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Ovation Archives | Ovation Credit Repair Services

Food for Thought: Social Security Benefits Can Be Garnished

By | Consumer Rights, Debt, Personal Finance

A garnish is often considered to be something that is visually pleasing on a dinner plate when we order food at a restaurant. A sprig of parsley with an Italian entrée, an edible flower with a rice dish, or a strawberry wedge on a slice of pie enhances the culinary experience. Whether for decoration or added flavor, a garnish in this sense is a good thing. If you have too many bills on your plate, however, a garnish is quite not as appealing.

A wage garnishment is a court order that instructs an employer to withhold a certain amount of your wages in order to repay a debt. For those of us who are seeking court assistance in the payment of a debt, or for those of us who are at risk of having wages or other monetary assets garnished, we may want to know in advance whether or not Social Security benefits are at risk of garnishment. Can creditors seek relief from the courts by garnishing social security benefits?

Ironically, the government agency that will defend you and protect your Social Security benefits from creditors will turn around and take legal action against you, garnishing those same benefits in a number of circumstances.

According to information provided by the U.S. Social Security Administration, creditors cannot garnish your Social Security benefits. For example, credit card companies, mortgage companies, or automobile loan companies cannot tap your Social Security benefits to satisfy a debt. Supplemental Security Income (SSI) benefits are likewise resistant to related garnishments. The Federal government, however, does indeed have license to garnish Social Security benefits to enforce payment of alimony or child support, to collect unpaid federal taxes, and other similar liabilities.

Social Security benefits are a resource for retired citizens, disabled individuals, and family survivors. These benefits, while resistant to legal action by creditors, are not entirely exempt from garnishment when the Federal government is involved.  Regardless of your income or those benefits you receive, care should always be used in managing your finances.

Take steps ahead of time to protect your credit rating and to protect your money and investments from the interference of the courts. Pay your bills on time; honor your financial obligations. Keep your fiscal plate clean, and do not let a garnish become something distasteful and unappealing.

Can I File Bankruptcy on Student Loans?

By | Debt, Personal Finance, Your Credit

A college education is recommended if not required these days. As we make our way through life, society instills in us a fear that we will be homeless and destitute if we do not go to college. Unfortunately for us, no one mentions the student loans that would someday swallow us whole.

Countless late nights, who knows how many unwelcome research papers, and the horrible tasting dorm food that we did not dare think too much about: these were all a part of the experience that hopefully allowed us to acquire a decent occupation.

Of course the college education was worth it.

Only when the mortgage payment, the car payment, the student loan payment and all other assorted bills are due at the same time – and then we get laid off –  do we reach our wit’s end. One option looms in the distance: Is it possible to file bankruptcy on student loans?

Filing bankruptcy on student loans is difficult but not impossible. When filing for bankruptcy, you must also file a petition claiming that repayment of your student loans would cause undue hardship. Once you have filed, your fate is in the court’s hands. They use a certain level of discretion, and each case is treated differently, which makes it hard to accurately predict an outcome. It is up to you to prove that repayment of your student loans would not only cause your wallet pain but distress to you as well.

Unfortunately, the courts are not always as forgiving as we would like them to be, and we may have to defer to another option. If you are denied a discharge of student loans based on hardship, you can also apply for Chapter 13 bankruptcy. This “reorganization” is the next best thing, allowing you to postpone your student loan payments and catch up on any other debts that you may have. The advantage of this is that the payments are court-determined, so there will be no evil collectors knocking at your door.

Be aware, however, that this is not a get-out-of-jail-free card. You will still owe the balance on your student loans, but Chapter 13 bankruptcy gives you precious time to get your affairs in order.

Bankruptcy should never be a first choice, particularly if you are petitioning to discharge your loans. Many courts will want to see that you have exhausted all other options first. Although bankruptcy can put a cap on your debts and keep creditors at bay, it is not an end to your problems. Bankruptcy stays on your credit for seven to ten years, and the stigma attached can make it difficult to obtain credit down the road when you need it. Before things are too out of control, consider exploring the tools and services available from Ovation that can help you manage your debt and protect your credit.

Take Charge of Your Spending: Stop Charging What You Spend

By | Credit Cards, Credit Repair, Debt, Personal Finance, Revolving Debt

Wages are stagnant and unemployment rates are hovering near all-time highs, while food and fuel prices continue to rise faster than ever. Managing money well enough to maintain your lifestyle – or even well enough to pay for necessities – is more challenging than ever. In a perfect world, we would have a three to six month stash of emergency money we could use to help bridge the gap.  In the real world, emergency funds are already depleted and few additional options exist.

