solve your money troubles, debt credit and bankruptcy 13th (2011)

Free Legal Updates at Nolo.com Money Robin Leonard & Attorney Margaret Reiter • Stop illegal collection practices • Create a realistic budget • Get your fi nances under control • Understand your bankruptcy options 13th Edition OVER 100,000 SOLD “Offers those deep in debt a plan for digging themselves out.” ORLANDO SENTINEL Solve Your Debt, Credit & Bankruptcy Money Troubles N O L O ®  e Story Dear friends, Founded in 1971, and based in an old clock factory in Berkeley, California, Nolo has always strived to off er clear legal information and solutions. Today we are proud to off er a full range of plain-English law books, legal forms, software and an award-winning website. Everything we publish is relentlessly researched and tested by a dedicated group of in-house legal editors, who together have more than 150 years’ experience. And when legal changes occur after publication, we promptly post free updates at Nolo.com. 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Leonard, Robin. Solve your money troubles: debt, credit & bankruptcy / By Robin Leonard & Margaret Reiter.—13th ed. p. cm. Includes index. Summary: “A comprehensive guide for those on the brink of fi nancial crisis to manage fi nances and get debt under control. The 13th edition includes information on the Credit CARD Act and dealing with foreclosure”—Provided by publisher. ISBN-13: 978-1-4133-1421-2 (pbk.) ISBN-10: 1-4133-1421-X (pbk.) ISBN-13: 978-1-4133-1423-6 (pdf e-book) ISBN-13: 978-1-4133-1569-1 (epub e-book) 1. Debtor and creditor—United States—Popular works. 2. Credit—Law and legislation— United States—Popular works. I. Reiter, Margaret. II. Title. KF1501.L46 2011 346.7307'7—dc22 2010052779 Copyright © 1991, 1993, 1995, 1996, 1997, 2000, 2001, 2002, 2003, 2005, 2007, 2009, and 2011 by Nolo. All rights reserved. The NOLO trademark is registered in the U.S. Patent and Trademark Offi ce. Printed in the U.S.A. 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Table of Contents Your Legal Companion to Solving Your Money Troubles 1 1 How Much Do You Owe? 3 How Much Do You Earn? 5 How Much Do You Owe? 5 2 If You’re Married, Divorced, or Separated 9 Community Property States 11 Common Law States 14 3 Debts You May Not Owe 19 You Are the Victim of Misrepresentation or Other Fraud 20 e Seller Breached a Warranty 26 Your Car Is a Lemon 29 Home Mortgage Contracts 31 You Canceled a Contract 31 You Received Goods You Didn’t Order 36 You Don’t Want Goods on Layaway 37 Canceling Automatic Deduction Payments 37 You’ve Been “Slammed” by a Phone Company 39 You’ve Been “Crammed” by a Phone Company 40 4 Prioritizing Your Debts 43 Secured and Unsecured Debts 44 High-Priority Debts 46 Medium-Priority Debts 49 Low-Priority Debts 50 Review Your Worksheets 52 5 Negotiating With Your Creditors 53 Communicate With Your Creditors 55 Rent Payments 59 Mortgage Payments 60 Utility and Telephone Bills 62 Car Payments 63 Secured Loan Payments 65 Insurance Payments 67 Medical, Legal, and Other Service Bills 68 Child Support and Alimony Payments 68 Income Taxes 69 Student Loan Payments 70 Credit Card Payments 70 Negotiating When the Creditor Has a Judgment Against You 73 Pay Off a Debt for Less an the Full Amount 73 Don’t Write Postdated Checks 77 Beware of the IRS If You Settle a Debt 79 6 Finding Money to Pay Your Debts 81 Increase Your Income 82 Get Some of Your Tax Refund Early 82 Sell a Major Asset 83 Sell Smaller Items 84 Cut Your Expenses 86 Withdraw Money From a Tax-Deferred Account 89 Apply for Government and Agency Help 90 Consider a Home Equity Loan 93 Use the Equity in Your Home If You Are 62 or Older 95 Borrow the Money 99 Get Your Tax Refund Fast 100 What to Avoid When You Need Money 100 Avoid Bank and Credit Union Prepaid Cards With Advances 104 7 What to Expect When You Can’t Pay Your Debts 107 Eviction 108 Repossession 109 Tying Up Property Before a Lawsuit 116 Lawsuits 117 Lawsuits Against ird Parties Who Hold Your Assets 118 Liens on Your Property 118 Jail 120 Bank Setoff 120 Intercepting Your Tax Refund 120 Loss of Insurance Coverage 121 Loss of Utility Service 122 8 Reducing Mortgage Payments and Dealing With Foreclosure 123 Foreclosure 124 Overview of Nonjudicial Foreclosure 125 Judicial Foreclosures 126 e Sale 126 Defenses to Foreclosure 128 Watch Out for Deficiency Balances 130 Alternatives to Foreclosure 131 Short-Term Informal Payment Plans 133 Federal Programs for Homeowners Facing Possible Foreclosure 133 Mortgage Workouts 140 Refinancing 141 Selling Your House 144 Short Sales and Deeds in Lieu of Foreclosure 144 Other Programs to Help Homeowners 147 9 Dealing With Debt Collectors 149 Creditor or Collection Agency? 