Cristy wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form . I’m happy to help you totally for free. Income from the GetOutOfDebt.org site advertising is used to help alleviate poverty . If you would like to help me to help others, there are easy and free things you can do, click here to learn how you can help . “Dear Steve, I’m so far behind that i have 3 payday loan, and im working full time, a part time job and going to school. How do I get a head where I don’t have to use payday loans? Cristy” Dear Cristy, Your payday loan question comes at a great time. Just this past week I had the opportunity to visit a couple of payday loan , payday advance, or cash advance stores and sit down with staff members and discuss these issues. Your problem of having multiple cash advance loans from the payday loan stores highlights a current problem when using a payday loan store. Only in a handful of states is it required that a payday loan store or cash advance store make sure that you don’t have multiple loans outstanding. The new policy in those states is “one loan, one customer” but today, in the majority of states you could go from store to store and roll up a bunch of loans. The store typically will not ask if you already have loans outstanding and it will become your sole responsibility to make sure that you don’t borrow more than you can afford. People are often not the best watchdogs of their finances, especially in urgent situations or difficult times. The minute that you take out a second or multiple cash advances by writing a postdated check in order to have cash in hand right now, that’s a warning sign. Borrowing more when you can’t repay what you’ve already borrowed is a lethal blow to your financial health. The Community Financial Services Association of America (CFSA) is a payday advance industry group and payday advance companies that are members of the CFSA may offer you an EPP (Extended Payment Plan) to allow you to repay what you owe over four payments without additional interest. Each member will provide customers who are unable to repay a payday advance according to their original contract the option of repaying the advance over a longer period of time. Such an extended payment plan will be offered in compliance with any requirement in state law to provide an extended payment plan or, in the absence of such a requirement in state law, in compliance with the Best Practice “Guidelines for Extended Payment Plans.” A member will adequately disclose the availability of the Extended Payment Plan to its customers in compliance with any requirement in state law for such a disclosure or, in the absence of such a requirement in state law, in compliance with the Best Practice “Guidelines for Extended Payment Plans.” Each member shall provide an Extended Payment Plan (“EPP”) for customers who are unable to repay a payday advance. Each member will offer such an Extended Payment Plan in compliance with any requirement in state law. If no such requirement exists in state law, then the member shall adopt a plan that offers the customer at least the following provisions: If you [the customer] are unable to repay your advance when due, you may opt in to an EPP to pay the outstanding advance at least once in any twelve month period. Any outstanding fee will be included in the amount subject to EPP. You must invoke the EPP by close of business on the last business day before the advance due date by returning to the office where you obtained the advance or by using whatever method you used to obtain the advance. To invoke the EPP, you must sign an amendment to your agreement reflecting the new payment schedule. You may pay the transaction balance in four equal payments coinciding with your periodic pay dates. We will not begin collection activities while you are under an EPP as long as you meet all obligations under the EPP. There is no charge for you to enter into an EPP. However, if you default on an EPP, we may charge you an EPP fee and accelerate payment on the balance remaining, as authorized by applicable law. If a state has adopted a requirement for a repayment plan in state law, members shall comply with those requirements. The CFSA Best Practices Extended Payment Plan may not be available to customers in states with statutory payment plan requirements. I have previously written about how a payday advance or payday loan could be used in limited situations and makes sense. However, the minute we start talking about rolling over payday loans or having multiple cash advances outstanding, well then we’ve got a whole different kettle of fish. The only way to dig yourself out of the payday loan hole is going to be to get the loans paid off in full, to see if the stores you got the loans from will allow you to enter an EPP to pay them off, or go bankrupt. Ultimately the secret to getting ahead to not have to use payday loans is to make sure that your expenses do not exceed your income. Anytime that happens then you are going to have problems. What I’d rather see you do is to stash away any extra cash you might get into a savings account . That way, in leaner times, you can reach into your savings account and borrow cash from yourself to make ends meet. Big hug. Steve Photo: Steve Rhode Source: Cristy Has Three Payday Loans And Can’t Pay Them Other Related Articles to Read Teresa Wants Quick Cash to Not Become Homeless Jenni Can’t Make the Car Payment and is Behind on Rent and the Clutch Just Went The Good Side of Check Cashing and Payday Loans Payday Loans and Cash Advances Teresa Writes In And Asks “What Should I Do Next?”

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Teresa wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form . I’m happy to help you totally for free. Income from the GetOutOfDebt.org site advertising is used to help alleviate poverty . If you would like to help me to help others, there are easy and free things you can do, click here to learn how you can help . “Dear Steve, In debt to cash advance companies and am short $350 for the months bills Is there any help with cash advance loans and how can I get cash quick to not become homeless? Teresa” Dear Teresa, The easiest way to not become indebted to cash advance companies is to not take out cash advances. A cash advance from a payday loan outfit or even a cash advance from your credit cards is a costly way to borrow but it might make sense if you have a short term need that can be fully repaid with your next paycheck and not put your further behind. In fact a payday loan in this situation can be much much cheaper than a cash advance from a credit card since the credit card will charge you a huge interest rate and not apply any of your payments toward that cash advance until you pay off the rest of any balance you might have. You have three real options: Ask a friend or family member to bail you out. Or ask your church you belong to if they can help. Negotiate better repayment terms with the cash advance store and see if they can work with you to develop a mutually agreeable way to repay the debt. Bankruptcy might be an option, depending on your total financial situation, click here for bankruptcy information . Big hug. Steve Source: Teresa Wants Quick Cash to Not Become Homeless Other Related Articles to Read Jenni Can’t Make the Car Payment and is Behind on Rent and the Clutch Just Went The Good Side of Check Cashing and Payday Loans Payday Loans and Cash Advances Samantha Says “My Husband And I Are Young And Don’t Want to File Bankruptcy. What Do We Do?” Teresa Writes In And Asks “What Should I Do Next?”

