How Long Will Bankruptcy Stay On My Credit Report?

You'll find the answer in Andrew Leckey's Your Money column, for which I was interviewed. Click here for the answer.

You can rebuild your credit after bankruptcy, and often more quickly than you think if you are proactive in your approach.

Can you make room for an animal in need?

Over the past couple of years we've been the lucky foster parents to more than thirty kittens and several pregnant cats who had their babies in our home. Our local Humane Society does a wonderful job caring for many animals, but kittens cannot stay at the shelter until they are 8 weeks old. So they rely on volunteers to keep them until they are old enough for adoption. This is a picture of just three of the many adorable babies we've fostered.

The shelter provides food and medical care when needed (that little yellow tabby tried to jump from a chair to table and dislocated his hip!) And we buy additional food and cat litter to help out.

Yes, it is very hard to give them up! The little tabby in the middle was one of our absolute favorites, and we found a home for her with a friend.

But at the same time, we know the alternative for them would be much worse. They come to a loving home and after eight weeks we send them to be adopted to forever homes...then wait for the next call! So many animals are in need of a loving foster home until they find a forever home. If you can help, contact a local shelter or animal rescue organization.

Federal Reserve Proposal To Change Credit Card Disclosures

The Federal Reserve is proposing changes to credit card disclosures. The three main changes I see as most beneficial to consumers are:

1. Requiring issuers to stop calling a credit card rate fixed unless it really is. Under the proposal, a rate can only be called fixed if it specifies the time period, and it can't be changed during that time period, or if there is no time period specified, it won't change at all.

2. Give consumers 45 days notice before a change in terms. Currently, credit card issuers can change terms with just 15 days advance written notice, which barely gives you enough time to read the disclosure much less act on it.

3. Give consumers 45 days advance notice before raising their interest rate because they are late with a payment.

What do you think? Would these changes make a difference to you?

Can You Really Settle Your Own Debts for Pennies on the Dollar?

Most of the consumers contacting me right now have $25,000 to $50,000 or more in unsecured card balances. To them, settling balances for 50 cents on the dollar and avoiding the dreaded Chapter 7 or 13 is very appealing. I used to think settling on your own, if you have more than one or two cards, is too difficult for consumers. Creditors and collectors are simply too aggressive and have the upper hand.

But I've changed my mind.

I reviewed a program from Charles Phelan, an expert who was involved with one of the leading settlement companies in the early days (years ago). His audio/workbook seminar program goes into great detail on exactly how to settle your own debts. I listened to every word and found it to be one of the best programs I have ever heard on a credit topic. (And he has recently updated it. I am listening to the new version now.)

I had dinner with Charles in Southern California, and found him to be incredibly knowledgeable and genuine his is desire to help people get out of debt without having to pay excessive fees to all the rip-off artists that have cropped up in this business recently.

If you have ever wondered about negotiating lower pay-offs on your debts, I highly recommend his program. Because Charles is so in demand, he has partnered with a firm that offers the best of both worlds: an affordable do-it-yourself program (with Charles' training manuals and CDs) as well as expert settlement services when you need them.

You'll find an informative video on their site at UltimateDebtNegotiationSolution.com Again, Charles' do-it-yourself program is fabulous and I recommend it, and now you can get it along with expert help if you need it, on a results-only basis.

Here is an email I received from someone I referred to this program last year: "Thank you so much for turning me on to Charles. He is incredible---saved us from declaring bankruptcy. I still have a long way to go---we had massive debt, however, we will end up settling for less than 40% when we're done. Charles's fee is so reasonable---it's SO WORTH IT! He is truly a hero to consumers who would otherwise never find their way out of debt. Please tell other women about him---he really helped our family find a way out of a terrible situation."

I know from my conversations with consumers that some people will still want to hire a firm to help them (they are too busy, too intimidated, etc.), so I still also refer consumers to a firm that will do it all for you. But now motivated do-it-yourselfers now have an excellent program to guide them through the process.

But the longer you wait, the more you'll miss out on the best money-saving strategies. So if you need help resolving your debts, check these sites out today!

Cool Tool Makes a Comeback!

Did you know merchants can't require a minimum purchase when you pay with plastic?

CHIGAGO SUN-TIMES REPORTER'S TERRIFIC TOOL IS CREATING QUITE A STIR

I've been helping consumers find solutions to their c r e d i t questions for so long now... I am
sometimes amazed at how little things change.

Back in the late 1980's I was with the consumer group Bankcard Holders of America. We broke the story that the two major card associations do not allow merchants to require you to make a minimum purchase in order to use your plastic when you buy something.