In the real world, your credit card has become your emergency fund.

As you consider ways to modify your spending habits, you may find a few extra dollars each month to spare. The desire to establish or maintain an emergency fund clashes with the desire to pay down or pay off your credit card. With a cursory glance at interest rates, the choice to pay down the credit card takes priority over establishing or maintaining an emergency fund.

The use of a credit card demands that you pay the bank for the privilege of having access to the money on your balance. You’ll pay close to 15% interest, even if you have a good credit rating.  On the other hand, interest rates for savings accounts and CDs are minimal compared to the interest rate that you will pay for revolving credit.

When you consider how much extra you will pay a bank for access to their plastic emergency fund compared with how much a bank will pay you to give them access to your savings, the smart money is in paying down your credit card balance.

The money you save in credit card interest over time can be used to maintain an emergency fund on your own terms. Alternatively, you may choose to allocate a larger percentage of your disposable income to paying off your credit card balance, while allocating the smaller percentage to your savings (our tools can help).

As you structure your finances to improve your long-term security, consider other smart money decisions: While you pay down your credit card balance, track your credit card spending, utilizing text messaging and statement features to keep you informed and aware of where, when, and how often you are using your credit card. As well, examine your spending habits in general.

You may be in the habit of purchasing a latté on the way to work each morning. While the daily cost may seem trivial, calculating the weekly and monthly total for this daily indulgence essentially leaves you with an extra monthly bill.  Consider taking a thermos or travel mug with you to work. With that thought in mind, think about packing a lunch instead of ordering a take-out lunch or frequenting the local deli.  The savings will add up in your favor.

You cannot control how the market will respond to economic changes, but you can control your response to economic fluctuations. You cannot control rising prices and interest rates, but you can control your spending habits, and you can make smart choices with your money.

Pre-Approved Credit Card Not a Golden Ticket

By | Credit Cards, Credit Scores, Personal Finance, Revolving Debt

There is a part of us that really likes getting offered items of all kinds, especially things that are free. It could be something as inconsequential as a free sample from the local market, or it may go as far as winning the lottery. When someone is willingly handing you something, how can you possibly refuse? That’s just rude. Therefore, when a pre-approved credit card offer comes through the mail, our first thought is to seriously consider the proposal. The credit card companies ask so nicely, and the sample card they include even has our name on it.

Thinking it will be good to have a credit card for emergencies, you jump through all the hoops, fill out the paperwork and wait expectantly for your shiny, new pre-approved card to come through the mail. Unfortunately, many never receive the card for which they were supposedly pre-approved. It turns out that the credit card company was not as nice as we initially thought; many people get turned down after they apply.  Think of the credit card companies as deep sea fishers: they cast the net as wide as possible in order to pull in as many fish as they can.  You are a fish.

The offer, pre-approved or not, is just that. It’s an offer, not a promise. (There’s fine print that says so, but we often overlook that in the eagerness to take advantage of the great deal they’re offering to help us pay off high-interest debt, at the same time taking a 0% APR cash advance).  Credit card companies simply establish a bandwidth of possible customers and distribute offers based on limited criteria. However, once you apply, the same company takes a more in-depth look at your credit history to decide whether you truly fit the bill.

For those who are always a day or two late on payments, applying for more credit cards can seriously hurt your credit and make you a less desirable candidate for future financing. A high balance on a card can hurt as well, and although the balance does not have to be at zero, you should try to keep the balance at less than 50%. Maxing out the credit card every month does not bode well for your credit history. Another thing that can hurt your credit report is a history of repeated rejections. If you are not getting accepted for a pre-approved credit card after multiple tries, take the hint and refrain from damaging your credit further.

As much as we all want to believe that we are special enough for credit card companies to select us for their pre-approved card, we are nothing more than another address that met the preliminary marketing criteria. As depressing as a rejection from a credit card company is, it is a good reminder to take a look into our credit report and make sure all is well. If you are getting rejected, there is a reason for it, and it is wise to know the details of your history so you can make corrections as quickly as possible. Fixing any problems now can save you headaches in the future, and you can aspire to finally receive that pre-approved offer that has eluded you in the past.

Unraveling the Credit Rating Mystery

By | Credit Repair, Credit Reports, Credit Scores

Just thinking about your credit score can be daunting, and knowing how to manage it can be downright frightful! You might know that there are three credit reporting bureaus, and you may even know that you have a credit score that combines these three reports into one tidy number rating, but what can you DO about it?