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A little birdie in the wind told me that Consumer Reports is working on an article that involves debt settlement services. This person said they got the impression that the article was going to not be supportive of debt settlement companies, and in many ways, that’s a shame. Settling your debts for less that you owe can be problematic but those problems do not invalidate the effectiveness of debt settlement when used at the right times to get out of debt. Well meaning consumer advocates seem to do little more than continue to tear down solutions for consumers to use to deal with debt. They limit the scope of credit counseling , block or ban payday loans in some states, want to heavily regulate debt settlement firms, etc. While all this deconstruction of consumer options and tools is taking place, there is no consumer advocacy agency that is fighting for new or better options for consumers to use to get out of debt. If a solution like the current debt settlement approach needs to be overhauled, replace it with something better, not something less. I consider myself to be a consumer advocate. I fight for the individual in debt by speaking the truth and giving honest advice. There has been absolutely no movement on the consumer advocacy agency side to fight for fairer solutions for consumers in financial trouble. And there are options. When pressed, some of the advocates have told me that the reason they do not fight for new debt elimination tools is because that is not their job. Their job they tell me is to protect consumers from things they don’t like. But that’s like tearing down a damn and flooding the town because you didn’t like the damn. Don’t tear down the damn, build a better one first, and then tear down the old damn. That would be the responsible thing to do. The current solutions of credit counseling and debt settlement are broken and could be better but outside of bankruptcy , that’s all consumers have to try to deal with their situation. So I can only hope that if Consumer Reports does come out with this article about debt settlement and they do have negative things to say about it, that they also at least try to advocate better solutions other than simply leaving bankruptcy as the only viable legal option left. Source: Consumer Reports Debt Settlement Article to Come Other Related Articles to Read April Wants To Know “As A Single Mom, How Do I Get Out Of Debt?” Terrance Says His Debt Problems Are Worse Than Anyone He Knows Is Consolidating Debt the Way to Go? - American Chronicle I’m Afraid I’m Going To Get Laid Off. How Will I Pay My Bills? What Will I Do? How to Avoid Filling for Bankruptcy - WLNS

