Credit and Debt Blog
A Service of Debtors Unite, Inc.
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I hear some people say that credit counseling is just like bankruptcy. Others say that you cannot get a loan if you are on a debt management plan. There is so much incorrect information being discussed, and regrettably, it is often by professional mortgage loan officers and bankers.
Let’s bury the hatchet on those old urban legends. Here is the truth, from Fair Isaac Corporation, the Federal Housing Administration (FHA) and the US Department of Housing and Urban Development. (more…)
If you have ever pulled your credit report, you may have noticed inquiries that show up as “AR” or Account Review. Don’t worry–these don’t count against you as hard pulls.
So what are Account Review inquiries? In short, these are attempts by your creditors to invoke the universal default clause in your card holder agreement. (more…)
Some critics claim that credit counseling is biased toward creditors. Even the Internal Revenue Service has claimed that credit counseling provides private benefit to creditors.
Some credit counseling agencies are more concerned with their own bottom line than yours. With all of these revelations, how do you decide which agency to contact? Also, how can you trust them to represent you? (more…)
LTD Financial Services agreed to a settlement with the Federal Trade Commission to resolve nearly 1,500 complaints of illegally threatening and misleading debtors. This settlement was announced without any acknowledgment of wrongdoing.
And so after this big settlement, you may be surprised that not a dime of it is going to the victims of harassment. Instead, it amounts to penalties owed to the federal government. It is still up to individual victims to sue for civil damages. (more…)
The IRS views forgiven debt as a form of income. We know that debt settlement can cause your taxes to go up. Did you know that foreclosure works the same way?
That’s right. If your foreclosed property sells for less than the mortgage balance, you have pay taxes on the difference. Some foreclosed properties are selling for tens of thousands of dollars below what is owed, meaning tax bills could reach several thousands of dollars extra. One proposed bill would change that though. (more…)
If you have ever settled a debt, you may have received an unwelcome surprise. Anytime you save $600 or more on a debt balance by negotiating a settlement, the debt collector is required to issue a 1099-C form and report the information to the Internal Revenue Service.
So what exactly is a 1099-C form? In short, it is a declaration that the debt collector provided you with income to pay your debt. And now Uncle Sam and possibly your own state revenue department expect you to pay taxes on that income. (more…)
Washington Mutual was accused of pressuring home appraisers to provide inflated values. Now New York Attorney General Andrew Cuomo is expanding the investigation to include Fannie Mae and Freddie Mac, who purchased or guaranteed many of these loans.
According to Brian Faith of Fannie Mae, “if the examiner determines we own or guarantee mortgages with inflated appraisals, our guide states that the lender must buy back the loans that do not meet our standards and requirements.” This would open Washington Mutual to tremendous liabilities from homeowner defaults. (more…)
For years, most major credit card issuers offered only one type of credit card product platform. This was either Visa or MasterCard. Discover offered its own platform as did American Express.
Under pressure to reveal potentially damaging information about possible exclusivity arrangements and other anticompetitive practices, Visa has decided to avoid a trial altogether and settle with American Express. This settlement is expected to approach $2.25 billion. (more…)
When trying to eliminate credit card debt, it seems counterproductive to invest money that will likely earn a lower return than what you are paying in credit card interest. In some situations, you may wish to temporarily put off your retirement plans.
However, many people mistakenly avoid taking advantage of incentives that exceed what they are saving in credit card interest. There are indeed many situations where you should invest even when in debt. (more…)
Known as the Hillis lawsuit, this class action lawsuit may change the way credit bureaus market their products. The lawsuit accused Equifax of violating terms of the Credit Repair Organization Act in its marketing of consumer products.
Equifax and Fair Isaac Corporation entered into a class action settlement that has received final approval from the court. In this settlement, Equifax has agreed to avoid using certain words or phrases in conjunction with their consumer products until September 6, 2009. (more…)
