court http://www.wisebread.com/taxonomy/term/11631/all en-US Here's What Happens If You Don't Pay Your Taxes http://www.wisebread.com/heres-what-happens-if-you-dont-pay-your-taxes <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/heres-what-happens-if-you-dont-pay-your-taxes" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-153832691.jpg" alt="Woman learning what happens if she doesn&#039;t pay taxes" title="" class="imagecache imagecache-250w" width="250" height="142" /></a> </div> </div> </div> <p>As Tax Day looms, you may wonder how high the tax man should rank on your list of creditors. Is it better to postpone paying taxes in order to <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?ref=internal" target="_blank">pay off credit card debt</a>, or to keep the electricity running?</p> <p>Here's what happens if you're not able to pay everything you owe to the IRS, as soon as you owe it.</p> <h2>1. You'll Pay a Penalty</h2> <p>Assuming that you filed your tax return on time but didn't pay your full tax bill, the IRS will charge you <a href="https://www.irs.gov/taxtopics/tc653.html" target="_blank">0.5% of what you owe</a>, every month until you pay, up to 25% of the debt. So if you still owed $1,000 when you filed your return on April 18, you'll owe an additional $5 a month.</p> <p>It's a very good idea to file your return on time, or file an extension, even if you won't be able to pay right away &mdash; fees increase if you haven't filed a return by Tax Day. Also, filing on time might get you a break: The IRS says that if you file for an extension or file your return, you may <a href="https://www.irs.gov/uac/things-you-should-know-about-filing-late-and-paying-penalties" target="_blank">not have to pay the penalty</a> if you've paid 90% of what you owe by Tax Day.</p> <h2>2. You'll Pay Interest</h2> <p>The IRS isn't going to lend you that money interest-free. The rate on money you owe to the IRS is <a href="https://www.irs.gov/pub/irs-news/ir-16-159.pdf" target="_blank">currently 4%</a>.</p> <h2>3. You'll Get a Bill</h2> <p>If you haven't filed your tax return at all, the government will kindly figure out how much you owe for you and send a bill. Actually, not so kindly, because the way they'll calculate your taxes, you'll end up owing more than you would have if you'd done them yourself. The government doesn't have access to all your financial records, so they may not give you <a href="https://www.irs.gov/businesses/small-businesses-self-employed/filing-past-due-tax-returns" target="_blank">credit for your deductions</a>.</p> <p>Even if you file your return, if you owe money, eventually you'll start getting mail about it from the IRS.</p> <h2>4. You Could Get a Lien on Your Home</h2> <p>If you don't pay those bills (or show the IRS they're wrong and you don't owe), the next step is putting a lien on your property &mdash; usually your house, if you own one. This tends to happen if you owe $10,000 or more and haven't worked out a plan with the IRS to pay it off.</p> <p>A <a href="https://www.irs.gov/businesses/small-businesses-self-employed/understanding-a-federal-tax-lien" target="_blank">federal tax lien</a> is a legal document that says if you sell your property, the proceeds will go toward your debt before you see a dime. This could make it tough or impossible to take out a mortgage on your home, and <a href="http://info.courthousedirect.com/blog/bid/309664/How-Do-Liens-Affect-Real-Estate-Sales" target="_blank">complicate the deal</a> if you try to sell your home.</p> <p>The tax lien will be reported on your credit report and will <a href="http://www.experian.com/blogs/ask-experian/tax-liens-in-your-credit-report/" target="_blank">stay there for seven years</a>, even after you pay the debt. This can make it impossible to get approval for new credit cards or other loans.</p> <h2>5. You Could Lose Your Passport</h2> <p>Thanks to a new law, the State Department can now revoke your passport (or refuse to issue you one) if you owe the IRS <a href="http://transportation.house.gov/uploadedfiles/joint_explanatory_statement.pdf" target="_blank">$50,000 or more in delinquent debt</a>. So if your plan was to skip out on your debt, you won't get far.</p> <h2>6. The Government Could Seize Your Property</h2> <p>It's called a levy, and it means the <a href="https://www.irs.gov/businesses/small-businesses-self-employed/levy" target="_blank">IRS can take your Chevy</a>. Or your Ford, or your RV, or boat, or house. They can even garnish your wages or take what you owe right out of your checking account. If you think owing the mob is bad, try owing the federal government.