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Crystal wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form . I’m happy to help you totally for free. Income from the GetOutOfDebt.org site advertising is used to help alleviate poverty . If you would like to help me to help others, there are easy and free things you can do, click here to learn how you can help . “Dear Steve, Hello…my situation is that I filed bankruptcy earlier this year. At that time, I didn’t include (2) payday loans which I was under the impression were not considered under Chapter 7. These loans are out of Delaware. I thought I could control them afterward the filing. Since the filing, I was laid off my job, had to move home, had car issues, needed surgery, etc. Fortunately, I started working again about 1 1/2 months ago. To “catch up”, I preceeded to obtain (3) other payday loans and again, thought I could control them. The previous (2) are not in collections and I’m now paying them bi-weekly. These payday loans are like a tsunami and the (2) weeks come around way too often. Other than these, I’d really be on track. I’m really coming apart at the seams and the fees are out of control. Will a debt consolidation plan be the way or a “payday loan consolidation” be the best way? Will either plan be acceptable even with a Chapter 7 history? Thank you. Crystal” Dear Crystal, I asked a beloved friend of mine, who is a bankruptcy lawyer for some feedback about your situation as well. You will see that have a slightly different views on the issue but that’s what I love about collaboration, it brings out the best in people. I’ll post the lawyer feedback below, but first, I do have something to say about payday loans . A payday loan is a short term loan where you pay a fee to get cash in hand now but must repay that money within a short period of time. In certain situations, they can be a benefit. For example, the car breaks down and needs repairs, you need the car to get to work to earn money and you’ll be able to afford to pay for the repair with your next check, in that case a payday loan might be a perfectly good option. A payday loan is a financial tool, just like a credit card , overdraft or a bank loan. It is not the tool itself that is inherently bad, it is how it is used and abused. The minute you start taking out new payday loans to cover you when you could not pay back the old ones, is nothing but really bad news. The minute you start doing that, enormously loud warning sirens need to go off in your head. Readers might say that the multiple payday loans are the sign of an irresponsible lender, and if they are from the same payday lender then I would agree. But in my years of experience I have seen many people get one payday loan here and one there, shooting themselves in the foot without disclosing the previous payday loans to the new lenders. And some people will feel very critical about the existence of payday lenders at all but there is a large segment of the population that still relies on check cashing and payday lenders for financial services. Many people don’t have bank accounts, can’t get credit from Main Street lenders for emergency situations or distrust banks. in fact, Kinecta Federal Credit Union in California recently purchased the largest check cashing and payday lender chain in the state to be better able to reach that part of the population that relies on these service providers. See “ The Good Side of Check Cashing and Payday Loans “) Crystal, I’ll let my lawyer friends words give you some specific direction about what you can do now and what you should have done when you filed bankruptcy . Let’s let others learn from this painful situation so they don’t have to repeat the same issues. Dear Crystal: Before getting to some solutions to your payday loan debts, you should know that payday loans are the most addictive and costly way to borrow money. When you get out of these debts, as explained below, never go to a payday lender again! If you have an emergency need for cash, you are far better off to join and go to a local credit union for a small short-term loan, or even to pawn some property rather than to get a payday loan. The amounts borrowed seem small, but the costs are truly “loan shark” rates– well over 300% interest per year. The payday lenders get around this by saying it’s only meant to be a short term loan, but as you’ve found out, it’s much easier to roll the loan over than pay it off and you end up paying $100 to borrow $100. Below are some solutions to your problems. As soon as you can, please try to start a savings account and “emergency fund” of your own money to fall back on instead of needing an outside source. If you can save even $5 a week, it will build up and then you can be your own lender! There are at least three pieces to the situation you have described. 1. When you file a bankruptcy, you’re supposed to list all of your debts, regardless of whether or not you think they will be affected by the bankruptcy. But you’re in luck, because your personal liability on the loans you owed before the date your bankruptcy was filed was most likely discharged (forgiven) by your bankruptcy. The problem is that these two lenders don’t know that you filed the bankruptcy because they were not listed and did not get notice. This is what bankruptcy lawyers call “the omitted creditor problem.” This can be hard to explain to the lenders since it’s the result of interplay between section 523(a)(3) of the Bankruptcy Code and the Bankruptcy rules and procedures governing “no asset” chapter 7 cases and the filing of claims. Most chapter 7 cases are “no asset,” meaning that you were able to protect or “exempt” all of you property when you filed and there was nothing for your Chapter 7 Trustee to sell for the benefit of your creditors. If your case was a no asset case, then contact the two lenders you owed but did not list, give them proof of your filing and have them agree that their debts are discharged. If you cannot convince them of this, you’ll have to contact your bankruptcy lawyer’s office to get an official explanation letter sent. 2. The payday loans you got after the date you filed your bankruptcy case are not affected by your bankruptcy, but you still may have relief. First, many payday loans made on the Internet are not legal or enforceable under the laws of your state. There are two ways that can happen: The first is that your state may have specific laws against payday lending. The second is that your payday lenders may have failed to comply with other state laws governing creditors. For instance, companies seeking to collect a debt in state A may be required to register with state A’s Department of Insurance or other office. Your bankruptcy lawyer’s office or the state Attorney General’s consumer protection division can help you find out what applies in your state. The state offices are listed at: www.consumeraction.gov/state.shtml 3. There’s plenty you can and should do to protect yourself right now. The payday lenders either hold one of your checks or have been given access to your bank account. As soon as possible, close any bank accounts for which you’ve given out information. You can open a new account at the same bank or credit union and you should explain what’s going on to your financial institution. If the debts are legal and valid, then you can ask them to waive the interest going forward and allow you to pay off the debt on your own. Be sure to get everything in writing, including how they will report the debt on your credit reports. And remember that you have rights under federal law not to be harassed. Hang in there and fight! You can do it! Well Crystal, that’s an awful long answer for you but I hope you can see that you do have some options. I agree, you should go back and talk to your bankruptcy lawyer and ask for help in addressing those original two payday loans that you didn’t include. While payday lenders are tougher to work with, they may agree to accept payments through a debt management plan to help repay those debts that you took on after your bankruptcy . Since you recently filed Chapter 7 bankruptcy , that’s not available to you again for a number of years. The credit counseling group isn’t going to care that you went bankrupt because they are not going to give you a debt consolidation loan, but instead, a possible way out of your debt you are in now with an orderly monthly repayment program. Big hug, from both of us. Steve Photo: Steve Rhode Source: Crystal Went Bankrupt But Did Not Include All Her Debts. She Left Out Two Payday Loans. Oh Crystal. Other Related Articles to Read Jenni Can’t Make the Car Payment and is Behind on Rent and the Clutch Just Went Jason Has Not Paid His Mortgage in 10 Months And Wants to Keep His House BB Owes American Express $40,000, She Can’t Pay It, Bill Collectors Are Starting to Call Diana Is Struggling to Make Credit Card Payments And Afraid The Good Side of Check Cashing and Payday Loans

