Then, you can use your own money as if it were credit, using it up and paying it off over a period of time to show that you can repay a credit card on time as agreed. The secured credit card provider will report your repayment history to all three of the credit bureaus, which are Experian, Equifax and Trans Union, and this will improve your credit. Over time, your credit will go up, but no risk will actually be involved at all because you will be spending your own money rather than spending the credit card company’s money, which is a lot more risky for the company if your credit is less than perfect.

If you are serious about jump starting your credit and boosting your credit score, then it would be wise to find out more about how you can restart your credit with a secured credit card. Secured credit cards do not usually have any annual fees, and usually do not have interest rates at first during introductory periods. This allows you to build your credit back up without having to worry about interest rates, annual fees, finance charges or paying other fees that you cannot necessarily afford to pay. In other words, learning how to restart your credit with a secured credit card is one of the best ways that you can improve your credit quickly and easily without any risk, but with a great deal of rewards. If you have not yet taken out a secured credit card, today is a good day to find out more about these unique credit card options because there are plenty for you to choose from.

]]> http://www.thecredittoolbox.com/restart-your-credit-with-a-secured-credit-card/feed/ 1 http://www.thecredittoolbox.com/if-you-go-bankrupt-does-it-affect-your-spouse/ http://www.thecredittoolbox.com/if-you-go-bankrupt-does-it-affect-your-spouse/#comments Thu, 28 May 2009 09:00:40 +0000 CTB http://www.thecredittoolbox.com/?p=264

There may be a point at which your debts are so overwhelming that you have no way to pay them. A medical emergency or loss of employment puts many people in such a hole that the only way out is bankruptcy. If people are married, however, they have another concern: if you go bankrupt, does it affect your spouse?

The answer is yes and no, depending on your specific situation. The time to ask if bankruptcy affects your spouse is when you are first establishing your marriage and your financial situation.

• Community Property – Some states are community property states, meaning that all assets in a marriage are considered joint, whether or not both spouses have their names on those assets. In the same way, any debt in these states also belongs equally to both spouses. Therefore, even if you are the one with the credit card debt or with the huge medical bills, your spouse is on the hook for those debts as well if you live in a community property state.
• Loan Co-signing – If you and your spouse have joint accounts for home, credit card or medical debt, then your spouse will be affected by a bankruptcy filing. Your spouse may need to file with you if they are unable to pay the remaining debts themselves. Regardless, they will still be on the hook for the debt, even if you file for bankruptcy.
• Pre-existing Debt – If one spouse in a marriage had debt prior to marriage, then they are likely solely responsible for that debt. If that is the debt that is requiring that they file bankruptcy, it is not necessary for the spouse to file. Engaged partners should make full financial disclosure to one another so that they both know about any existing debt. If one spouse, or both spouses, is in debt prior to marriage, it is best to avoid opening any joint accounts of any kind. Instead, make up an agreement about which expenses are the responsibility of which spouse.
• Consult an Attorney. Because these issues can become very complicated (for example, debt on real property is treated differently from consumer debt) you should see an attorney and discuss all of the issues before filing for bankruptcy. You will want to make the best decision to promote your future recovery, and doing things right in the beginning will allow you to do so.

]]> http://www.thecredittoolbox.com/if-you-go-bankrupt-does-it-affect-your-spouse/feed/ 2 http://www.thecredittoolbox.com/the-difference-between-a-consumer-proposal-and-bankruptcy/ http://www.thecredittoolbox.com/the-difference-between-a-consumer-proposal-and-bankruptcy/#comments Wed, 11 Mar 2009 19:14:16 +0000 CTB http://www.thecredittoolbox.com/?p=186 The Canadian government provides an official, legal arrangement for people in debt difficulty to negotiate with their creditors to repay debt on different terms that those they originally entered into.

This device, called a Consumer Proposal, is different from bankruptcy, and gives the debtor some significant advantages over bankruptcy or paying the debt back over the full terms of the loans.