</p> <p>In the IRS' defense, it doesn't start seizing citizens' property out of the blue. You'll get lots of mail warning that you're in default, telling you that you have the right to a hearing, and explaining that next, they're coming for your stuff. Don't ignore that mail.</p> <h2>7. You Could Pay Larger Penalties</h2> <p>If the IRS determines that your failure to pay in full was due to negligence or fraud, the penalties could <a href="https://www.law.cornell.edu/uscode/text/26/6662" target="_blank">climb to 20%</a> or <a href="https://www.irs.gov/irm/part25/irm_25-001-006.html" target="_blank">even 75%</a>.</p> <h2>8. You Could End Up in Court</h2> <p>The IRS would rather work with you to get the money. But if you're recalcitrant or showed intent to defraud them, they can charge you with one or more felonies. In 2008, they <a href="http://www.nytimes.com/2008/01/14/business/14tax.html?ref=business" target="_blank">charged actor Wesley Snipes</a> with conspiracy to defraud the government for refusing to pay taxes on $38 million in earnings. Snipes had joined a movement of tax deniers who interpret various laws to mean that paying taxes is not required.</p> <h2>9. You Could Go to Prison</h2> <p>Most people who owe the IRS don't do time. But Snipes did. He was convicted of three misdemeanors related to his failure to file tax returns and <a href="http://www.forbes.com/sites/robertwood/2015/04/10/10-notorious-tax-cheats-wesley-snipes-hired-tax-professionals-but-still-was-jailed/#4edc682341e2" target="_blank">served three years</a>. It could have been worse: Snipes was acquitted for the felonies he had been charged with.</p> <h2>10. Maybe Nothing Will Happen</h2> <p>If the government doesn't have record of your earnings &mdash; for instance, if you work for cash and don't get dividends on investments &mdash; the IRS may never notice if you don't file a tax return and don't pay a dime. But flaking on filing is definitely a bad idea: Not only will you live in fear of all the consequences mentioned above, but if your earnings are modest, you could be missing out on the <a href="https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit" target="_blank">earned income tax credit</a> and other benefits of being on record as a wage earner, like the ability to get a mortgage loan.</p> <p>It's a good idea to keep in touch with the IRS if you owe them money. In fact, if you file your tax return, pay what you can, and then call them up, they may <a href="https://www.irs.gov/individuals/online-payment-agreement-application" target="_blank">work out a payment plan</a> with you, or even settle for <a href="https://www.irs.gov/individuals/offer-in-compromise-1" target="_blank">less than the full amount</a> you owe.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/carrie-kirby">Carrie Kirby</a> of <a href="http://www.wisebread.com/heres-what-happens-if-you-dont-pay-your-taxes">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-to-do-when-your-tax-preparer-makes-a-mistake">What to Do When Your Tax Preparer Makes a Mistake</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-important-tax-changes-for-2016">5 Important Tax Changes for 2016</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-to-do-if-you-have-a-tax-lien-on-your-house">What to Do If You Have a Tax Lien On Your House</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-lessons-from-tax-day-to-remember-for-next-year">7 Lessons From Tax Day to Remember for Next Year</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-tax-return-mistakes-even-smart-people-make">8 Tax Return Mistakes Even Smart People Make</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Taxes court debt fees IRS jail late payments liens owing money passports payment plans penalties seize property tax day tax returns Fri, 03 Mar 2017 11:00:14 +0000 Carrie Kirby 1898661 at http://www.wisebread.com Does Divorce Affect Your Student Loans? http://www.wisebread.com/does-divorce-affect-your-student-loans <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/does-divorce-affect-your-student-loans" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/broken_heart_cash_25865628.jpg" alt="Learning if divorce affects your student loans" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Going through a divorce can get messy, especially when there are a lot of assets to divide and financial matters to take care of. Even worse, couples often forget that debts &mdash; and not just assets &mdash; must often be split. And student loan debt can be especially hairy. Understanding the ramifications of divorce on student debt is essential to negotiating a mutually beneficial split. (See also: <a href="http://www.wisebread.com/heres-what-happens-to-a-mortgage-in-a-divorce?ref=seealso">Here's What Happens to a Mortgage in a Divorce</a>)</p> <h2>When Did You Take on the Debt?