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Carolyn wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form . I’m happy to help you totally for free. Income from the GetOutOfDebt.org site advertising is used to help alleviate poverty . If you would like to help me to help others, there are easy and free things you can do, click here to learn how you can help . “Dear Steve, I built a new home using credit card cash advances. I now have $85,000 in credit card debt and the interest rates average 25%. I can make up to $2500/month in credit payments but the interest rates are killing me. I had great credit before this issue. I have a good job and predictable income. What is the best solution for me to get these credit card interest rates below 10%? I don’t want to hurt my credit long term. Carolyn” Dear Carolyn, I think it is far too late to worry about hurting your credit. With rates like 25% it leads me to believe that you are already showing signs of being a credit risk. What in the world were you doing building a home using cash advances from credit cards . That is a horrible way to finance a home. That is what mortgages are for. First off, I never recommend that anyone get a cash advance as long as they carry any balance on a credit card . When you do have a balance and take a cash advance the interest rate on the cash advance will be much higher but the creditor won’t apply your payments towards the cash advance until you pay off the entire purchase balance first. Carolyn, the only way to lower these rates is going to be to get a mortgage . Even if you found a balance transfer deal for $85,000, which I seriously doubt, the 3% transaction fee to do that would be huge. Contact a local mortgage broker or Big hug. Steve Source: Carolyn Built Her New Home Using Credit Card Cash Advances Other Related Articles to Read Archeologists Finds 3,000-Year Old Credit Card Bill Easy Come, Easy Go: Prosper.com Hits Regulatory Hurdle American Express Customers: Don’t Try This At Home Jeff Asks About Trick To Boast Credit Score. “Will It Work?” Payday Loans and Cash Advances

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Jenni wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form . I’m happy to help you totally for free. Income from the GetOutOfDebt.org site advertising is used to help alleviate poverty . If you would like to help me to help others, there are easy and free things you can do, click here to learn how you can help . “Dear Steve, I am behind on my car payment. I can’t pay my rent this month. The clutch just went out on my car. I work two jobs but I can’t get to them now that my car is broken. I joined the Army but I don’t leave until January. How can I get my bills payed? How can I get out of this mess? Jenni” Dear Jenni, First, let me thank you for your commitment to entering the armed forces. No matter what role you will be playing, the courage, dedication, sacrifice and commitment are to be applauded. Your situation is a very difficult and a tough spot to be in with few good answers, but here are some suggestions. The initial fall back position is to turn to family and friends for help. They are typically the most understanding unofficial lenders to turn to in time of crisis. Next, this is when having good credit and access to a credit card is helpful. This is the actual emergency that everyone always talks about needing a credit card for. Using a credit card at a time like this allows you to use the money of other people to make ends meet. But that money has to be paid back. If you don’t have a credit card you can use and you can pay the money you need back the next time you get paid, then I would suggest a payday loan . The fees for payday loans are high but so is the cost of not being able to fix the car and get to work to get a check. Payday loans are typically used by people that are unbanked, don’t have easy access to credit cards , or need a short term loan in an emergency. You can click on this link for more payday loan information . I am not a big fan of expensive borrowing but then, I’m not a huge fan of getting evicted or not being able to get to jobs you already have, to pay the bills. Finally, if you are the member of a church or religious organization, you can always turn to them for help in your time of need. Depending on their financial circumstances, they may be able to lend a hand. Big hug. Steve Source: Jenni Can’t Make the Car Payment and is Behind on Rent and the Clutch Just Went Other Related Articles to Read Teresa Writes In And Asks “What Should I Do Next?” The Good Side of Check Cashing and Payday Loans Kayte Has Drained Her Savings And Can’t Pay The Bills Anymore Payday Loans and Cash Advances Steve Writes In “I Want to Cash Out My 401(k) And Pay Off Debt.”

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I’ve got to be honest with you. While the righteous scream out about check cashing and payday loan stores, I’m not sure I understand all the fuss. Sure I get the fact about fees and I will admit that I’ve seem some sleazy payday loan stores and outfits. But you know what, I’ve seen my fair share of sleazy banks and credit card companies as well. Being a big name bank does not make it less egregious to charge someone $35 for overdrawing their account by $1. Don’t even get me started about the unit driven treatment of individual people by large Main Street banks. $3 to use a teller, please! Banks do a good job of doing what banks do but they don’t offer all a user friendly or customer friendly service that people want and need. Check cashing stores like Mix check-cashing in Los Angles, do serve a particular market segment. Nix Check Cashing Lobby Nix and other similar check cashing businesses offer their customers something that most banks don’t personal attention, clear fees and choice. Rather than be sneaky about changing interest rates, terms and magical fees; customers that use places like Nix Check Cashing know exactly how much services are going to cost. They are good and loyal customers that come back time and time again because they are treated well and the check cashing store does not force their financial products on the customer like a bank does. Sure, a payday loan can be expensive, but so can overdrawing your bank account and going into overdraft, paying to get your utilities reconnected for a late payment or paying a steep fee and ruining your credit by making a credit card payment one hour late. He told Lagomarsino why. A bounced check, a fee to reconnect a utility, a late-payment fee on your credit card, or an underground loan, any of those things can cost more than a payday loan. And then there are overdraft charges. “Banks, credit unions, we’ve been doing payday loans, we just call it something different,” Lagomarsino says. “When it starts to get used like a payday loan, it’s worse.” I think we need to get off our moral horse and look at check cashing stores in a different way. These much maligned outfits are offering a service that meets the customers needs and charges a premium for risk and convenience. If I go to a cheap neighborhood restaurant and order a steak, does that mean that I’m getting ripped off when I pay ten times the amount for a steak at an upscale restaurant? Or is that my choice? It seems to me that the issue isn’t that payday loan stores and check cashing outfits exist. The real issue is that these companies fill a need that is not being met or unable to be met by any other business. It might be that Nix Check Cashing might be making changes in that old paradigm. Kinecta Federal Credit Union is purchasing the Nix Check Cashing business and will continue the services it offers and introduce it’s credit union services to the check cashing customers. Then Kinecta Federal Credit Union called with its offer. “We were trying to understand why check cashers have been successful in underserved areas where banks haven’t,” Kinecta’s president and C.E.O., Simone Lagomarsino, told me. What they concluded was that most banks simply didn’t know low-income neighborhoods or understand them. “We go in with this cookie-cutter approach: This is our branch, this is our way we do business,” she says. And that is an excellent point, why is it that banks chastise payday loan outfits on one hand but then don’t serve or offer services to the market segment that the payday loan stores serve? You also have to ask yourself how much difference is there between a payday loan outfit that charges $22.50 for someone to borrow $150 for two weeks and a gaggle of banks that flood a nearly anonymous person with five empty credit cards with 30% penalty rates. If you would like to read more about Nix Check Cashing and the check cashing business in Los Angles, I strongly suggest that you read the recent New York Times Magazine article that I quoted from, “ Check Cashers, Redeemed .” Source: The Good Side of Check Cashing and Payday Loans Other Related Articles to Read Payday Loans and Cash Advances Teresa Writes In And Asks “What Should I Do Next?” Diana Is Struggling to Make Credit Card Payments And Afraid Terrance Says His Debt Problems Are Worse Than Anyone He Knows Bob Was Injured And Is Now Behind On His Credit Cards

