How Can I Remove a Repossession?

Having a vehicle or other item repossessed can be financially, and even emotionally, devastating! Many times, a repossessed item can represent loss of freedom or income (in the case of a vehicle) or maybe loss of security or family memories (in the case of a home). These alone are bad enough; however, then comes the realization that a repossession reported on your credit report will cause your credit score to plummet!

Though you may feel like this is the end of the world, rest assured that it isn’t! Things will get better. I can’t help you get your vehicle or any other item back once it’s been repossessed; however, I can help you understand how to begin rebuilding your credit. To start, you will need copies of your credit reports. You can obtain these from the three major credit reporting agencies – TransUnion, Equifax, and Experian. Upon your request, these three major credit reporting agencies are legally required to provide you with a copy of your credit report every twelve months.

When you have received all three of your credit reports, you should schedule some time to sit down with all three to review them. Repossession entries will include an itemized list of all fees related to the repossession, such as storage and towing. Gather all of the receipts you have which relate to the repossession and compare them to the amounts listed on your credit report. If any of these amounts are incorrectly reported on your credit report, you should dispute the items with the credit reporting agencies.

If you find erroneous entries on any of your credit reports, it would behoove you to write a dispute letter to the relevant credit reporting agencies. Your dispute letter should outline the reason for your letter and should request the removal of the repossession entry. Be sure to include the relevant credit report with your letter and highlight the erroneous information. Be sure to also inlcude copies of the substantiating documentation, such as receipts. Keep copies of all correspondence and enclosures.

Once the credit reporting agency has received your dispute letter, it has 30 days to contact and verify the repossession with your creditor. If the creditor cannot or does not verify the repossession amounts within the alloted time frame, the credit reporting agency is legally required to remove the entry from your credit report. You should receive a letter from the credit reporting agencies which indicates what action was or was not taken with regard to your account and why. If you are unsuccessful in removing the repossession entry, it will continue to be listed on your credit report for seven years.

In the event you are unable to remove your repossession entry using a dispute letter, you might be able to have the entry deleted or its status improved by negotiating directly with your creditor. A promise of partial payment or payment in full might persuade your creditor to delete the repossession entry. You should insist on a written agreement if you and your creditor are able to come to terms. Additionally, make sure that you obtain your creditor’s signature on the document and that you sign as well.

Although repossession can be devastating, it is something you can recover from. Times are tough and you are not alone in this plight. Just remember that there are better days ahead!

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How to Improve Your Credit in 2010

Your credit rating is more important in 2010 than any other year in recent memory. There is less available credit than any other time in recent history. Credit card companies launched a massive wave of cut backs. You may have noticed your available balance was slashed overnight.

It is now even more difficult to be approved for a home mortgage. In order to be approved for a mortgage today, you must now have a minimum credit score that is 40 points higher than a few years ago and, if you are hoping for reasonable rates, you will need a minimum score in the high 600′s.

You can rest assured that it will be almost impossible to obtain new credit in 2010, especially if your credit score isn’t up to par.

What this means is that you need a plan to get your credit in top shape for the new year.

I spent several hours last weekend writing down my financial goals for 2010, which included my FICO score goal of 775.

I hope that you have decided on some financial goals for yourself. Once you have made a list of goals, you will need a plan for obtaining success. Erasing negative items from your credit report and improving your FICO score should be included in your overall strategy. A formula for achieving these goals follows:

Credit Strategy #1: Questionable Negative Items Should Be Deleted From Your Credit Reports

You should immediately attempt to remove any questionable late payment, repossession, collection, charge off, bankruptcy, or other negative item, by disputing the information.

To accomplish this, you can use the dispute form letter which you will find here.

Sometimes, items such as judgments, charge offs, and repossessions are particularly stubborn to remove from your credit report. As these items have a tendency to be a bit more “sticky,” you may require something more forceful than a standard dispute letter.