The advantages to the consumer with a Consumer Proposal are that:

1. The interest rates on all debt are frozen.

2. The consumer is able to negotiate to repay a portion of what (s)he owes, if the creditor agrees.

3. Creditors are unable to take legal action against you, and the credit bureaus stop calling.

4. Any wage garnishments in place, except those for child support or alimony, are ended immediately.

5. A majority of your creditors must agree to your proposal or it is void. However, if a majority (over 50%) agrees, then all creditors are considered to have accepted.

6. The maximum time period for paying the debt is 5 years.

7. The credit ranking for a consumer proposal is slightly better than that of bankruptcy.

With a consumer proposal, the debt is not eliminated, but is nearly always reduced. The creditor agrees to make payments of a certain amount each month for a specified length of time.

With bankruptcy, the debtor is determined to be insolvent; in other words, owes at least $1,000 and is unable to make payments when they are due.

In the case of bankruptcy, there are limits on the value of personal belongings, household goods, tools for work, farm tools and vehicles that a person in bankruptcy is allowed to keep. If the value of any of these items exceeds the moderate limits set by statute, then the debtor is required to liquidate them and divide the money between the creditors.

Additionally, a bankruptcy involving assets over $10,000 are reported in the newspaper and the mark stays on the creditor’s credit report for seven years.

However, creditors do stop calling, and the debtors are allowed to keep all wages after the filing, allowing them to make a new start.

If the debtor has the ability to make payments under a consumer proposal, it is often a better choice, since creditors can oppose a bankruptcy discharge if a debtor had the means for a consumer proposal and chose not to utilize it.

The affect on the credit score of the debtor is also lower with a consumer proposal.

Since the beginning of this 8 steps process to repair your credit bureau until step 8, there is a time delay of about 2 years. If you went really bad on your credit cards and you have several bad debts, the process may be longer. Re-establishing confidence with banks and credit card companies takes time and effort. If they usually give you a chance for your first request, if you didn’t pay them, they will wait awhile to lend more money.

At the 8^th step, you should be in a much better financial position. Your debts should be always paid on time; they should have been decreasing since you are using the snowballing method (to be explained in a later post) and your credit score should be increasing as well.

With good credit comes great temptation. You will start receiving credit card offers and pre-approved loan letters. Throw them in the garbage! There is nothing worst than applying to more credit cards or taking credit simply because someone is offering it to you.

Since you made so many efforts to repair your credit bureau, you should definitely follow-up with credit reporting agencies every year to make sure that everything is in order. Make sure that your bad credit rating are being erased on time and that there is no mistake shown.

I would say that banks, credit card companies and loan companies are pretty fast to report late payments but they may sometimes take their sweet time before reporting that the debt has been paid of and cleared. This is why it is so important to double check each item on your credit bureau.

By ordering your credit report every year, you make sure that your Beacon score will increase accordingly to your efforts. It is also motivating to see your progression from year to year and to finally see that your efforts show on a piece of paper.

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You want a new kitchen table? Plan it in your budget and put money aside until you can pay it off completely without using your credit card.

If you were able to get to this point, this means that you were able to identify what went wrong in the first place. Keep it on a post it that you will tag on your budget sheet. This will help you remind how you got into financial trouble and how hard it was to get out of debts.

You may have to change friend

As it is the case of any of our habits, we are influenced by friends and family. If people around you have spending problems or they are maxed out and looking for money all the time, this may be the time to say goodbye and take a new start. This will surely be hard, but if you change your lifestyle, you will ultimately create a trench between you and them. How come an individual that is always buying more and more stuff on his credit card could understand one that is saving systematically and thinking twice before going out? Flirting with bad influences is the best way to get back into the abyss of debt.

So you have 2 options: either you split up or you convince them to go your way. By sharing your savings goals, you may be able to help each other and achieve them faster. This will be also helpful to have somebody to talk too when you are depress or discouraged in front of all your debts. Repairing your credit is not an easy task!

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