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Terrance wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form . I’m happy to help you totally for free. Income from the GetOutOfDebt.org site advertising is used to help alleviate poverty . If you would like to help me to help others, there are easy and free things you can do, click here to learn how you can help . “Dear Steve, First off I’m 20 years old and have debt problems worse than anyone I know. But besides that I have payday loans, banking accounts, cell phone, and one credit card. Some happened before I was even 18. But I talked to a friend of mine who said she repaired her credit herself by just writing letter and calling the companies and creditors that had her account and made offers and stuff. She also used the 7 year rule of having some of them remove. She said the only amount paid that was high was like $200.00. And also she in this program where they help you buy a house and rebuild your credit, they put like 4 thousand dollars down to the 2 thousand she put down. I just need help with getting my credit straight without bankruptcy. Please just give me some kind of advice Terrance” Dear Terrance, Thank you for writing to me for help. I know your money troubles feel like they are the worst, but you are not suffering alone. The most common question I am asked is if this is the worst case I’ve ever seen. And it does not take a high level of debt for it to make you feel bad. A relatively little amount of debt can make you feel hopeless and like you’ll never be able to get out of debt ever again. Any contract that you entered into before you were eighteen is potentially voidable since you were not of legal age to enter a contract. For those agreements I would suggest that you contact a local attorney for advice and assistance in approaching those creditors. Your combination of debt is what is troubling me. You’ve got the usual cast of high interest players in this mix. The payday loan , cell phone, bank accounts and credit card company can go after you hard to get their money back. From what you’ve said it sounds like your friend made offers to repay less than the total amount owed in order to show the account had been paid off. If these arrangements had been made with a collection agency, it is probable that these debts will resurface again. Collection companies are hired to collect money but can not contractually obligate their client, the original creditor. If you want to settle a debt for less than you owe, be sure to get the agreement in writing from the original creditor. If they don’t want to put it in writing then that should be a warning flag that it might not be a real promise on their part. What they may do is take your payment and then latter say that they never had an agreement with you and demand the rest of the money. I’ve seen it happen many times. If they do agree to put it in writing, be sure to keep that letter and proof that you made the payment in a safe place. You may need that evidence to show the creditor and credit bureaus that the account is now paid off. The seven year rule is a bit of a misleading trick. After seven years an old delinquent account will be removed from your credit report but that does not mean the debt has gone away or is no longer collectible. Waiting for a debt to be removed from the credit report and thinking that it has closed the door on that old debt, would be a mistake. The most effective way to put an old debt to rest is to pay it off or go bankrupt. Bankruptcy will legally eliminate debts for good and for all time. A debt discharged in bankruptcy is no longer collectible. The home purchase program your friend is in sounds very suspect. Unless this is a program run by a local government agency I would not trust anyone with what you’ve said. Anyone that is promising you to rebuild your credit and then makes you pay $2,000, even towards a house, makes bells and whistles go off in my head. I’d love to know more about that program and who is offering that. There is no way I would suggest that you participate in anything like that without giving me specific information so I can investigate it. You are just starting your financial life. You are still young and at your age, bankruptcy would not be the worst case scenario. If you did go bankrupt I would hope that you would learn from your financial mistakes and use that first-hand experience to be a better steward of your finances moving forward and for the rest of your life. Big hug. Steve Source: Terrance Says His Debt Problems Are Worse Than Anyone He Knows Other Related Articles to Read Debt is number-one problem for people in Wales Slowdown nails contractors: Dozens of Idaho small business owners The relative worth of one’s work Ed Is Scared But Courageous In The Face Of His Debt Teresa Writes In And Asks “What Should I Do Next?”