You might consider a process called “debt validation” where you demand that the original creditor validate a debt. (It’s a lot different than disputing with the bureaus – yet super effective for removing collections and charge offs.)

It is probably best not to attempt debt validation on your own. I tried to do it myself and failed miserably. In fact, I did such a poor job that the creditors just ignored my correspondence altogether.

Credit Strategy #2: Build Good Credit

The good news is that this is easy to do if you already have an unsecured account. Keep paying those accounts on time. In fact, I suggest setting up an auto payment system so you never slip up. Plus, this saves postage so you are saving twice!

However, if you don’t have an unsecured account, like a MasterCard or Visa, it can be a bit more difficult. If your credit score is in the 500 range, it will be hard to obtain an unsecured card.

Credit Strategy #3: Stay the Course

Don’t lose sight of your goal and what you want to accomplish. Rebuilding your credit will take time. The sooner you get started the better. It is wise to keep track of your credit score by maintaining a detailed log. Begin your log by noting your credit score as of today’s date and tracking it as you rebuild good credit and as questionable negative items are removed. If you are successful with your goals, your credit score should increase each month.

Don’t become down-trodden if things don’t work out the way you think they should. Different strategies may be available to tackle an issue.

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Can I Have a Judgment Deleted?

If you have lost a lawsuit involving a debt or did not show up for court and lost the case by default, the judgment against you can be vacated. To do this you would file a Motion to Vacate.

When you file a Motion to Vacate, you are in essence suspending the judgment and requesting a new hearing. If the Motion is granted, you will need to be prepared to argue for dismissing the case.

What Are the Steps I Need to Take?

The following steps will yield results if followed carefully (depending upon state law):

1. It is important that you research and master your state’s court procedural laws. When you do this, you will learn the proper way to draft a motion and for what reasons a judgment may be dismissed. It is imperative that you have a grasp of the court’s rules. By performing this research you will discover the reasons a case may be thrown out on a technicality.

2. Complete your Motion to Vacate and take it to the original court that granted the judgment. File your Motion with the court clerk and determine if any additional documents need to be completed. You will probably need to pay a filing fee. Get certified copies and mail the original to the plaintiff by certified mail, return receipt requested. Your creditor or collection agency is more than likely the plaintiff.

3. You will need to mark your calendar with the date and time of the hearing. The court clerk will schedule the hearing and likely mail the notice to you so make sure the court clerk has your correct address.

Thirty-five days are given to the plaintiff to respond to the motion. In some cases, the plaintiff may attempt to settle out of court or possibly not even appear at the hearing. You will win by default if the plaintiff does not appear in court!

You should demand that the creditor file dismissal paperwork and require that the judgment be withdrawn by the credit reporting agencies if your creditor wants to settle out of court. Be sure to commit your agreement to writing in the form of a legal agreement.

“Unpaid’ judgments are very damaging and “paid” judgments are not much better! Because of this you should do everything in your power to negotiate a complete deletion of the judgment from your credit report.

If the case does reach the hearing stage, preparation is key! You will need to be ready to prove the creditor wrong and trip him up. Because the creditor brought this case before the judge, the creditor is the party who will need to prove the merits of the case.

Some ideas moving forward include:

1. Be ready to attack the creditor’s documentation. For instance, demand that the creditor produce a copy of the original contract for the debt.

2. It is very important to review and understand your state’s statute of limitations laws. You may not have an obligation to pay the debt if the debt is outside of the statute of limitations. In this case, the matter will be dismissed.

3. If it appears that a judgment is in your future, think about employing a consumer credit attorney for advice. Consumer credit attorneys make their living handling cases just like yours and will be able to guide you through the process and offer valuable advice.

Judgments are destructive and will cause you financial woe for years to come. You should do everything in your power to avoid a judgment!

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Can I Avoid a Judgment?