The first thing to keep in mind is that you are allowed, by law, to obtain a free copy of your credit report from the three major reporting agencies every year. At minimum, you should review your credit report for discrepancies or to discover any accounts that you did not open. If you’ve recently picked up your free annual credit report and have started to look it over, you may feel like they left out the secret decoder ring!

Understanding what all of that credit lingo means can be difficult. What is the difference between revolving and installment accounts? How does your rating affects your present and future financial well-being? What do you do if there is a problem with your report? Worse yet, how do you handle it if you discover someone has stolen your identity?

They say that our greatest fear is that of the unknown, but you can make that fear a thing of the past by requesting a copy of your credit report and getting to know what the major credit agencies are reporting about you. Knowing how to understand and manage your credit report can help you keep your credit score in a place that gives you better purchasing power and lower interest rates on everything you finance.

If you are confused about the information contained in your credit report, we invite you to speak with our credit specialists, who can help you decipher your credit report and provide you with a no-charge consultation. What to expect from your consultation:

  • A thorough review of your credit reports.
  • Learn about negative accounts, such as items in collections.
  • Learn about positive accounts, like those in good standing.
  • A discussion about how it all ties together & what affects your score. Who has requested your score, public records, new vs. established credit accounts and much more are all in the mix.

Learn:

  • How long can negative items affect your rating?
  • How can you improve your credit standing moving forward?

We also offer a variety of tools that can help you manage your finances and keep your credit under control. Whether you’re trying to pay down debt quickly or figure out which credit card to pay off first, our tools can help you decide what will be the best approach.

You can schedule a consultation with one of our specialists by calling 866-639-3426. Take control of your credit today!

What’s Interesting about Down Payments?

By | Budgeting, Credit Repair, Home Buying, Personal Finance

One in every ten climbers dies trying to reach the top of Mount Everest. Even using every resource available to them, only 20% can reach the top. Getting into position for financial success or trying to improve your credit rating can feel like climbing a mountain, but it doesn’t have to. We can help you exercise wisdom while seeking creative ways to use your resources.

An improved or repaired credit rating means more options for you. How are you planning to spend your return? Approximately 84% of Americans are planning to invest their check from Uncle Sam this year in assets that add to their worth – cars and other major purchases.

Due to recent home market trends, more people are renting houses. A good credit score can put you in a position to buy a home – either for yourself or as a way to create extra income by renting it out to others. Great deals on homes can be found all across the country these days, and a healthy down payment can increase your monthly returns by making payments more manageable.

Using your tax return to purchase an automobile may be an option as well. Most car dealers salivate over the opportunities tax time presents, even offering to do your taxes right there at the showroom so that you can use the refund to make your down payment.

Using your tax refund to make down payments on large purchases provides you with two possible benefits: a lower and more manageable monthly payment, or the ability to buy more than you would have been able to afford otherwise.

A down payment will not, however, affect the interest rate you are able to get for the items you finance.

Your credit score is what determines the interest rate on the loans you obtain. That single number can have more to do with your overall purchasing power than any other number. The credit report will directly affect how much you will ultimately spend on interest. Can a down payment improve the amount that you pay in interest, too? Yes. While it will not lower your interest rate, it can significantly cut the total amount that you have to finance.

A down payment is basically discretionary funds used to pay on the principle of a loan up front. When coupled with a good credit score, it can put you in a position to make some seriously good choices for your life. If you’re credit is suffering or in need of repair, you’re often wise to wait on the purchase and use your tax refund to pay down your credit debt so that you can improve your score.

Start Saving for Christmas Now

By | Debt, Featured, Revolving Debt, Save Money

People may cringe at the idea of Christmas this early in the year, but in all reality it is the time to put a lock on that checkbook in preparation for the upcoming holiday season. In this economy, Christmas shopping often sneaks up, and being tied down with even more debt is sure to turn you into a first class Ebenezer Scrooge.

By September and October, many people are trying to clean up their debt, either to tie up loose ends by the end of the year or in preparation for the holidays. Whatever the motivation is, ridding yourself of debt is always a good idea. However, many people will open a credit card for Christmas – only to find themselves greeting the next year in an even bigger hole. Better cross your fingers that someone buys you a shovel!

There are several things that you can do to avoid debt during the holiday season. If there is a must-have item that you absolutely cannot pay for with cash, consider layaway. Many stores are reinstating the layaway policy due to the economy. Layaways allow you to make weekly or bi-weekly payments rather than paying the entire price upfront, without the hefty interest rates. Don’t treat layaway as a new form of credit card, though.