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This weeks personal finance brain trust question was: What goes through your mind when people say that they HAD to use their credit card to get by? Is using a credit card when you can’t afford to pay a smart or necessary thing to do? WC - A 27-year-old writer living in Chicago and writing about personal finance through The Writer’s Coin . I think that people should take that as a warning. I realize for some people it’s the only option, but anyone that catches themselves saying that should really reprioritize to make sure that it doesn’t happen again and that they’re not making things worse by paying with a credit card. Whether it’s “smart” or not depends on how big of a hole they’re digging and what the alternatives are. If they could cut their spending somewhere, then it’s a bad call. Credit cards have the potential to help but also the potential to make things worse, and not realizing that is a huge mistake. For the people out there who have no choice and have nowhere else to turn—credit cards are a serious warning. If you can’t get by without them you are in deep trouble and something needs to change ASAP. Patrick Bryan - Living in Northern Ireland, Patrick helps people in a very different environment and economy but yet, mush is universal and much is the same. Visit Patrick’s Northern Ireland blog on debt . To pay your essential bills on your credit card is clearly a danger sign, however I can’t condemn people for doing it, and I can understand why it feels like the only alternative at the time. Many people also have temporary cashflow issues, and using credit cards helps them get by until (for example) their bonus is paid, or a big contract comes in. It is a great way of getting fast, accessible credit for short periods of time. I use my credit card for most of my purchases (including groceries and fuel) and enjoy 56 days interest free borrowings, why shouldn’t I use the credit cards money for free in that way? I always make sure however to pay the bill each month and use this discipline to keep control of any of the wilder spending urges I experience. My advice to people who are finding that they have to use credit to get by is to first look at their budget – identify what is happening and take action. If it is going on non-essentials and you are not clearing the bill each month, stop buying them! If you still have a shortfall each month you need to ask yourself some tougher questions - can you downsize the car, shop at cheaper stores, cut back on the family vacation next year? Ask yourself this question – “if credit cards hadn’t been invented, how would I have managed to pay the bills this month, and what would I be doing differently in relation to my spending?”. It is a very dangerous activity to use a credit card to get by at present as providers are starting to identify people using their cards to shop for essentials and are reducing limits and in some cases withdrawing cards if they think the customer is getting badly out of shape. They are also actively cutting credit limits and withdrawing unused cards. Leaving aside the rights and wrongs of putting essentials on credit cards my advice is to try and wean yourself off the habit, even making some life-changing decisions if necessary to try and live within your means. In the coming recession I strongly recommend curtailing your borrowing wherever possible and try not to rely on credit to buy anything you can’t repay when the bill comes in. Patrick - Patrick writes two excellent blogs, Cash Money Life and the Military Finance Network . I think a lot of it depends on the situation. When many people are just starting out in life, they may not have an emergency fund in place or have a lot of savings. In this case, credit cards can be used as a last resort for emergencies. They are much better than using payday loans to make ends meet. The important thing is that people only use credit cards to get by for true emergencies - food (not fast food or restaurants), car repairs, plane tickets for a family emergency, etc. The problem comes when people think they NEED to use credit cards to get by and end up using them for expensive clothes, jewelry, or other luxury items. Steve Rhode - A personal finance blogger and founder of the Myvesta Foundation, a global social enterprise that helps people find solutions for money troubles. You can ask Steve your debt related question through GetOutOfDebt.org and he’ll help you for free. Ouch! Not much good happens from using credit and creating debt when there is no reasonable expectation that you will be able to repay it. It only leads to bigger problems down the road unless you win the lottery or find a windfall of money to pay off the debt. It might not be a smart thing to do but I can certainly understand how some might find it a necessary thing to do. I remember right after hurricane Katrina hit New Orleans and slaughtered that area. People were without homes, without food, without jobs and without hope. People used their credit cards to buy diapers, pay for a hotel room or pay for food. And being in that same situation, with a hungry child looking up at me, I can’t say that I would not do the same thing in that situation. That does not make it right but maybe desperate times call for desperate actions. Abusing a credit card may be necessary but there will be consequences to pay latter. Those consequences could include bill collectors, bad credit report, a bad credit score, threats of lawsuits, being sued, wage garnishments, etc. When someone tells me that they had to use their credit card to continue to get by when not faced with an unusual life emergency, well then that’s a clear sign that we need to come face-to-face with the reality of the situation and deal with it. Using a credit card to make ends meet at the end of the month, month-after-month, or using once credit card to pay another is critically dangerous to your financial health. What will happen soon enough is that the denial about the financial situation will soon get stuck on the tracks and be broadsided by the powerful and fast moving freight train of reality. That’s painful. You need to take action and get off the tracks before that happens. J. Money - You’ll enjoy the blog Budgets Are Sexy for a look inside the life of one blogger and how money impacts it. I think “Wow, they must have REALLY been in a sucky situation!” I’m more of a positive thinker, so I tend to give people the benefit of the doubt from the get-go. I bet most of the time the people confuse NEEDS with WANTS, but that usually pops in my mind later if i’m giving it more thought. There is nothing with with putting NEEDS on your credit card to get by - this is life, and it’s not always perfect. If you need food or shelter, and have absolutely no money in the bank, then you’re pretty much out of luck. It also depends on the timeframe we’re talking about here. If we’re talking about a few years here, then obviously there are some other ways to get your hands on money - loans, friends, etc. But i see no problem w/ loading up the card for a few months and then working to pay it off as quick as possible. I personally put everything I personally can on a credit card to manage my budget. It gives me 30 free days, ya know? I pay it off in full each month, but worst case scenario you rack up a little interest when needed. That’s what it all comes down to really - the needs vs wants. Dawn - Iowa Hippie Chick blogs about money love and marriage and offers so very insightful posts on personal finance that involve emotional insight and awareness. Visit her blog . What goes through my mind Is they don’t have a grip on their personal finances. They probably don’t have a spending plan/budget. They definitely don’t have an emergency fund. And they just aren’t getting real with themselves, about their own money! I don’t think it is a smart thing to do, at all. It just dig’s their debt hole deeper, compounding their problems. Solution = Emergency Fund! Marcus - The creator of the CreditMattersBlog, this blogger has a deadly sharp point of view when it comes to consumer debt issues. Visit his blog . It is what it is. Some people are deeply into debt. I suspect that some people use their cards as a last resort. When someone tells me that they HAD to use the card, I ask how that actually transpired. Did they always use cards to supplement their income? Did they start using the card recklessly and then end up in a hole? For the most part, most people don’t have to use their cards to get by — at least not initially. It’s only after they’ve started loading up on debt, and can’t keep up, that they usually have to turn to credit cards to make ends meet. Your second question is much easier to answer. If you can’t afford to pay your credit card bills in full each month, you should stay away from cards. You’ll eventually get buried if you can’t pay your card in full each month. Most of the people I’ve run into — who ran into trouble with cards — typically carried balances from month to month. Carrying balances, especially ones that continue to rise, is also not good for your FICO score. Higher utilization translates into lower scores. I’ve written extensively about the virtues of paying in full. Using a credit card, when you can’t afford to pay the balance off each month, is not smart. Source: So You Have to Use Your Credit Card In An Emergency - Personal Finnance Bloggers Question of The Week Other Related Articles to Read What to Do if Your Creditors And Bill Collectors Make You Really Angry Expect Tidal Wave Of Limit Reductions and Credit Card Closures to Hit Before Christmas Business Noticing Increase in Credit Card Purchases. Not a Good Sign. Debt is number-one problem for people in Wales Groups seek credit card debt forgiveness