The last resort for a creditor to obtain payment from a debtor is to try to obtain a court judgment. You actually agree to this when you take out a loan or apply for a credit card. The fine print in the document states that you agree to be sued if you don’t make your payments each month.

The main goal in a creditor’s lawsuit is to prove that you actually owe the debt. It is smart, if you really do owe the debt, to attempt to resolve any pending legal action quickly. It is often that a creditor may prefer a settlement to continuing with a legal action. To show good faith, it is helpful if you can provide an up-front partial cash payment.

You will want to know if the statute of limitations is still in effect. If not, the debt is no longer legally collectible. However, it is important to understand that the payment of even a small amount will reinstate your obligation to pay.

If the matter is being handled by an attorney for the creditor, consider calling the attorney and making an offer. No matter what you decide to offer, the attorney is bound legally to discuss your offer with the creditor.

You should do what you can to avoid going to court. Also, keep in mind that a settlement is always better than a court judgment. If your creditor is able to obtain a judgment, your credit report will reflect the judgment and the entry can remain on your credit report for up to ten years.

SHOW UP if you are forced to go to court! Many people who cannot reach a settlement with their creditor make the error of not attending the hearing. This, in turn, means that the creditor will be granted the judgment by default!

It is important to note that if you do appear, you should be prepared to present a defense and work toward a resolution of the matter. You will earn the respect of the judge and plaintiff creditor by doing so. This will require that you present a defense on your behalf.

You will receive a notice of judgment if the creditor is successful in his suit. The judgment will allow you 30 days in which to pay the debt in full. After the 30 days has run and if you still have not paid the debt, there are additional legal actions which the creditor may take. For instance, the creditor may be allowed to place a lien against your home or property. If a lien is placed against your home, the lien will have to be paid in full prior to the sale or refinance of your home.

The garnishment of wages is another legal remedy which is allowed in some states. Additionally, sometimes creditors are allowed to seize personal property to collect the debt.

The result of a judgment on your credit score will be far-reaching. Besides a loss of borrowing power, other areas of your life can be adversely affected. For instance, your chances of promotion or a new job opportunity may not materialize! It is wise to avoid a judgment at all costs.

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Negotiating With Credit Card Collection Agencies

Collection agencies devoted to credit card collections have in recent times become busier and busier. This is because more and more people are having trouble keeping up with their bills.

Typically, the problem begins with one missed payment. This missed payment will likely mean that you are assessed a late penalty, which in turn might mean that you exceed your credit limit. When this happens you are assessed another penalty because of credit limit overages. Now, you may be $100 or so over your credit limit and you still haven’t paid your monthly minimum payment.

Before things get worse, it is best to contact your credit card provider and explain your situation. Most credit card providers are willing to work with you. It is best to put a stop to things at this point instead of letting things get out-of-hand, resulting in the credit card provider selling your debt to a credit card collection agency.

Debt sold to a credit card collection agency will normally be purchased at a fraction of what you actually owe, typically for cents on the dollar. As credit card collection agencies make their bread and butter from collecting as much as possible from those who owe debt which they have subsequently purchased, they may at times be harassing and even threaten legal action.

In reality, most credit card collection agencies would prefer to work with you to obtain payment of the debt than to launch a legal action which will be time-consuming and costly. If at all possible, this would be a good time to offer to pay the debt in full at a reduced amount. Make sure that the resulting agreement is in writing, that you retain copies of all the negotiation documentation, and mail all correspondence to the credit card collection agency by certified mail, return receipt requested.

Typically, it is a good idea to begin the negotiation somewhere around 25% of the original balance. Though this sounds low, remember that the collection company probably purchased your entire debt at only about 10% of the original amount. It is likely that the collection company will decline this offer and will issue a counteroffer, which you then should counter as well. This will continue until you either come to an agreement or the negotiations discontinue.

If no agreement is reached, the credit card collection agency may lose the momentum for collecting your debt. It may determine that collecting a smaller amount is better than nothing at all. It may also decide that selling the debt to another credit card collection agency is a better idea. If this happens, the process will begin yet again and run its course.