The “gotta have it right now” mentality is not a healthy one for the wallet, no matter how the payments are structured.

For those who prefer to save their money ahead of time, many banks have Christmas savings accounts, in which a small sum of money is drawn out of each paycheck and made unavailable until closer to the Christmas season. Savings accounts can work similarly, although you have to discipline yourself not to spend it and not rely on the bank to keep it out of your reach. You can even partition your direct deposit so that part of each check is deposited directly into savings.

Another easy way to save money around the holiday season is to buy gifts here and there throughout the year, rather than having to come up with a large sum of money at a single time. Christmas in July is the newest marketing effort most retailers are using, with many stores offering sales and discounts for those shopping early. Items that do not expire, such as gift cards, can be bought at any time and will hold until Christmas without a problem.

The holiday season does not have to be stressful. By purchasing gifts early, buying on layaway, and using a Christmas savings account, you can avoid high interest payments that bury you in debt throughout the next year.

Credit Card Act of 2009 Puts Consumers Back in the Driver’s Seat

By | Credit Cards, Credit Laws, MasterCard, Revolving Debt, Visa

Credit card companies have long been greasing the wheels of government with high priced lobbying, but in 2009 Congress struck a blow for the common man (and woman) – you know, the ones that actually voted for them. Few people know about the Credit Card Accountability Responsibility and Disclosure Act of 2009 and that’s exactly how the credit card companies would like to keep it, but this act puts the power back in the hands of the people and makes credit card companies accountable for their actions.

Follies of Youth

Most college students would likely contemplate selling a kidney if it meant a free pizza on Friday night. Money is tight and college cafeteria food is barely edible. It used to be that students going to sporting events or even walking around campus would be greeted by friendly credit card company reps who were passing out free stuff, from frisbees to t-shirts (letting laundry day wait one more day), just to get the students to fill out an application. It didn’t take long before thousands of college students had a lot of free shirts and a ton of credit card debt.

Credit card companies preyed on these groups because students were impulsive and an almost-sure money-maker. The credit card industry knew there were plenty of minimum payments and tons of interest to be collected from the free pizza generation. The Credit Card Accountability Responsibility and Disclosure Act of 2009 took away the credit card companies’ ability to market on campuses, much to the chagrin of dirty-shirted and hungry college students everywhere.  You can’t even get a credit card before you’re 21 anymore, unless you can prove you have income or have a co-signor. Credit card companies also can’t visit a sporting event or other venue to entice new customers without a valid reason for being there.

Interested in Interest

Credit card companies once had the ability to raise a person’s interest rates for almost any reason. Miss a few payments? Default on a previous credit card? Wear white shoes after Labor Day? Ok, so a fashion faux pas is a little exaggerated, but many people found their interest rates rising with little or no warning.  Your interest rate could jump by 18 points over night, and you were left holding the bag.

The Act has several provisions to protect the public from unreasonable interest rate increases. Companies now have to give 45 days notice before raising rates, so you can decide whether or not you want to keep the card. That 45 days is designed to give you time to pay off and close the card without incurring the new interest rate. It also keeps them from retroactively using the new rate on a balance in good standing.

We’ve all made credit mistakes, and credit card companies were taking advantage of that to increase rates if you were late on your payment by so much as a minute. The Act protects consumers by requiring a 45-day notice for increases in rate and, if you make six months of consecutive on-time payments, then your interest rate must be lowered back to the rate you had before the missed or late payments.

The main downfall of the Act is that it did not set a cap on interest rates. This means companies can still charge upwards of 30, 40 or even 50 percent interest if they want to.

Fees! We Don’t Need No Stinking Fees.

Credit card companies seem to have a fee for everything. There were late fees, over the limit fees and you-ate-too-much-chocolate-on-Thursday fees. The Credit Card Accountability Responsibility and Disclosure Act of 2009 gave credit card companies rules about when they are allowed to charge fees.  Before the Act, if you got your payment in too late at the post office or went one cent over your limit, they took the opportunity to rake you over the coals.

Now, credit card companies can only charge an over-limit fee for three consecutive billing cycles.  Also, payments made on the payment date before 5 p.m. cannot be charged a late payment fee.

Credit card companies are complying with the law, but they are counting on consumers not knowing about their rights. Grab the credit bull by the horns and turn your credit score around by exercising your ability to take control thanks to the Credit Card Accountability Responsibility and Disclosure Act of 2009.

