Archive for August, 2017

Read the Terms of Your Credit Card

Tuesday, August 22nd, 2017

The terms of your credit card can be important. It may say that they can cancel the card if you don’t use it every 6 months, and if they cancel the card, that could hurt your credit score. When you apply for a credit card, the terms on the account aren’t etched in stone. In broad layman’s terms, that [credit card] contract basically says the bank can do quite a lot of things, including changing the conditions.

credit card debt

Generally, issuers must notify you about significant changes to your account 45 days in advance. But you might not get a heads-up if:
•You already agreed to certain changes. For example, your issuer might not warn you about an interest rate increase due to a hike in the prime rate. That’s because when you applied for a card with a variable interest rate, you agreed to changes like these. Likewise, you probably won’t get a reminder if a 0% interest period is about to expire.
•You’re behind on payments or haven’t used your account for several months. In this case, issuers usually can close your account, causing you to forfeit any accumulated rewards, or reduce your limit without warning. However, they’re still generally required to give you 45 days notice before tacking on penalties related to exceeding a newly reduced limit. Typically, you’ll also get at least 45 days notice if your issuer is increasing your interest rate because you’ve fallen behind on payments.

Issuers also are generally required to provide reasons for negative changes if those changes affect only some of its accounts, not all. If you don’t understand why your issuer is modifying your account, call and ask.

Carolyn Secor P.A. focuses its practice in the areas of Bankruptcy and Foreclosure Defense in Clearwater, Florida.  For more information, go to our web site
or call (727) 254-1704.

Credit Score and Paying Off Credit Cards

Monday, August 14th, 2017

Paying off a credit card is a big accomplishment. If you are considering the pain, you are problem wanting to know about the benefits, and whether an improved credit rating is one of them. Refer NerdWallet August, 2017.

The good news is that your credit will probably improve — and you won’t have to wait till you make your final payment to see those gains.

credit score

Paying down credit card balances helps your score

There’s no doubt about it: Paying credit cards down or off can do wonders for your credit score. That’s because a significant portion of your score is determined by amounts owed, and the most influential factor here is your credit utilization ratio.

Credit utilization is simply how much of your credit limit you’re using. For example, if you have a credit limit of $5,000 and your outstanding balance is $2,500, your credit utilization ratio would be 50% on that card. VantageScore calls this ratio “highly influential,” and FICO says it accounts for about 30% of your score.

Most experts recommend keeping utilization below 30% both overall and on any one card, and lower is better. If you were dealing with large balances, it’s likely that you exceeded this 30% threshold. Your credit score was probably not in top shape while you were lugging around all that debt.

As you paid down your balance, your credit utilization ratio improved, so your credit probably did too.

Carolyn Secor P.A. focuses its practice in the areas of Bankruptcy and Foreclosure Defense in Clearwater, Florida.  For more information, go to our web site
or call (727) 254-1704.

Bankruptcy Tips

Monday, August 7th, 2017

If you are thinking about filing for bankruptcy, consider the following ideas.

Security deposits with landlords

If the debtors are renting, make sure you include the deposit paid to the landlord on Schedule B. Listing this asset does not take money from the debtor; but not listing it could throw up a red flag to the court that you may have left out additional information.

reverse mortgage person

Of course, if there is no security deposit with the landlord you need to make a note for the attorney file in case this question is asked by the Trustee.

Household goods and furnishings (no lien)

Every debtor filing bankruptcy has some type of household goods and furnishings, even if it is an empty guitar case where they keep their clothes.  In addition, even if the debtor is renting a furnished apartment, he or she will have some type of household goods and furnishings such as a trash can, knives, forks, spoons and bowls, etc.  Therefore, this property type needs to always be included on every bankruptcy petition you prepare.

Household goods and furnishings (with a lien)

Any household goods and furnishings with a lien attached to them should be listed separately on Schedule B.  Then, if the debtor’s intend to keep the asset and has the income to continue making the payments, the monthly payment needs to be listed on Line 13(b) of Schedule J.

Wearing apparel

Every person filing bankruptcy will have wearing apparel.  However, debtors often do not think their clothing is worth much money and will normally write $0 as to the value of their clothing when filling out the client intake forms.  However, even if the debtor only owns a pair of sneakers, a t-shirt and a pair of shorts, there is at least a value of $1.00 that is listed under this property type on Schedule B.

One good rule of thumb is to include the number of people in the household when you write the description for this property type.  For example:

Wearing apparel and personal effects for 2 adults, 1 infant and 1 teenager

Next, make sure these family members are all accounted for on Schedule I of the petition.  This also provides backup for the additional expenses you list on Schedule J for such items as baby diapers and formula, school sports expenses, etc.

Furs and Jewelry

If the debtor is married they will normally always own a wedding ring.  Therefore, the court will look for this asset to be listed on Schedule B for any married debtor.  Of course, you may encounter the rare incident where a married person has no wedding ring, but you need to make sure this information is recorded in the file before you decide not to list it on Schedule B.

Interests in Insurance Policies

Often, you do not know about the term life insurance policy until you get to the paycheck stubs and find the deduction from the debtor’s paycheck.  Distinguish between “term” and “whole life” policies for this property type on Schedule B.  And because “term” life insurance policies have no cash value you will leave the amount of “$0” as the market value.  However, “whole” life insurance policies will have a market value.

Carolyn Secor P.A. focuses its practice in the areas of Bankruptcy and Foreclosure Defense in Clearwater, Florida.  For more information, go to our web site
or call (727) 254-1704.