</h2> <p>If you took on your student loan before marriage, then the debt is considered separate property, and you are solely responsible for it. Similarly, you won't be held responsible for any debt taken out by your spouse before marriage.</p> <p>However, if you or your spouse took on student <a href="https://www.nolo.com/legal-encyclopedia/debt-marriage-owe-spouse-debts-29572.html">loan debt while married</a>, then the debt is considered your shared property. As a matter of fact, any debt taken on in a marriage is considered shared property, including the following:</p> <ul> <li>Mortgages</li> <li>Car loans</li> <li>Personal loans</li> <li>Sometimes business loans</li> <li>Credit card debt</li> </ul> <h2>It All Depends on Your State's Laws</h2> <p>Many states are <a href="https://en.wikipedia.org/wiki/Community_property">community property states</a>, which means everything is split down the middle. If you live in a community property state, the student loan debt (along with all other debt) will be split 50-50. Even if one party will suffer financial hardships from the split debt, the court will still hold them liable for half of it.</p> <p>Of course, it is the court's discretion how they split marital property, and each state has unique rules in place. In <a href="https://www.legalzoom.com/knowledge/divorce/topic/equitable-distribution-community-property">equitable distribution states</a>, such as New York, each divorce is weighed differently. According to The Wall Street Journal, &quot;If it seems like one spouse will have high income after a divorce and another will struggle to make debt payments, the higher earner may end up having to fork over some <a href="http://www.wsj.com/articles/SB10001424052702304626804579363253873904162">temporary spousal support</a> to cover the ex's debt payments.&quot;</p> <h2>Consolidated Student Loans</h2> <p>Before 2006, married couples were able to consolidate their loans. Many couples did this to get a lower interest rate and save money &mdash; but for couples that did this, they had to permanently attach themselves to the loan.</p> <p>Unfortunately, if one party does not pay their assigned portion of their loan, the other party will still be held fully responsible. Married couples can no longer consolidate their student loans, so if you were married after 2006, then this does not apply to you.</p> <h2>How to Avoid Problems Before Marriage</h2> <p>No couple wants to think about divorce before they get married, but if student loan debt is worrisome to you, there are a few things you can do before tying the knot. First, it is important that both you and your potential spouse know how much debt you each have. Everything should be laid out on the table. Secondly, to protect yourself, sign a prenuptial agreement that states how debt is supposed to be split in the case of a divorce. (See also: <a href="http://www.wisebread.com/could-a-divorce-improve-your-finances?ref=seealso">Could a Divorce Improve Your Finances?</a>)</p> <h2>So How Much Student Loan Debt Will I Be Responsible for After Divorce?</h2> <p>When it comes to figuring out how much student loan debt you will be responsible for after a divorce, it all depends on your case and the state you live in. It is important for you and your spouse to know <a href="http://www.wisebread.com/life-after-bankruptcy-whats-next">the financial weight of your divorce</a> before committing to one fully. Talk with a divorce attorney to find out more information that relates to your specific case.</p> <p>If the court does hold you responsible for your spouse's student loan debt after divorce, then it is important to pay it. If you don't, you will be held liable, your wages could be garnished, and your credit score can suffer.