150 Negotiating Secured Debts 152 Before Your Debt Is Sent to a Collection Agency 152 When Your Debt Is Sent to a Collection Agency 154 Illegal Debt Collection Practices 166 How to Fight Back If a Collection Agency Violates the Law 169 10 Choosing and Managing Credit Cards 177 e Credit CARD Act 179 Credit Card Traps 186 Trouble Paying Your Bill 192 Using Credit Cards Wisely 193 Cards You Didn’t Request 198 Rejected and Blocked Cards 199 Liability If Your Credit Card Is Lost or Stolen 200 Unauthorized Use of Your Card by an Acquaintance 202 To Dispute a Credit Card Bill 203 Debit Cards 208 Prepaid Debit Cards 210 11 Understanding Loan and Other Credit Documents 211 Required Credit Disclosures 212 Terms of Credit Agreements 216 12 Student Loans 229 What Kind of Loan Do You Have? 231 Figuring Out Who Holds Your Student Loan 233 Canceling Your Loan 234 Postponing Payments 237 Repaying Student Loans 238 Getting Out of Default 242 Filing for Bankruptcy When You Can’t Pay 244 Consequences of Ignoring Student Loan Debt 245 Where to Go for Help 245 [...]... the steps you can take to avoid bankruptcy when appropriate Gives you practical tips and information Solve Your Money Troubles contains over 20 sample letters and statements that you can use to: • get the bill collectors off your back • ask a creditor for more time to pay, or • ask a creditor to lower the amount of a bill 2  |  Solve your money troubles Solve Your Money Troubles also refers you to... Creditor Gets a Judgment Against You 292 Stopping Judgment Collection Efforts 298 15 Bankruptcy: The Ultimate Weapon 301 Kinds of Bankruptcy 303 Filing for Bankruptcy Stops Your Creditors 304 Chapter 7 Bankruptcy 307 Chapter 13 Bankruptcy 311 Will Bankruptcy Solve Your Debt Problems? .312 16 Property Creditors... Column 1: Debts and other monthly living expenses In Column 1, enter the type of debt Don’t enter a debt more than once So, for example, if you already deducted from your income in Worksheet 1 a debt that is paid out of your paycheck, such as child support, don’t deduct that same debt again here If you are married, you may not be certain which debts are yours and which belong to your spouse If your marriage... Subject to the Bankruptcy Court’s Authority 325 Applying Exemptions 330 Is Your Property Exempt? 334 Turning Nonexempt Property Into Exempt Property 343 17 Rebuilding Your Credit 347 Avoid Overspending 349 Understand Credit Scores and Credit Reports 355 Clean Up Your Credit Report .359 Your Credit Score... for information, and contains charts of state laws summarizing consumer laws, debt collection laws, credit bureau regulations, and more Helps you evaluate your individual debt situation Solve Your Money Troubles includes several worksheets to help you figure out how much you earn, how much you owe, how much you spend, and what you own With these worksheets, you can prioritize your debts, determine... expenses (such as food, housing, and utilities) and your other debts (for example, student loan payments) Having a ballpark idea of the amount of your income and debt burden is not enough to tackle your debt problem Getting precise numbers is a crucial part of the process— don’t skip it In addition to laying out how much you earn and owe, this process will help you prioritize your debts, which will then help... late fees dropped, settle debts for less than the full amount, and even reestablish credit Solve Your Money Troubles can help you take charge This book: Tells you how recent changes in the law can help you Solve Your Money Troubles explains the new federal consumer regulations and laws, enacted in 2009-2010, that provide more protections and benefits to consumers By knowing your rights under these new... you understand your debts If you know how the law categorizes different kinds of debts, you’ll know what kinds of collection efforts you can expect from different creditors and which negotiating strategies you can try with them Shows you effective alternatives to bank­ ruptcy Bankruptcy is the right tool for many people to deal with their debt problems, but it’s not for everyone Solve Your Money Troubles... else, consider combining your income and paying all of your debts with joint funds, regardless of who actually incurred the debt Enter both partners’ debts in Column 1 Column 2: Outstanding balance In Column 2, enter the entire outstanding balance on the debt For example, if you borrowed $150,000 for a mortgage and still owe $125,000, enter $125,000 If you don’t want to contact the creditor until you are... Worksheet 2 in Appendix D, you list your debts Gather the documents that show payments on all your debts, the total amount owed on each debt, and any amount past due, including any interest or fees that have been added Be as thorough and complete as possible The completed Worksheet 2 will tell you exactly how much you should be paying each month (to be current on your debts) and how far behind you are Here’s . 40 4 Prioritizing Your Debts 43 Secured and Unsecured Debts 44 High-Priority Debts 46 Medium-Priority Debts 49 Low-Priority Debts 50 Review Your Worksheets 52 5 Negotiating With Your Creditors 53 Communicate. to: •getthebillcollectorsoff your back •askacreditorformoretimetopay,or •askacreditortolowertheamountofa bill. Your Legal Companion to Solving Your Money Troubles 2 | SOLVE YOUR MONEY TROUBLES Solve Your Money Troubles also refers. Reports 355 Clean Up Your Credit Report 359 Your Credit Score 371 Build Credit in Your Own Name 374 Ask Creditors to Consider Your Spouse’s Credit History 375 Use Existing or New Credit Cards 375 Open