It is good to remember that at any point in this process, beginning with the credit card provider itself, a legal action could be filed against you. Additionally, your credit score is continually and quickly decreasing. A court judgment will annihilate your credit score even more.

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Second Chance Bank Accounts

People who have or are, for various reasons, facing financial difficulties and have had their bank account suspended or closed should look into a second chance bank account. Another name for second chance bank accounts is non-ChexSystems checking accounts.

Any type of financial misdemeanor will place the account holder at risk of being included in ChexSystems. About 80% of the country’s banks utilize ChexSystems which is a consumer reporting agency and check verification service. This company records information about a consumer whenever a check is bounced, the overdraft limit is exceeded, or a payment is not honored.

If you habitually perform any or all of these actions, you will likely be reported to ChexSystems and will be entered into ChexSystems reporting system. This may cause your bank account to be closed. If this occurs, it may be extremely difficult to open a new bank account.

Second chance bank accounts allow you a chance to get things back under control. These checking accounts operate like standard bank accounts in that you can access your money and pay your bills. For people whose bank accounts have been closed, these second chance bank accounts offer a needed opportunity to start over again.

Second chance bank accounts are offered by a variety of banks and finance companies. Some online companies even offer this type of checking account. To apply, you will need to complete an application. You will also need to provide personal information such as a current address and proof of identity, all of which will be verified.

Before you do this, it is a good idea to get a copy of your ChexSystems report. You should review the report for any inaccurate or false information. If the report contains any information which is false or inaccurate, the information can be revised or deleted. It may well be that this false information is what is keeping you from being able to obtain a checking account in the first place.

However, if all the information is accurate, then a second chance bank account is likely the next step to take. These accounts are easy to open and are recommended for people who need a second chance.

Be sure to shop around prior to applying for a second chance bank account. Sometimes, companies will charge monthly or annual fees in addition to one-time payments to open the account. Therefore, be smart, shop the market, and get the best deal you can.

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Obtain Your Credit Report Today

Requesting a copy of your credit report is easy and is the first step toward rebuilding your credit. Read on to find out how to obtain a copy of your credit report and to learn some of the benefits of reviewing your credit history.

A credit report will help you rebuild your credit and this is the most common reason people request a copy of their credit report. A person’s financial history is listed in its entirety on their credit report. The entries will include identifying information, payment history, and credit accounts. A quick review of your credit report will let you know if all of the information recorded is accurate or if there are some inaccurate or false entries. Any inaccurate or false information listed has already affected your credit score.

You can dispute any inaccurate or false information you discover on your credit report. To do so, you will need to send a dispute letter to the credit bureau requesting the correction of the disputed item. The credit bureau then has 30 days to obtain verification of the recorded information. If the credit bureau does not receive verification of the disputed entry, it must delete the entry in its entirety. If this happens, your credit score should increase.

Credit reports are also helpful for finance and budgeting purposes. Obtaining your credit report allows you to view your credit status in one neat, concise report. A credit report can allow you to determine if you should work to consolidate your debt and can assist with prioritization of payments.

Identity theft is another reason for requesting a copy of your credit report. By obtaining a copy of your credit report you will be able to compare your knowledge of your recent credit transactions against what has been reported to the credit reporting agency. Identity theft is a very real concern and threatens a person’s credit worthiness in addition to their financial situation.

Your credit report can be obtained several different ways. There are internet companies that offer copies of credit reports and you can contact one of these companies. Alternately, you can contact one of the three major reporting agencies – TransUnion, Experian, and Equifax – for a copy of your credit report. Pursuant to Federal law, these major credit reporting agencies are required to provide you with a copy of your credit report, free of charge, once every twelve months. To request a copy of your free credit report, you can call Annual Credit Report at (877) 322-8228.