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/ashley-eneriz">Ashley Eneriz</a> of <a href="http://www.wisebread.com/does-divorce-affect-your-student-loans">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-manage-your-money-during-a-spousal-separation">How to Manage Your Money During a Spousal Separation</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-reasons-building-credit-in-college-helps-you-win-at-life">5 Reasons Building Credit in College Helps You Win at Life</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-protect-yourself-financially-during-a-divorce-or-separation">How to Protect Yourself Financially During a Divorce or Separation</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/could-a-divorce-improve-your-finances">Could a Divorce Improve Your Finances?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-myths-about-divorce-and-money-debunked">4 Myths About Divorce and Money, Debunked</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Education & Training consolidation court divorce loans marriage state laws student debts Tue, 08 Nov 2016 10:00:15 +0000 Ashley Eneriz 1827231 at http://www.wisebread.com 5 Things You Should Know About Debt Relief Lawyers http://www.wisebread.com/5-things-you-should-know-about-debt-relief-lawyers <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-things-you-should-know-about-debt-relief-lawyers" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/lawyer_justice_gavel_57824452.jpg" alt="What you should know about debt relief lawyers" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Is your combined monthly debt so high that you can't afford to pay your mortgage, utility bills, and car payment?</p> <p>If so, a debt relief lawyer might help. These legal professionals specialize in relieving the debt problems of their clients. And while hiring one won't make your money problems magically disappear, it could be the first step to easing your financial pain.</p> <p>Hiring a debt relief lawyer should not be a quick decision, though. These attorneys usually don't work cheap. Here are five facts you need to know about debt relief lawyers, how they operate and how much working with one will cost you.</p> <h2>1. What They Do</h2> <p>Debt relief lawyers take on a number of tasks for their clients &mdash; tasks that will vary depending on how much debt these clients face.</p> <p>An attorney might negotiate with credit card companies, auto lenders, and other creditors, hoping that these creditors will forgive some of the debt their clients owe. They might work with creditors to set up a payment plan in which their clients only pays an amount that they can realistically afford each month.</p> <p>In more severe cases, debt relief lawyers will help their clients negotiate the bankruptcy process, helping them close either a Chapter 13 or Chapter 7 bankruptcy filing.</p> <h2>2. Chapter 7 versus Chapter 13</h2> <p>If you and your debt relief attorney determine that bankruptcy is the best solution to your debt woes, you'll then have to decide whether to file for Chapter 7 or Chapter 13 bankruptcy.</p> <p>In a Chapter 7 bankruptcy filing, most of your unsecured debt is simply eliminated. Because most debts disappear, many consumers facing debt problems prefer this type of bankruptcy. But a Chapter 7 bankruptcy isn't pain-free. You might lose some of your most valuable assets. Say you have a car, the bankruptcy trustee &mdash; the individual who is overseeing your bankruptcy on behalf of the court in which you file &mdash; might order that car sold. The profits from the sale would then be passed out to your creditors.</p> <p>In a Chapter 13 bankruptcy, a judge sets up a repayment plan that allows you pay back your creditors at a pace and payment level that you can afford. Depending on your bankruptcy agreement, you might have to pay back less than what you owe, but your debts won't be eliminated. You'll have to pay at least a portion of them back.</p> <p>On the positive side, you will be able to keep your possessions &mdash; such as a home and car &mdash; during a Chapter 13 bankruptcy filing.</p> <h2>3. Bankruptcy Won't Resolve All Your Debts</h2> <p>Debt relief attorneys can provide you with a way to ease the burden you face because of your debt. But even if you work with one to file for bankruptcy, they can't magically make all of your debts disappear.</p> <p>The National Association of Consumer Bankruptcy Attorneys says that bankruptcy, even Chapter 7, won't eliminate student loan debts, alimony debt, tax debt, and any debt obtained through fraudulent activities.</p> <h2>4. Debt Relief Lawyers Don't Negate Bankruptcy Consequences</h2> <p>Working with a debt relief attorney to file for bankruptcy could leave you with a fresh financial start. But it won't come without consequences.