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An Israeli archeologist has discovered what he says is the earliest-known Hebrew text, found on a shard of pottery that dates to the time of King David from the Old Testament, about 3,000 years ago. Carbon dating of the ostracon (meaning “statement”), along with pottery analysis, dates the inscription to time of King David, about a millennium earlier than the famous Dead Sea Scrolls, the university said. The shard contains five lines of text divided by black lines and measures 15 by 15 centimeters, or about 6 inches square. Archeologists have yet to decipher all the text, but initial interpretation indicates it formed part of a letter and contains the roots of the words “default rate,” “cash advance,” and “ balance transfer ,” according to the university. That may indicate it was a legal text, which archaeologists say would provide insights into law, society, beliefs, and the earliest form of junk mail and promotional offers. More information about the real find is here. (I couldn’t resist.) Other Related Articles to Read Easy Come, Easy Go: Prosper.com Hits Regulatory Hurdle American Express Customers: Don’t Try This At Home Which Presidential Candidate Is Better For Debtors? Personal Finnance Bloggers Question of The Week. Payday Loans and Cash Advances Tony Writes In “I Have Too Much Debt On My Credit Cards”

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With so many ads on TV and the Internet proclaiming debt consolidation as the answer to financial difficulties, it´s no wonder many people assume it must be the ideal debt solution. The reality, however, is that many misconceptions surround the seemingly simple notion of consolidating credit card debt. In fact, consolidation will not necessarily reduce or even secure a fixed interest rate, and may not expedite your debt relief at all. Services proposing to consolidate your debt will recommend the following: place several of your debts into the same account, so that you only have to make one single payment each month. What debt consolidators don´t tell you is that this process may not only make no impact on your total debt amount, but it could also prolong the term of your loan. Is Consolidating Debt the Way to Go? American Chronicle, CA - 21 minutes ago … the debtor to discharge their debts by filing for payday loans in recent years, offering some contrast to the get-out-of-debt ads we´re bombarded with. … Click Here for totally free debt help, advice and answers . Read the rest here: Is Consolidating Debt the Way to Go? - American Chronicle Other Related Articles to Read Bad Credit Debt Consolidation - Brutally Honest Advice The art of getting out of debt - guardian.co.uk How You Can Get Out of Debt Fast Without Filing Bankruptcy American Express Customers: Don’t Try This At Home Consumers Feel the Next Crisis: It’s Credit Cards

