Question: If I incurred debt in one state then moved to another, which state laws apply?
A: It depends on the issue. The contract creating the debt may say which state law applies with respect to certain issues, but the laws of the state in which you now reside generally apply with respect to how a debt collector must communicate with you.
Question: I saw you recently on Fox News and you said something about paying credit card payments twice a month can save on interest and pay your bill down quicker. Can you explain how this works and how to do it? – Liz
A. If you are paying your credit card electronically, you simply need to make two electronic payments each month. This can be done on the credit card’s web site as well as via telephone.
If you write a check each month, you can send a check to the credit card company twice a month. The check is sent to the same address that you normally send your payment . Make sure to include the account number in the memo line of the check so the credit card company can identify the account to which payment needs to be credited.
Question: Can a collection agency attempt to serve you with a summons to appear in court to collect a debt at your place of employment?
A. Yes, you can be served at your home, your place of employment or anywhere else the process server is able to find you.
Q. How long will a bankruptcy appear on my credit report?
A. A bankruptcy can be reported on a consumer report for 10 years from the date a consumer files for bankruptcy.
We'll have Dr. Debt on the show tomorrow ready to answer your questions. Please send your question to our email or post them right here on our blog then watch Happening Now tomorrow for the answers.
During our Ask Dr. Debt segment today, Rozanne Andersen, Executive VP and General Counsel for ACA International, answered some of your important personal finance questions. If you have a question for next week, feel free to post it here or send it to us at HappeningNow@foxnews.com
QUESTION 1:
My husband and I filed bankruptcy in NY. Our debts were discharged in 2003. My question is: Can we file again in Florida?
ANSWER:
There is no limit to how many times you can file for bankruptcy. However, as a result of changes to the bankrutpcy law 2005, you must wait a certain amount of time to re-file. In order to file for banktuptcy again, regardless of where you file in the US, if your original bankruptcy was a chapter 7, you must wait eight years to file a chapter 7 bankruptcy and four years to file a chapter 13 bankruptcy.
QUESTION 2:
A collection agency called yesterday about a debt from 1996. We disputed this debt and I spoke to the credit bureaus last week, and this debt they reference is not on any of the credit files. Is there a statute of limitations on the age of old debts? I want to know where I stand if they call again.
ANSWER:
Yes, all states have statutes of limitation concerning how long a creditor has to file a lawsuit against you to collect a debt. However, with the exception of two states, even if the debt is beyond the statute of limitations, a debt collector is permitted to continue collecting the debt, but the debt collector is not permitted to threaten you with litigation when attempting to collect the debt if the debt collector knows or should know that the debt is outside the applicable statute of limitations.
QUESTION 3:
My home is paid for, but I have a few loans I'd like to pay off. There is a good possibility I may be laid off in October and I'd like to know if it is wise to take equity from my home to pay off this debt?
ANSWER:
It really does depend on your current financial situation. If you have a sufficient amount of equity, obtaining a home equity loan could be a wise option to pay off current debt. But you must remember that ultimately in the long run you are paying one debt and gaining another debt, leaving you in the same position you were before. Start working on a strong financial budget today so that should you unfortunately lose your job, you are able to weather the period of potential unemployment. But you should certainly speak with your bank or financial advisor to discuss your options.
QUESTION 4:
My ex-husband is filing for bankruptcy and I am a signer on several of the loans he is including in his bankruptcy. Can I stop him? Or is there a way to protect my credit rating? Is my 401k at risk?
ANSWER:
Her ex-husband filed for bankruptcy, and she is a co-signer on some debt. She cannot stop him from filing. There is no provision for that. However, the good news is that her 401k cannot be touched. If there is fraud involved in the 401k, or if the amount in there is more than enough to meet her retirement needs, then some states will allow creditors to attack it, but those are very rare situations. She will be liable for any debt that he files on (if she co-signed on that debt). Her credit score could be affected, to the extent that she cannot pay on all of the debts that is co-signed on… Also, it is important to note that as to any consumer debts where she is a co-signer, the creditor cannot pursue her for those debts IF HE IS IN A CHAPTER 13. This is called the "co-debtor" stay, and only applies to Chapter 13s where there is a non-filing co-debtor (such as Marie).
I have a home that is now worth less than I owe. I don't think I qualify for any of the "bailout" programs. I don't think I'll live long enough for the market to go back up so that I could break even, much less fund my retirement. What are my options? Should cut my losses and find something new in today's environment?
ANSWER:
Obviously I do not know all the facts regarding your situation, but in general terms, so long as you can afford the monthly payments I would sit tight and do nothing for at least one year. Most economists are projecting an upturn in the economy sometime in early 2010. While no one can accurately predict the future in any context much less with regard to the real estate market, I believe exercising patience is in your best interest. I am aware of some pockets in the country such as Detroit and San Diego for example where the upturn may come much slower and if you live in one of these areas you may actually have little choice but to abandon your asset and allow it to go through foreclosure. This would have grave implications on your credit rating and your future of obtaining credit in the future. As a practical matter, I do know many people are actually rethinking the definition of family household and you may have to consider the reasonableness of renting a portion of your house to raise enough income to handle your payments
QUESTION 2:
I had to close my business down this year because of the economy and now I'm extremely in debt like never before. What are my options?