</p> <p>Both Chapter 13 and Chapter 7 bankruptcy filings will cause your three-digit FICO credit score to plummet, often by more than 100 points. This is significant because lenders rely on this score to determine who qualifies for mortgage, auto, and personal loans. They also rely on the score to determine the interest rates they charge to borrowers.</p> <p>If you have a low score, you'll be stuck with a far higher interest rate, which will make your monthly payment higher, too. The negative pull that bankruptcies have on your credit score will lessen over time. If you pay your bills on time each month, your credit score will gradually recover. Doing so, though, can take years.</p> <p>Even worse, bankruptcy filings remain on your credit report for a long time. A Chapter 13 bankruptcy filing will remain on your credit report for seven years. A Chapter 7 filing will stay there for 10. Every time a lender pulls your report during this time, it will see your bankruptcy filing.</p> <h2>5. Debt Relief Attorneys Aren't Cheap</h2> <p>How much a debt relief attorney charges you depends on the amount of money you owe and what services this lawyer tackles on your behalf. The legal website Nolo says that you might spend from $700 to $2,500 if your debt relief attorney files Chapter 7 for you, but $2,500 to $6,000 if your attorney instead has to file a Chapter 13 bankruptcy on your behalf.</p> <p>If you are paying an hourly fee for the services of a debt relief attorney, you can expect to pay from $125 to $350 an hour, according to Nolo.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" data-pin-save="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F5-things-you-should-know-about-debt-relief-lawyers&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F5%2520Things%2520You%2520Should%2520Know%2520About%2520Debt%2520Relief%2520Lawyers.jpg&amp;description=5%20Things%20You%20Should%20Know%20About%20Debt%20Relief%20Lawyers"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/5%20Things%20You%20Should%20Know%20About%20Debt%20Relief%20Lawyers.jpg" alt="5 Things You Should Know About Debt Relief Lawyers" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/5-things-you-should-know-about-debt-relief-lawyers">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-times-bankruptcy-is-the-right-move">3 Times Bankruptcy Is the Right Move</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-you-need-to-know-the-difference-between-secured-and-unsecured-debts">Why You Need to Know the Difference Between Secured and Unsecured Debts</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/11-steps-to-take-when-bankruptcy-is-your-only-option">11 Steps to Take When Bankruptcy Is Your Only Option</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-surprising-ways-revolving-debt-helps-you">5 Surprising Ways Revolving Debt Helps You</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-you-need-to-know-about-writing-a-will">What You Need to Know About Writing a Will</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Debt Management assets attorneys bankruptcy chapter 13 chapter 7 court credit score debt relief lawyers legal help Tue, 25 Oct 2016 10:00:13 +0000 Dan Rafter 1819828 at http://www.wisebread.com Deal With Your Debt or You May Go to Jail http://www.wisebread.com/deal-with-your-debt-or-you-may-go-to-jail <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/deal-with-your-debt-or-you-may-go-to-jail" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/383476178_8fe0f5e767.jpg" alt="gavel" title="gavel" class="imagecache imagecache-250w" width="250" height="188" /></a> </div> </div> </div> <p>Collection agencies are using severe methods to go after debtors. They're going through the courts to collect. The choices are show up, pay up &mdash; or get locked up.</p> <p>First, the collection agency files a lawsuit against the debtor. (The agency should send the debtor an official notification in the mail.) If the debtor doesn't appear at the hearing, the judge can vote in favor of the collection agency (called a default judgment) then schedule another hearing to review the debtor's assets. If the debtor doesn't appear at this hearing, the judge can declare that the debtor is in contempt of court and issue a warrant for his/her arrest. Not only will the debtor have pay what is owed, but also court fines and, in some cases, bail money.