Reporters went nuts over the story. I did hundreds of media interviews.

We quickly found that most merchants couldn't care less what the customer said about the rules, so we created a simple walletcard that consumers could carry to let the store managers know what the rules are.

Fast forward to a couple of weeks ago, when I got a call from Stephanie Zimmermann, a reporter at the Chicago Sun-Times.

She told me she was getting quite a response to a story she ran on minimum purchase rules, and that she wanted to do a follow up. I reminded her about the wallet card.

I was thrilled then to get a link to the story she ran...including her own version of the wallet card.

She has even created an ad hoc group, the consumer Movement Against Illegal Minimums or 'MAIMs'.

If you get irked when a merchant imposes a $10 minimum purchase but you only want to spend $5, you'll want to check out Stephanie's story and print out a copy of her Wallet card.

To get your free MAIMS wallet card use this link.

Inquiries I Don't Recognize on My Credit Report

Question from a reader: I just applied to buy my first home and was surprised at some of the items on my credit report. 2 of the companies had said that I had had 2 credit inquiries in the last 90 days that had a "derogatory effect" on my credit. One of the inquiries was for the house, the 2nd one was from ACF Medical Services. I have no idea who this company is and certainly did not give them approval to run a credit inquiry on my report. What is the next step to have that inquiry removed and who do I report this company to? It seems an extreme invasion of privacy that this company committed.

Answer: First, keep in mind that inquiries are a very small part of your credit score, and the negative effect from those inquiries are likely minor, unless you have a low credit score -- in which case every point counts. By law, you must be supplied with the top four factors that affected your score, and sometimes those factors are relatively minor if your credit is otherwise strong.

Nevertheless, you are smart to investigate to make sure that someone isn't accessing your credit improperly. Another concern I have is that there may be a small medical bill that has slipped through the cracks and been turned over for collections, which could result in that type of inquiry. (I don't know that particular company but it sounds like a medical collection agency. )

Your credit report should list contact information for that company. If it does not, the credit reporting agency must give it to you if you request it. Once you get it, send a letter certified mail to ACF and ask them for an explanation. If they do not respond, you may have legal recourse against the firm. Attorney Robert Brennan has some good information about that on his site.

If it is a legitimate bill, try to settle it with the collection agency before it appears as a collection item on your report. That alone could drop your score significantly!

Good luck and let me know how it turns out.

Online Mortgage Rate Searches Serve Up Privacy Concerns

Search for mortgage rates online today at virtually every mortgage shopping website and what you're really doing is turning your personal information over to be sold as a lead to multiple lenders. That's right. In the guise of getting a so-called "rate quote" you'll fill out detailed information about your financial life (perhaps even agree to have your credit reviewed) and that information will typically be sold and resold to multiple lenders.

There is one consumer-friendly exception I'll tell you about in a minute.

In the meantime, here are just a few threats to your online privacy:

Trigger leads: When your credit report is reviewed in conjunction with a mortgage application, you are identified as a “hot” mortgage prospect with the credit reporting agencies, and your information will almost immediately be added to “trigger lead” lists. These lists are then sold to lenders who will contact you to try to get your business. Trigger lists often include such details as your name, address, and telephone number, and sensitive information such as credit scores and the amount of debt you carry. Trigger leads may be sold to multiple lenders, or even to “lead aggregators” who then resell that information to more than one lender.

Lead generators and aggregators: Many companies promising fast online mortgage rate quotes are simply trying to entice you to provide detailed information about your loan needs. Lead generators sell that information directly to one or more lenders, or to lead aggregators, who then sell those lists to multiple lending companies. Again, these lists may include sensitive information such as your name, addresse, telephone number, income, debt and creditworthiness.

Phishing Fraud: Be cautious about providing personal information in conjunction with online mortgage advertising come-ons because, in a few cases, ads for very low-rate mortgages have been used to gather information for “phishing” scams. In these extreme cases, there’s no lender ready to provide the promised loans, but instead, the details gathered are used to commit identity theft.

Advice for Mortgage Loan Shoppers

Shopping online for a mortgage can still be the most efficient way to compare offers, but you must be careful to protect your personal information. Here are the top tips:

1. Call 1-888-5OPT-OUT or visit OptOutPrescreen at least one week before shopping for a mortgage to request the three major credit reporting agencies block your name from pre-screening for credit offers, which include mortgage trigger lead lists.

2. Register with the federal Do Not Call Registry by calling 1-888-382-1222 or by going to http://www.donotcall.gov/. Keep in mind that by filling out a form on a lead aggregation site, you may be giving your permission to be called by multiple lenders.