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Now that banks have stopped their rampant lending to consumers what should we expect next? Well let’s not be surprised if we see an increase in payday loan or title loan activity. A payday loan is an unsecured, short-term cash advance until your payday. Payday loans are typically hyped with payday lenders saying things like: Personal Cash Advance is the fastest way to obtain secure, online cash advance and payday loans. Signing up and qualifying for a payday loan is quick and easy, and in many cases there are no documents to fax depending on the lender that accepts your loan data. Once a lender approves you for a cash advance, they’ll electronically deposit the payday loan amount directly into your checking or savings account. Our service providers offer flexible payment options and a discreet service that gets you the cash you need right now. It’s that easy, so why wait to get that cash advance? So why will payday loan activity increase? Well just because banks stop or slow down lending it does not mean that the obligations of consumers stops. And in the absence of first level lenders, consumers in need will turn to Back Street lenders like payday loan shops, pawnshops, and check cashing joints. These financial service companies are typically maligned by Main Street lenders but no matter what you think a payday loan outfit does serve a purpose. Granted, that purpose might be to be there to lend when others won’t, that does not mean that the need does not exist for the consumer to borrow funds for a short period of time. One thing that you’ll never see in the payday loan world are collateralized debt obligations (CDO), special investment vehicles (SIV) or a subprime meltdown. It could easily be argued in light of recent banking and investment house failures that payday lenders behave in a more prudent fashion. Some states and localities are trying to shut down payday loan providers. If they are successful the only thing that will happen is that the subprime segment of the population that typically uses payday loan shops will not have them to turn to when their banks have forsaken them. Payday loan providers would not exist unless there was a need, a desire and a customer base that was not otherwise served. Granted that customer base is closer to the poverty line than Main Street lenders would touch but just because the clientele is less credit proper does not eliminate their need for quick access to cash. Can payday loans be abused, yes. Can mortgages be abused, yes. Can a payday loan be expensive, yes. Can a credit card charge high fees and interest, you bet. Eliminating the payday loan does not eliminate the underlying reasons why a segment of the population uses payday loans . In fact, the elimination of payday lenders may simply lead that same group of consumers to use criminally based lenders, and I’m not talking Bear Stearns. Other Related Articles to Read Teresa Writes In And Asks “What Should I Do Next?” Samantha Says “My Husband And I Are Young And Don’t Want to File Bankruptcy. What Do We Do?”

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Now that banks have stopped their rampant lending to consumers what should we expect next? Well let’s not be surprised if we see an increase in payday loan or title loan activity. A payday loan is an unsecured, short-term cash advance until your payday. Payday loans are typically hyped with payday lenders saying things like: Personal Cash Advance is the fastest way to obtain secure, online cash advance and payday loans. Signing up and qualifying for a payday loan is quick and easy, and in many cases there are no documents to fax depending on the lender that accepts your loan data. Once a lender approves you for a cash advance, they’ll electronically deposit the payday loan amount directly into your checking or savings account. Our service providers offer flexible payment options and a discreet service that gets you the cash you need right now. It’s that easy, so why wait to get that cash advance? So why will payday loan activity increase? Well just because banks stop or slow down lending it does not mean that the obligations of consumers stops. And in the absence of first level lenders, consumers in need will turn to Back Street lenders like payday loan shops, pawnshops, and check cashing joints. These financial service companies are typically maligned by Main Street lenders but no matter what you think a payday loan outfit does serve a purpose. Granted, that purpose might be to be there to lend when others won’t, that does not mean that the need does not exist for the consumer to borrow funds for a short period of time. One thing that you’ll never see in the payday loan world are collateralized debt obligations (CDO), special investment vehicles (SIV) or a subprime meltdown. It could easily be argued in light of recent banking and investment house failures that payday lenders behave in a more prudent fashion. Some states and localities are trying to shut down payday loan providers. If they are successful the only thing that will happen is that the subprime segment of the population that typically uses payday loan shops will not have them to turn to when their banks have forsaken them. Payday loan providers would not exist unless there was a need, a desire and a customer base that was not otherwise served. Granted that customer base is closer to the poverty line than Main Street lenders would touch but just because the clientele is less credit proper does not eliminate their need for quick access to cash. Can payday loans be abused, yes. Can mortgages be abused, yes. Can a payday loan be expensive, yes. Can a credit card charge high fees and interest, you bet. Eliminating the payday loan does not eliminate the underlying reasons why a segment of the population uses payday loans . In fact, the elimination of payday lenders may simply lead that same group of consumers to use criminally based lenders, and I’m not talking Bear Stearns. Other Related Articles to Read Teresa Writes In And Asks “What Should I Do Next?” Samantha Says “My Husband And I Are Young And Don’t Want to File Bankruptcy. What Do We Do?”

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If you're new here, you may want to subscribe to my RSS feed right now, before you forget, to get the latest posts. Thanks for visiting!The is no doubt that payday lenders have a bad name, they probably rank right around used car sales people when it comes to trustworthiness and believability ...[Read More]

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I often listen to the hatred and disgust from many people regarding payday loans. People feel that payday loans screw consumers and lead to massively high interest rates. They also hate payday loans because they have heard other people bitch and complain about them rather than think through all ...[Read More]

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