ANSWER
The first piece of advice she should receive is to talk to a reputable attorney who can discuss her options with her. Those options include a settlement with her creditors, or possibly considering the filing of bankruptcy. Because her debts are not that old yet (as she closed within the last year), I am assuming that they have not filed any lawsuits. It usually takes awhile for that to happen, but that depends upon the creditor. So...she may have more time than she thinks. There is a good possibility that by being frank with her creditors or their agents, disclosing the amount of her debt, her asset situation, perhaps her age even...that her creditors will want to settle with her now. It is a good time in the industry to negotiate, or at least to attempt that process. By all means, she should speak with an attorney, someone who can go over the options of bankruptcy, but also provide some debt counseling.
QUESTION 3:
I am in $60,000 debt. what is the difference between debt settlement and chapter 13 bankruptcy? I have a good income and secure employment. What route do you recommend for me?
ANSWER
Ann asks about the differences between debt settlement and Chapter 13 bankruptcy. She has a good income with secure employment. You should know that I have a natural hesitancy about some, but not all, debt settlement companies. Many of them will take your money, and do little or nothing for the consumer. The FTC has investigated many of them, and shut down some. However, there are some that do good work. The consumer needs to do a ton of investigation of the particular debt settlement company, before she gives them any money. I would do a Google search, BBB search, etc. Chapter 13 bankruptcy still works fairly well, but she will need some counseling from an attorney on that issue. She can pay her debts over a 5 year period, and does not have to pay 100% of her unsecured debt. Most of the secured debt does get paid back in Chapter 13. An attorney would be able to advise her, based upon her specific income amount, her expenses, and the amount of her debt, if she is a good candidate for Chapter 13.
Do you have personal finance questions that you're dying to have answered. If so, please write a pithy question on our blog page or send them to the Happening Now email at happeningnow@foxnews.com
Dr. Debt will answer your questions on Friday's show.
Please send questions regarding your personal finances. Tomorrow Dr. Debt will answer your questions on our show. You can get your questions to Dr. Debt by posting them on our blog or sending them to us at happeningnow@foxnews.com
With all the breaking news going on this morning, we had to let Dr. Debt go today.
If you forgot to send in your questions for Dr. Debt send them in today! Below are some answers we wanted to bring you on today's segment.
1. Regarding Credit consolidation – on Fox News you said there were reputable companies that did not charge a fee for helping solve credit problems. Could you list some of those companies?
ANSWER:
To find out more information about free and low-cost credit counseling assistance, please visit the National Foundation for Credit Counseling Web site at www.nfcc.org. The National Foundation for Credit Counseling is a nonprofit network of credit counselors that can refer you to a reputable company. In addition to the budget calculator available on the Ask Doctor Debt Web site, the NFCC Web site also has tools you can use for free such as a budget worksheet and helpful consumer tips.
2. Can a collection agency keep my credit card information on their files or banking information without consent?
ANSWER: Debt collectors often retain certain information regarding an existing financial obligation, including credit card information or certain banking information. However debt collectors must follow both federal and state law to ensure information they retain is protected.
3. What happens to a defaulted, guaranteed, non-discharged student loan after the automatic stay of bankruptcy has been lifted?
ANSWER: If a debt is not discharged, it is still owed even after a bankruptcy proceeding has concluded. Once the automatic stay is lifted, the lender may resume attempts to collect the loan.
Our weekly installation of Dr. Debt would be nothing without your questions. Tomorrow Dr. Debt will be answering your financial questions, live on our show.
Question: I am getting sued over an amount of $600 by a creditor. I’ve just lost my job and had a baby. I can’t afford to pay anything, what can I do?
Answer: You need to attend the hearing in court on the date and time listed in the complaint you received. You can explain your situation to the creditor and the judge to see if you can work out a payment plan. If you don’t owe the $600 to that creditor, you need to explain why not to the creditor and the judge.
Question: I have an account with major credit card near maximum. I pay a little more than minimum payment each month. About a year ago I had to use the cash advance feature in emergency that had a very high interest rate. Now, none of my monthly payments is being applied to the cash advance balance. The balance on the cash advance is ballooning. Is there anyway to pay on the cash advance balance without paying off the regular balance first?
Answer: Your credit card agreement will determine how your payments are applied to the balance on the card. You’ll need to pay off the balance in the order specified in the agreement. You could try to transfer the entire balance to a different low interest credit card so you aren’t incurring higher interest on the cash advance balance.
Question: A civil judgment in Tennessee which is 8 years old is keeping me from buying a house. What can I do about it?
Answer: Civil judgments can be reported to consumer reporting agencies for 7 years or until the statute of limitations expires, whichever amount of time is longer. In Tennessee the statute of limitations for civil judgments is 10 years so the judgment can be reported for 2 more years. The party to whom you owe the judgment may be able to renew the judgment once the 10 years expires, extending the reporting period. In order to resolve the judgment, you should contact the party to whom it is owed and try to work out a payment plan. If you don’t pay the judgment and are eventually able to buy a house, the person who holds the judgment could get a lien against your house.
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