3. Be very cautious about giving personal information to a company that does not disclose the names of lenders that will receive it.

4. Look for a current security certificate and/or membership with a third party validation service before providing personal information online. These services require websites to meet certain standards for data security, and help ensure data is transmitted securely online. Also take time to check out the website’s security and privacy policy.

To avoid these risks, I recommend you take advantage of the only site on the web that gives mortgage shoppers free, accurate and anonymous mortgage rate quotes: FreeRateSearch.com. You can get custom mortgage rate quotes, regardless of your credit rating, without providing any personally identifiable information. Yes, I am part of the FreeRateSearch.com team, and it aligns perfectly with my mission to help consumers find answers to their credit questions.

Give it a try and let me know what you think!

Can A Debt Collector Call at All Hours?

Here is a question I received today:

Is it legal for a debt recovery service to call on Sunday at 8:40 p.m.? I didn't answer because I didn't recognize the number,but looked it up on google. I also found a web site about this company with all negative comments. The of the company is: Portfolio Recovery, 120 Corporate Blvd.,Norfolk,Virginia 23502

The answer is: Yes, debt collectors can generally call between 8 am and 9 pm, so 8:40 pm isn't that late (though it's too bad they had to bother you on Mother's Day!)

Is this a debt you believe you owe? If so, then you need to develop a strategy for dealing with it. I would recommend two things:

1. Learn your rights at StopDebtCollectorsCold.com and
2. If you have multiple debts, read my free report for dealing with them at DebtConsolidationRX.com

It doesn't surprise me that Portfolio Recovery has bad remarks online -- most collection agencies do. That industry generates more complaints than any other. But what really matters is whether they have broken the law in trying to collect. If they have, then you may have legal recourse. If not, you'll need to find a way to resolve the debt and put the calls behind you!

A True Debt Settlement Story

“There are few things in my life that parallel the relief debt settlement gave me.”

How does debt settlement work in real life? I interviewed Roger Washington (name has been changed), a businessman from Illinois, to learn how debt settlement worked for him.

Here is Roger’s story:

I had run my home-based business for some time and things had gone relatively well until 2001. After 9/11, however, invoices that should have taken 30 days to get paid were taking 120 days – if I got paid at all. To fill in the gaps and keep my business running I turned to personal credit cards and in time found myself with a debt of more than $65,000.

The interest charges were mounting – one year alone I paid $67,000 in interest. Though I was paying as much as I could each month, my balances were going up not down. The turning point was when a sheriff served me at 5:30 in the morning for a debt I owed.

I never considered bankruptcy. I owed the debt and I was determined to pay it. At the same time, I couldn’t pay what they were asking. My health was suffering, I couldn’t sleep at night, and my wife was afraid I would suffer a heart attack.

I investigated several options and I finally became convinced that debt settlement through New Era was the way to go. I wasn’t as much skeptical, as I was hesitant. I was more worried about what would happen, but I finally decided that I just couldn’t live that way anymore.

I got all my bills together and filled out a lot of information for them. They told me not to talk with my creditors and if I did, to tell them to call them. Most of the calls stopped at that point.

I was determined to make this work and to get it over as quickly as I could. I had three or four pretty major debts of $10,000 or more each. They were the one to go quickest. They wanted their money immediately so I begged and borrowed from everyone to get enough to settle.

I also worked more, saved money and every time I had extra money I would try to settle another debt. They always let me decide whether to accept a particular settlement offer. Sometimes they told me they thought I could hold out for a better deal, but I just wanted to be rid of the debt so I took the offers.

My wife was incredibly supportive and even sold some stock to help me settle. In one year, I was finished and I can’t tell you what a relief that is. I honestly didn’t care about my credit rating at that point because my credit was already shot and so was my life.

I don’t use credit cards anymore. The quality of my life is so much better. I probably get four credit card offers a day but I toss them. I’ll never go there again.

I absolutely would recommend debt settlement. There is no way to describe the difference in my life and the way things have gone since. I went through months of trying to hold out, and got to a point where I needed to do something. Once you get in a program like this, simply do everything you can to make it work in your favor. I am positive it works.

To learn more about the company I recommend for debt settlement, visit their website here.

Does entering your PIN backward summon police?

Last week a friend sent me an email explaining that if you are ever threatened at an ATM, you can enter your PIN backward to summon the police.

Sounds like a great idea, but it's not true. You can learn the truth here.

Bookmark that site while you are at it. I always use it to check out email rumors before I pass them on.