Speed Up Your Credit Repair

By | Credit Repair, Credit Scores, Personal Finance, Your Credit

We all like immediate gratification, but quick fixes to credit repair are difficult to come by. The average amount of time required to repair credit and dispute information appearing on your credit report is six to eight months. But the year is still fairly new, and if all goes well, some of your financial resolutions still have the possibility of being met before the year is over. Although six to eight months may seem like an eternity,  there are things you can do to ensure that it’s closer to the six than the eight.

Filing a dispute with the credit bureaus is one of the most time-consuming credit repair options, but because correcting can error can make a real difference in your credit score, it is often worth the effort. The time required is due to the credit bureaus having to contact your creditors and do an investigation. Sometimes the result will be the credit bureaus trying to dismiss your claim out of hand, or require a great deal of information to proceed. It can take 45 to 60 days from the time that you send your initial letter of dispute to receiving a response – and the first response is often dismissive. Don’t give up, though – credit bureaus are required to investigate your claims.

Credit repair is important because it influences the interest rate you are able to obtain on everything you purchase. When buying a new car or home, it is your credit that determines the interest rate, not the down payment. Bad credit can exponentially increase the amount that you end up paying for major purchases. Credit repair is important regardless of your wage or status – bad credit scores are not limited to lower and middle class consumers but can strike anyone. While credit scores are often determined by your own choices – late payments, missed payments, or overextensions – many credit scores are lower than necessary because of errors on the report.  Repairing these inaccuracies can be crucial to your long-term purchasing power.

While Equifax and Experian both send your disputes on to the creditor in question, lengthening the response time, Transunion may help you speed up the credit repair process. Disputes filed with Transunion through Ovation Credit are sent directly to their system, and responses can take as little as 30 days.

While repairing your credit is one crucial component to maintaining a good credit score, paying on time, keeping your balance below 50% of the credit available, and using credit as a financial tool, not a crutch, are also important steps in achieving the kind of credit score that will let you improve your purchase power.

Don’t Wreck Your Credit with Trade Lines

By | Credit Repair, Credit Reports, Credit Scores, Personal Finance

“An innocent girl, a harmless drive, what could possibly go wrong?” That’s the tagline from the 80s film starring Corey Haim. In License to Drive, Haim’s character flunks his driver’s test but decides to sneak out with his grandfather’s Cadillac for a date with a beautiful girl. As if his one indiscretion tempts the roadways, the car is basically demolished by the end of the film.

If you have credit that’s riding on shaky ground, you may understand his impetus to defy the law, his parents, and grandfather, because when you’re desperate, it may be tempting to pull one over on the credit reporting agencies, granting yourself a license to charge. You can certainly relate if your credit is shot, whether from a job loss, huge medical bills, short sale, bankruptcy, foreclosure, ignoring inaccuracies on your credit report, or forgetting or forgoing your bill payments.

There are companies that will help you make it look like you have better credit, by unethically adding current and timely paid trade lines to your credit report. Trade lines are any account that is listed on your credit report, such as a mortgage, car loan, credit cards, or any account with a credit line attached to it. If you have a serious spending problem that will not improve with anything but time, faking financial worthiness can further dent your relationship with lenders. It is akin to assuming a false credit identity that demonstrates a real sense of fiscal responsibility, while your credit is still unstable.

It gets worse, because beyond being quite unethical, it is like watching a slow motion car wreck. The worst part is that just as grandpa could see his car was totaled, the reporting agencies can differentiate between your real trade lines, and “bought” trade lines, and they may not calculate these fallacies in your credit score. The credit agencies will not even tell you that they know; it will merely be reflected in your credit score. So, practice prudence rather than letting the emotionally exhausting tugs of poor credit steer you in the wrong direction.

Fraudsters use false trade lines to elevate credit report ratings and open new lines of credit, with the intention of charging up the credit without paying back the loans. Desperation to sit in the driver’s seat of a nice new car may drive you to do it, but you will get caught. And, while selling trade lines is not an offense, opening and not intending to pay any lines of credit may constitute fraud.

As tempting as it may be for you to buy trade lines, your time and money are better spent pursuing other avenues. Stay away from these firms. It is far better to rebuild your own credit by correcting any inaccuracies with the credit reporting agencies, as nearly 80% of credit reports have inaccuracies. In the meantime, work with lenders that specialize in helping customers whose credit is not perfect rebuild their reputation.

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