</p> <p>Federal law abolished debtor's prison in 1833. However, this scenario has been appearing with increasing regularity in Minnesota, Wisconsin, New Jersey, Arkansas, Indiana, Illinois and Washington. According to the Minneapolis-St. Paul Star Tribune, in 2009, there were 845 cases of debtors being sent to prison in Minnesota.</p> <p>How can you protect yourself and stay out of jail? Follow these five steps:</p> <h3>1. Open your mail</h3> <p>When your account is months past due, your original creditor will usually sell your account to a third-party collection agency for pennies on the dollar (that way they get something for your loan balance). Then, of course, the collection agency wants to make a profit, so they start calling and sending threatening letters to scare the money out of you. If you contact the agency in writing that you want them to stop calling, by law, they should stop.</p> <p>However, if you don't respond they might decide to take you to court. In that case they <i>should </i>send you an official notice of a court hearing with a date so that you can attend and defend yourself. The notice should also have the official court address on the envelope, but sometimes (wrongly) the agency will send an &quot;unofficial&quot; letter giving you notice. Don't put your mail in a big pile or in a brown bag and assume it will go away. Open and read everything; if there is a collection notice, you will know.</p> <h3>2. Know what you owe</h3> <p>Keep track of your outstanding loans. Look at your statements and keep a file. If you are having trouble making timely payments, contact the creditor and let them know. Some creditors will offer a reduced payment/lower interest program. In the case of medical debt, most doctors and hospitals don't charge interest and will usually agree to a payment plan.</p> <h3>3. Review your credit report regularly and dispute errors</h3> <p>Checking your credit report every four to six months will show you where you stand with your debt and debt payments. (Go to <a href="http://www.annualcreditreport.com/">AnnualCreditReport.com</a>.)You can see if an account is so delinquent that it has been sold to a collection agency. It will appear above the Account History section under Collections.</p> <p>For example, it isn't unusual for a person who has been in the hospital to find medical debt in collection that he or she wasn't even aware of. (Hospitals can send dozens of bills so it is easy to miss paying a few.) Also, landlords, utilities and phone companies can come up with final charges, but you might not get the bill if you've moved. Five months later, the charge will show up as a collection item. Review each item in your report, and if something is incorrect, write to the credit bureau to dispute it. (Go to <a href="http://www.ftc.gov/">FTC.gov</a> for dispute forms.)</p> <h3>4. Show up in court if you get a notice</h3> <p>You need to appear in front of the judge to plead your case. If you don't show, then the judge will only hear the collection agency's version of the situation. When there are extenuating circumstances, you can ask the judge for special consideration and work out a compromise payment plan. Also, if you're experiencing financial hardship, bring a financial statement detailing your assets and liabilities and a cash-flow statement with your income and essential expenses.</p> <h3>5. Demand to see proof of the original debt</h3> <p>When you're in court pleading your case, ask the collection agency to show proof of your original debt. In some cases, your account has changed hands several times and the collection agency has no written legal evidence of the original loan. That may win your case right there.</p> <p>Many people are struggling with debt, and collection agencies are getting more aggressive in coming after delinquent accounts. Even if your accounts are in collection, you do have rights. (Go to <a href="http://www.ftc.gov/">FTC.gov</a> for more information on the Fair Debt Collection Practices Act or read a previous <a href="http://www.wisebread.com/laws-the-leg-breakers-don-t-want-you-to-know-about">Wise Bread article on the FDCPA</a>.) Be aware of the potential consequences of ignoring your debts, and be pro-active if you're summoned to court. Otherwise, you might be taking an expensive ride in a paddy wagon to the Big House.