails
to customers that have all the red flags for phishing scams. For example, the
link they point you to for signing up for their new program points to some
hosted website that’s not part of their corporate domain.
Plus in a more recent article, someone posted a personal experience
that makes you wonder. His wife found a bank debit card that was dropped in a
shopping center parking lot. She called the number on the back of the card to
find out where/how to turn it into the bank so that the owner wouldn’t be
victimized. The bank rep proceeded to tell her the cardholders name, address,
and FULL card account number. Ok the last was on the card already in her
possession, but there was no reason to tell her the cardholder’s address. If
she wanted to after that point, she could have gone shopping for free.
By admin
July 3rd, 2009 at 12:00am
Under Bankruptcy Discharge
Question:
Please excuse the lack of real personal issues here, but i’m now at the
stage of the game where money becomes a real issue. i’d appreciate any
advice on this, and FYI i live in Canada (don’t know if laws differ on
this front in the States).
i’m interested in finding out what really goes on when a person declares
bankruptcy these days. i’m in a situation where my wife and i are splitting
up and i’ve chosen to take on all the debts. which, on a monthly basis,
eats up half of my take-home pay. naturally, this’ll get better when/if the
balances go down. but in working it out on paper (i’m very new to all this),
i’m going to barely break even. $ IN = $ OUT. and that’s with no frills,
minimal pocket money, and so on. so when welfare (wife’s unemployed) says
“hey, pay up X amount of dollars each month for child support”, what happens -
since i have nothing left? i’m aware that they can garnish your wages, but
what do people in this situation DO?!
i won’t be able to even come close to what they’ll ask. is this when you
declare bankruptcy? i’ve heard that these days, they don’t come into your
house and take everything you own (at least if there’s nothing of real value).
apparently, the debts are wiped out, and the your credit rating goes straight
into the toilet… for a period of time (about 5 years?). any truth to this?
i’d like any info and opinions on this because this may be my only existing
option when time comes to actually make a support payment.
thanks for anything you can offer…
Answer:
Divorce and Bankruptcy… Where do I begin? Your laws may be different, but
you have to juggle your divorce and your bankruptcy. My lawyer told me that
it was best to bankrupt before the divorce if you can get your s2bx to agree
to it. I’m not sure what was to happen if she didn’t agree. You’ve got all
the debt, so why should she agree. If she doesn’t agree, you have to bankrupt
against the debtors AND your ex. That way, she can’t turn around and sue
you for the debts and make you responsible, to her, to pay them. My lawyers
said that can start some really nasty games. Down here you get one shot
every 7 years, so you have to do it right the first time. In the states, we’re a bit odd. We have a federal bankruptcy law,
and then there is the state bankruptcy law. Depending on state, you have
the option to either file under the state or federal allowances. Both
allowed me to so much equity in my house, with the state allowing more.
The federal was better about wierd assets that I don’t have. It didn’t
seem to matter how I filed, tho’.
I can’t get enough credit to buy lunch. On the other hand, I have no debts
and have a positive net worth. I have a really good income now. But because
I was bankrupt and had so much income, I ended up paying spousal support that
I wouldn’t otherwise had been able to pay.
The funny thing is, I think my ex now has a new credit card already. I don’t see
how someone on the dole is able to get credit and I can’t. But that’s the
way the credit laws work in the states. She’s a woman, so she gets credit.
Even when we were married she could get credit cards when I couldn’t.
She got about 5 of them and ran them all up, and I didn’t even KNOW how
deep in debt I was or what cards she had. Then the credit card companies
came after ME for her debts! I told those slimy bastard banks to cancel
her cards and not let her spend anymore. Know what they did? Nothing.
Except Citibank. Citibank raised her limit! The cards were already over
the limit. They said that I had very good credit, thank you, and were
going to raise it, not cut it off. I pointed out that it wasn’t my card
and that I wasn’t going to pay and my wife had no job. No problem, they
said, I’m still responsible.
That’s when I decided to bankrupt. I either had to defend myself in a
lawsuit against me (I probably would have won, but I still would have
to defend myself) Or I could just dump the debt and be done with it.
It cost me $650 for the whole thing. I had a really good lawyer, and
I am VERY PLEASED that I hired him! He got some debts that I would have
missed had I tried to do it myself, debts that I didn’t know were
dischargable.
The really bad part is that during my divorce my job moved 35 miles from
where it was, and now my commute each way is 65 miles. I can’t move because
I can’t get a loan for another house! I can’t even rent a decent apartment.
I don’t miss the credit cards, I just pay cash everywhere I go. But the
not being able to move hurts.
By admin
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