In a home equity loan, the consumer takes out a second mortgage on their home by essentially borrowing against how much of the home they actually “own.” (Basically how much of their current mortgage amount has been paid.) That “equity” is measured against how much the property is currently worth on the real estate market to determine the amount that can be borrowed from a lender.
Loan Modification
Whenever a borrower is unable to repay their loan by its existing terms, and that inability is likely to be long-term, lenders may agree to a loan modification arrangement on the debt. Typically, this means lowering the interest rate, but lengthening the time required to pay off the amount. Of course, this also increases the amount the borrower will actually pay over the long-term, but it may be the only way to avoid a default on the loan. Read More
Home Equity Loan
A second mortgage is often called a home equity loan. Consumers go to a lender to borrow against their current equity in their property (how much of the existing mortgage has been paid) compared to the value of the home on the real estate market. The difference in the two is used to determine the amount that can be borrowed. Read More
Credit Monitoring
Credit monitoring is used to “keep an eye” on specific accounts to prevent identity theft. Often these services are associated with a single consumer reporting agency or authority. The entity collects information covered under the terms of the Fair Consumer Reporting Act. The major CRAs are Equifax, Experian, and Transunion. Read More
Credit Counseling
Credit counseling is personalized counseling that helps debtors avoid bankruptcy proceedings by providing basic financial management education. Often this is paired with negotiation services. The counselors work with creditors to reduce interest rates, lengthen payment terms, and take other steps that make a debt more manageable and subject to resolution over the long term.
Credit Report
A credit report is a detailed individual credit history that is compiled by a credit bureau and serves as a basis to determine an applicantÂ’s credit worthiness for future loans. The report will include personal information like past and previous addresses, Social Security number, and work history. There will be a summary of the number and types of credit accounts and their current standing, as well as the details of any accounts that have been turned over to agencies for collection or garnishment. (All credit reports must include information on how the consumer may dispute errors in any of the data compiled.) Read More
Credit Repair
Credit repair is the process by which a bad credit report is “fixed” either by addressing mistakes it contains or resolving financial issues like debt resolution and loan modification. Often the process requires both financial expertise and legal counsel, with a goal of avoiding personal bankruptcy proceedings. Read More
Bankruptcy
A bankruptcy is a legal proceeding that may involve either an individual or business. Neither is able to pay outstanding debts, and turns to a legal process whereby the debtor files a petition with the court to declare themselves “bankrupt.” The authorities will then evaluate all the debtor’s assets, which will be used to repay a degree of the outstanding debt. When the proceedings are completed, regardless of the percentage paid, the debtor is completely relieved of all debt obligations and can, essentially “start over,” although without the assets that were liquidated. Because the liquidation of assets (which may not include an individual’s primary residence) is often a devastating process, most debtors seek other means of debt resolution for the specific purpose of avoiding bankruptcy. Read More
Garnishment
Garnishment is a legal process that seeks to resolve a debt owed by an individual to a third party. Often the third party is the person’s employer, but in many cases garnishment is used as a means to resolve outstanding federal taxes or to compel the payment of child support. In any of these cases, however, the process is the same. The amount that is determined appropriate in the legal proceeding is deducted from the debtor’s paycheck directly and used to resolve the amount owed. The idea is to take the money before the debtor can spend it for other reasons and direct those funds to repayment of the obligation. Read More