It is wise to obtain a copy of your credit report. Request yours today and when it arrives, sit down and review it for any inaccuracies so you can begin to rebuild your credit.

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How Will Auto Repossession Affect My Credit Rating?

Auto repossession in and of itself is not a good thing and will severely affect your credit score. Please read this article completely to discover how auto repossessions come about and what can be expected.

To begin with, you can face repossession after missing one or more payments on your vehicle loan. Despite popular belief, if you miss just one loan payment, the creditor can legally move to repossess your vehicle. It is not necessary for multiple payments to be missed. The creditor will usually make calls to you and send one or more letters.

Your creditor may begin the process to repossess your vehicle if you do not contact him and try to work out a payment schedule or, if you have the money, bring the account current. You may be able to stop the repossession if you work with your creditor. If you are successful, you will be able to retain possession of your vehicle and keep your credit rating intact.

Depending upon the state you live in, your credit rating could be affected for seven to ten years. If this were to happen, your credit rating would be seriously damaged and it would be difficult at best to obtain any kind of credit.

If you see an auto repossession in your future, it would be wise to contact your creditor to discuss your options. Typically, creditors would prefer to work out an arrangement than repossess your vehicle. This would shelter your credit score from a big hit.

It is most likely that you will be responsible for paying any towing charges, storage costs, repossession fees, and additional costs resulting from the repossession. Often, these costs can skyrocket to several hundred dollars.

Auto repossession is not a pretty thing and it is important that you understand this. If you see an auto repossession ahead and do nothing to try to turn it around, you will greatly harm your credit score as well as lose your vehicle. So, call your creditor and see if you can work out a payment plan. If successful, this will result in your keeping your vehicle and not damaging your credit rating.

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The Pros and Cons of Bankruptcy

If you are considering bankruptcy, you should research all aspects of the process and the possible outcomes. This article is meant to be a very brief summary of the pros and cons of bankruptcy.

As it becomes increasingly difficult to make ends meet, many people begin to think that bankruptcy may be a good idea. Before jumping into a decision like this, though, you should research what bankruptcy really is.

When you file a legal proceeding to have your debt discharged (Chapter 7) or to reorganize your finances (Chapter 13), you have filed a bankruptcy proceeding. A bankruptcy filing is normally done voluntarily and because the debtor is having trouble paying his creditors.

Essentially, people consider bankruptcy so they can start fresh. Once the bankruptcy is completed, the person will be able to start over with no harassing phone calls and knowing that he can live within his means.

We need to clear up some common and erroneous ideas related to bankruptcy. Some people believe that filing bankruptcy will cause you to lose your job. This should not be the case. Additionally, some people, probably the same people, believe that you will lose your social security benefits if you file bankruptcy. Again, this should not be the case. Lastly, there are those who believe that your credit report will be so damaged that it will never be the same again. It is true that your credit score will take an instantaneous hit by filing bankruptcy, however, with time and diligence, it can be repaired.

The major issue with declaring bankruptcy is that your credit score will be dramatically affected and will instantly plummet hundreds of points. Because of this, you will likely be denied for all credit products for several years, possibly up to ten years.

Something else to keep in mind is that, depending on the bankruptcy chapter filed, some of the debtor’s assets may be lost in order to pay creditors. However, some assets are exempt, thankfully. You should discuss the different chapters of bankruptcy and the possible outcomes when you meet with a bankruptcy attorney.

Another thing to consider is the cost involved. When you file a case in the Bankruptcy court, you will be required to pay a filing fee. In addition to this, there are attorney’s fees which can run $2,000 or more. Therefore, if your total debt is only a few thousand dollars, it would behoove you to consider working with your creditors to arrange a payment plan rather than considering bankruptcy.

Professional counsel from an experienced bankruptcy attorney should be sought if your are thinking about bankruptcy. A seasoned bankruptcy expert can guide you through the process and give you an idea of the expected outcome.

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