</p> <div class="field field-type-text field-field-guestpost-blurb"> <div class="field-label">Guest Post Blurb:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <p>This is a guest post by Hollis Colquhoun. Hollis has over 20 years of experience in the financial industry, is an Accredited Financial Counselor and co-author of <strong>Women Empowering Themselves: A Financial Survival Guide</strong>. Contact her at <a href="http://www.womenempoweringthemselves.com/">Women Empowering Themselves</a>. Here are more articles by Hollis:</p> <ul> <li><a href="http://technorati.com/blogging/article/avoid-expensive-credit-report-services-when1/">Avoid Expensive Credit Report Services When You DIY For Free</a></li> <li><a href="http://technorati.com/business/article/the-college-challenge-which-way-to/">The College Challenge: Which Way To Pay</a></li> </ul> </div> </div> </div> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/hollis-colquhoun">Hollis Colquhoun</a> of <a href="http://www.wisebread.com/deal-with-your-debt-or-you-may-go-to-jail">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/look-out-consumers-debt-collections-get-scarier">Look Out Consumers: Debt Collections Get Scarier</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-things-you-should-know-about-debt-relief-lawyers">5 Things You Should Know About Debt Relief Lawyers</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/always-answer-the-call-expert-advice-on-debt-collection">Always Answer the Call: Expert Advice on Debt Collection</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards">The Best 0% Balance Transfer Credit Cards</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-best-low-interest-rate-credit-cards">The Best Low Interest Rate Credit Cards</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management court debt collections Fair Debt Collections Act Thu, 05 Aug 2010 14:00:07 +0000 Hollis Colquhoun 196262 at http://www.wisebread.com ‘Tis The Season To Get A Speeding Ticket! Are You Next? http://www.wisebread.com/tis-the-season-to-get-a-speeding-ticket-are-you-next <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/tis-the-season-to-get-a-speeding-ticket-are-you-next" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/3090392251_911be4dfaf.jpg" alt="Lights Cop" title="Lights Of The Police Car" class="imagecache imagecache-250w" width="250" height="166" /></a> </div> </div> </div> <p>Yes, speeding tickets suck. And yes, they&rsquo;re also a necessary deterrent; they come not just with fines and points on your license, but insurance rate hikes. This is also the time of year when more speeding tickets are issued, and you may be more likely to get one based on a few factors.</p> <p>So, why is this time of year open season on drivers? And how could you be more likely to get a ticket? Well, there are several factors, which some police officer friends of mine recently let me in on. The most obvious is that it&rsquo;s party season, with the Holidays and New Year's. And parties mean drinking, which means bad driving. There are more cops on the roads, and more cops means more chances of getting a ticket. Simple math. But what about your own situation? What are the circumstances that put you in a higher-risk category of getting a speeding ticket? Here are some questions that will help.</p> <h2>Where do you live?</h2> <p>This is not just party season; it&rsquo;s also budget season. People in businesses everywhere are having huddled conversations with accountants and tax attorneys. And unfortunately, every state in America is also trying to balance the budget (or these days, get somewhere close to breaking even). If you happen to live in a state that&rsquo;s got way more money problems than it should have (sorry Californians) then you&rsquo;re going to be on the receiving end of some budget-boosting strategies. Enter the police force. They have the ability to create revenue for the state in the form of traffic violations. For example, the average traffic cop will cost a city about $75,000 per year in salary, bonuses, and benefits. This same police officer will make the city an average of $200,000 per year in traffic ticket fines. That&rsquo;s $125,000 in pure profit!</p> <p>Make no mistake, this is lucrative. Here are just <a href="http://www.trafficticketsecrets.com/speeding-ticket-facts.html">a few stats</a> I found on the kind of money this can bring in (and this is JUST for speeding tickets &mdash; this doesn&rsquo;t include any other type of traffic violation):</p> <ul> <li>Over 100,000 people a day receive a speeding ticket in this country. That equates to over 41 million speeding tickets per year.</li> <li>One in every six drivers will get a speeding ticket this year.</li> <li>The average speeding ticket costs $150.00.