(CLASSROOM – FINANCIAL CRISIS OPTIONS): 3S’s 6/28/12
June 29th, 2012 08:19 am · Posted in CHATS & POSTS: Iraqi Dinar Exchange Rate & Buy Dinar Info
[InstructorSquirrel] Good Evening. Tonight I’m going to talk about what options are available to you in a financial crisis and about strategies for rebuilding your credit. Many in our chat-o-sphere are experiencing difficulty “making ends meet” as well as problems with bill collectors, foreclosures and challenged credit during this economic downturn.
[InstructorSquirrel] Waiting on the RV has taken a financial toll on many of us so I hope to provide some generalized information to your questions and in addition, will discuss Federal and state law in general terms.
Read More Link On Right
Please note that nothing said during this discussion should be construed as legal advice or financial advice in pursuing a definitive course of action.
[InstructorSquirrel] Specific laws in your state and the Federal government are available online and can be easily found through a properly worded Google search. I will also be providing you with some links to online resources and websites that may be helpful.
As an entrepreneur and business executive I’ve built three companies from scratch to a net worth of over 20 million each. After law school I started a small consulting practice and built that into one of the early Internet companies.
Currently I’m an executive in a small tech start-up in Dallas writing advanced artificial intelligence software.
As you are probably aware, virtually every part of business touches the law in some way, so I keep my legal skills sharp and one toe in the legal community. I do not practice law as a vocation or hobby.
Many of you have problems with bill collectors, foreclosures and challenged credit. Additionally, at some point during the hour I want to talk to you about strategies for rebuilding your credit.
So with that fire away…..
***************************************************************************** [blackbird] What is the first step to rebuild credit?
[InstructorSquirrel] Experian P.O. Box 9556 Allen, TX 75013
[InstructorSquirrel] Equifax P.O. Box 740241 Atlanta, GA 30374-0241
[InstructorSquirrel] TransUnion Consumer Relations P.O. Box 2000 Chester, PA 19022-2000
[InstructorSquirrel] This is a link to some good information:
[blackbird] So you get your credit reports from the various agencies… then what happens?
[InstructorSquirrel] blackbird – The first thing is to examine them for false records and duplicate records. The government tells us that over 60% of all the credit reports in the US have false information on them
[SALTYDOG] At the point that we can no longer pay our mortgage how do we find out how long we have before we will be foreclosed on and then the sale of our home?
[InstructorSquirrel] The first thing to check in a foreclosure is to see if your state has judicial or non-judicial foreclosure. A judicial foreclosure is on where the mortgage company will have to go to court to foreclose. A non-judicial foreclosure, like we have in Texas, requires only that certified notice be given to the debt holder of an impending sale
[InstructorSquirrel] This link will provide a state-by-state survey of foreclosure law:
Several things are important in a foreclosure:
1. The bank does not want your house
2. They want to work it out with you
3. They will eventually have to protect the bank and foreclose
4. Keep talking to them. Never ignore their notice
Here is a link to government resources and programs related to foreclosure:
[maple] In your opinion, which is better in this economy? Saving our home through Chapter 13 or walking away and allowing the foreclosure (selling) of our home?
[InstructorSquirrel] While I know that question has an emotion issue wrapped in it, I look at it as a business decision. Is your home worth less than you owe on it. If so, then, setting aside the emotional issues, it is a questionable business decision to keep it –
If you have equity in the house (it is worth more than you owe), then you should consider the financial benefit of doing what you have to do to keep it
[maple] Is it possible that post RV these creditors can try to take more than what we owe them just because we are now a bit more wealthy?
[InstructorSquirrel] Creditors cannot legally take money that is not contractually owed to them.
[maple] We are in the process of filing Chapter 13 and I’d like to know if it’s necessary to list that we have IQD and the amount of it? Is this something the trustee can take from us?
[InstructorSquirrel] I am not a bankruptcy expert, but if required by the court to disclose your personal assets then you must do so. However remember than currently your IQD is officially worth about $900 per million — so it is not worth much.
[isnutz] I have dealt with credit agencies [Equifax, etc.] absolutely to no avail and recently had a friend that had a person use their name for credit. He sent them all the paperwork to prove his case and they never got anywhere – which seems to be the case most often. Any advice? Your opinion, please? Thanks
[InstructorSquirrel] isnutz – It is a long process dealing with the credit agencies. Recently they had me listed as dead and it took me four months to prove to them that I was indeed alive and not calling them from well ahhh… “up there” or ahhh… “down there.”
Dealing with the credit agencies should always be in writing and by certified mail return receipt requested so you have a record they got your letters.
[isnutz] After the RV should I be worried about my credit? Nobody want to steal someones bad credit !!!
You should always be concerned about identity theft and yes, remember no matter how much money you have — credit is still King. Pre- or Post-RV you should take aggressive action to improve your credit scores as much as possible
[GinnyS] If you have filed bankruptcy, can the mortgage holder then foreclose?
[InstructorSquirrel] GinnyS – When you file for bankruptcy the court will issue an automatic stay stopping foreclosure. Then as you go through the process you will have the option to confirm (keep) the property of surrender it (in most cases)
[laurelei] What are some steps people can take to rebuild their credit rating?
