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Unformatted text preview: ou can dispute the debt The debt collector has 30 days to verify the debt Consolidate loans if it makes sense 22 Reasons for Indebtedness Emotional problems: need for instant gratification Using money to punish The expectation of instant comfort among young couples who overuse the installment plan Keeping up with the Joneses Overindulgence of children Lack of communication among family members High finance charges Spouses with different attitudes toward debt
23 Warning Signs of Debt Problems Paying only the minimum balance each month Increasing the total balance due each month Missing or alternating payments or paying late Intentionally using overdraft protection or taking frequent cash advances Using savings to pay routine bills such as food Getting second or third payment notices Not talking to your partner about money or talking only about money Depending on overtime to meet routine expenses
24 Warning Signs of Debt Problems Using up your savings Borrowing money to pay old debts Not knowing how much you owe Going over your credit limit on credit cards Having little or no savings for the unexpected Being denied credit due to a credit report Getting denied a credit card or card revoked by the issuer Putting off medical or dental visits because you can’t afford them now 25 Consumer Credit Counseling If you can’t pay your bills, postpone further credit purchases, talk with your creditors, or seek help from a nonprofit credit counseling service Nonprofit CredAbility recommended* Make an appointment No longer a negative on credit score Provides education about credit Provides help with spending plan Provides debt counseling services for those with serious financial problems
* Formerly known as Consumer Credit Counseling Service 26 Credit Repair Clinics Beware because They can cost you money Virtually everything clinics do can be done by you No one can legally remove accurate data from your credit files Any consumer can dispute inaccurate data There are NO miracle cures for bad credit 27 Bankruptcy: The Last Resort
Bankruptcy filings have grown substantially New law becomes effective 28 Declaring Personal Bankruptcy Bankruptcy was designed as a last resort but has become an “acceptable” tool of credit management Recent bankruptcy reform laws are designed to end abuses of the current system, will force more Chapter 7 filings and restrict some loopholes (e.g. FL homestead...
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- Spring '14