</li> <li>41,000,000 x 150.00 = $6,150,000,000! That&rsquo;s right&hellip;over $6 BILLION.</li> <li>The average raise in insurance costs for one speeding ticket over the course of 3 years is $900.00.</li> <li>41,000,000 x 900 = $36,900,000,000 in extra insurance money in 3 years.</li> <li>Over 95% of people who receive a speeding ticket never contest it and just pay the fine. That includes me by the way.</li> <li>The 5% who fight the ticket usually have their case dismissed and/or receive reduced charges that don&rsquo;t get reported on their driving record. (Oh, and at least 50% of the time, the officer who gave you the ticket doesn&rsquo;t show up.)</li> </ul> <h2>What do you drive?</h2> <p>AOL.com recently released a list of the top 10 makes and models of cars that have <a href="http://autos.aol.com/gallery/vehicle-traffic-ticket">increased chances of getting a speeding ticket</a>. If you&rsquo;re on it (and if you drive a Scion, you probably are) then you increase your chances of getting the ticket. Scion drivers tend to be younger, preferring the cheaper, highly-customizable car. And the Hummer &mdash; well, it&rsquo;s hard to miss one of these suckers.</p> <ul> <li>#9 (tied) Toyota Matrix: 2.64 times higher-than-average</li> <li>#9 (tied) Audi A4: 2.64 times higher-than-average</li> <li>#8 Subaru Outback: 2.66 times higher-than-average</li> <li>#7 Scion xA: 2.75 times higher-than-average</li> <li>#6 Mercedes-Benz CLS 63 AMG: 2.76 times higher-than-average</li> <li>#5 Toyota Camry Solara: 3.06 times higher-than-average</li> <li>#4 Mercedes-Benz CLK: 3.97 times higher-than-average</li> <li>#3 Scion xB: 4.03 times higher-than-average</li> <li>#2 Scion tC: 4.60 times higher-than-average</li> <li>#1 Hummer H2 / H3: 4.63 times higher-than-average</li> </ul> <h2>How old are you?</h2> <p>Hold your breath for this staggering stat. <strong>The age groups between 17 and 24 years of age receive the most speeding tickets.</strong> I know, I was shocked, too. I figured it would be retired nuns. But seriously, at this age the lack of road experience, the determination to disregard rules, and the attitude of thinking they will live forever, keeps this age group at the top of the speeding ticket pile.</p> <h2>What sex are you?</h2> <p>This one is all against men. First, men seem more willing to speed. Next, men have a harder time getting out of a ticket than women. I&rsquo;m not saying why, but just ask around and see how many men compared to women have ever been let off with just a warning. And finally, more women than men are smart enough to fight the tickets. So, if you&rsquo;re a guy, you&rsquo;ve got it all working against you.</p> <h2>And finally&hellip;are you a doctor?</h2> <p>Doctors receive the most speeding tickets than any other profession. Maybe this has something to do with emergency calls. Maybe it just goes hand-in-hand with psyche of someone who wants to be a doctor. But, whatever the reason, if you answered yes to that question, your chances of getting a ticket just went up.</p> <p>So, if you&rsquo;re a 23 year old male doctor, living in California, driving a shiny Hummer H2, I&rsquo;d say you may just be better of taking the bus for the next few weeks.</p> <p>Have a safe holiday season everyone.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/paul-michael">Paul Michael</a> of <a href="http://www.wisebread.com/tis-the-season-to-get-a-speeding-ticket-are-you-next">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/as-sure-as-night-follows-day-youre-going-to-get-a-traffic-ticket-soon">You&#039;re Going to Get a Traffic Ticket Soon</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/do-you-know-how-to-use-a-parking-meter-serious-question">Do you know how to use a parking meter? Serious question.</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/fight-your-speeding-ticket-save-yourself-some-dough">Fight Your Speeding Ticket, Save Yourself Some Dough</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-things-you-should-do-immediately-after-losing-your-wallet">10 Things You Should Do Immediately After Losing Your Wallet</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/are-your-new-tires-really-6-year-old-ticking-time-bombs">Are your new tires really 6-year old ticking time-bombs?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Cars and Transportation Consumer Affairs court driving fines penalty police speeding ticket Tue, 22 Dec 2009 20:00:03 +0000 Paul Michael 4200 at http://www.wisebread.com