[InstructorSquirrel] laurelei – First – never, never, never use a debt settlement company. I know they say they can help but they rarely do. Examine your credit report and write the credit agency demanding the removal of false or duplicative reports
For example, if you owe money to Visa and they report it as charged off to the credit agencies, then they turn it over to a collection agency, in many cases the collection agency will also report it to the credit reporting agencies, this double dings your credit
Under the law, a collection agency cannot report negative credit unless they actually OWN the debt
[maple] Post RV, after having gone through a bankruptcy, what will be the easiest and fastest way to build our credit? Will it matter much if what we plan to pay for will be in majority cash?
[InstructorSquirrel] maple – If you go through a bankruptcy, they will come to you. The bankruptcy will be on your credit for 7 years then will drop off. Within a year of confirmation of a bankruptcy plan you will be able to get credit cards, cars loans and such with no problem
[GinnyS] Should we pay a collection agency or pay the money to the debtor?
[InstructorSquirrel] GinnyS – If possible, I only deal with the debtor, not the collection agency. In this environment, if you have cash you can usually settle a debt for 10 to 15% of the face amount, 50% if you agree to make regular payments.
I found out last week that my daughter had a $25,000 AMEX bill that she has not paid. I called them and they agreed to accept $12,000 with no interest if she would make $200 a month payments
[isnutz] When starting a business post rv is it better to use your own money or the bank’s money? I personally would want to save the interest but many say “use their money and save yours.” Are you really saving??? Thanks so much for taking the time for us tonight!!
[InstructorSquirrel] isnutz – That is an involved question and would depend on what kind of business. Donald Trump will tell you to NEVER spend your own money.
[isnutz] Is it important for your credit report to show “paid in full”? Or, is “debt satisfied” good enough?
[InstructorSquirrel] isnutz – I want the report removed completely — to show nothing if the item is not correct. Lets say I owed VISA 10,000 dollars and my credit report said I owed them $11,000. I would write the credit agency and demand the removal of the VISA report because it is wrong.
The Credit Agency would then have 30 days to write VISA, confirm it, in writing or remove it. If you are paying a legitimately reported debt, then you want it to show either as paid in full or satisfied, whichever is true.
[Blessedby] I filed bankruptcy and I’m at the end of my 7 years. I have been received all kinds of credit card offers but I refuse to fall into that trap again. What do you suggest to re-build my credit while waiting for our blessings? Thank you for being here.
[InstructorSquirrel] Blessedby – I would take a credit card, spend money on it regularly and pay it off totally. I would also buy a car, finance it and pay it VERY regularly… Show people that you can manage your credit.
[lil friskie] How often should you monitor your credit report when you have had problems or/and if you have not had any problems?
[InstructorSquirrel] lil friskie – I look at mine quarterly
[lil friskie] …from all 3 reporting agencies? or should you rotate getting a report between the 3 each quarter?
[InstructorSquirrel] lil friskie – I monitor all three quarterly. They may have different information on them.
[isnutz] I plan on buying the land, building the building, and opening the business – actually a pretty large marina. What would be your opinion…., use the bank’s money or my own, sir?
[InstructorSquirrel] IF the bank will loan you the money and you have the cash flow to pay the debt then I would borrow at least part of the money from the bank. Build business credit.
[InstructorSquirrel] Please remember post RV – in addition to enjoying your blessing, to take the time to build/rebuild/repair your credit.
[gra] InstructorSquirrel Make payments even if you can easily pay cash and may never (hopefully) need credit again.
7:47 PM [InstructorSquirrel] gra – Look at it from an income generation point of view. IF you borrow the money for 3.5% and you can invest your money wisely and make 6.5% after tax, then you are making 3.5% profit to invest your money and use someone else for credit. Remember, thanks to our Federal Reserve (no laughing please) interest rates are at an historical low.
[isnutz] When paying of a past due debt sometimes they offer you a discount just to get some of their money but the report it to Equifax, etc. as “satisfied” and not “paid in full.” Does this hurt you?
[InstructorSquirrel] It always helps you to have the debt satisfied. You can tell them that you will pay them but they have to mark it as paid in full. They want your money — tell them what you want nd be firm about it
[GinnyS] InstructorSquirrel One thing I did after a bankruptcy was to buy something at a “6 months same as cash” place and then paid it off early. That helped my credit tremendously! Do you agree with that?
[InstructorSquirrel] GinnyS – Yes. Show a responsible repayment history.
[InstructorSquirrel] I know we are speaking in general terms. In the way of closing remarks remember that if you are in a survival mode then you must keep your finances in prospective.
[InstructorSquirrel] It is not a crime to not be able to pay your debts. They will not come take you to jail. There is a large amount of resources on the internet. Google search for what you need. Take care of you and your families while we wait on the investment to pay off
[InstructorSquirrel] Thank you all. If you just did not want to ask questions in this public forum, then you can email your question to me at: email@example.com
[GinnyS] InstructorSquirrel Thanks so much for your help! In this day and age we need all the free advice we can get sometimes and I, for one appreciate your being here for us!
[lil friskie] Thank you instructor squirrel, you’ve made some great suggestions. Will the earlier links be posted in the forum so we can review them?