3 Easy Steps Towards Credit RepairBefore signing up for any program, consumers should be sure to do their homework. Check for a business review on the company at BBB.org. Do an internet search for the company’s name along with “reviews” or “complaints” to see what people are saying about them. Consumers should also check with their state’s Attorney General or local consumer protection agencies.
In the U.S., consumers have rights and are protected by the Credit Repair Organization Act, enforced by the FTC.
Legitimate companies adhering to the Act must provide:
? A written contract detailing consumer’s rights and the services to be performed.
? A three day cancellation period with no charges.
? Details on how long it will take for consumers to get results.
? An accounting of all costs and fees.
? Any guarantees that they are making through their marketing
Can credit repair help you in Iowa to achieve financial stability? 4 Ways Bankruptcy Can Help You
While filing for bankruptcy may not be the ideal, there are ways doing so can help you.
Eliminate certain debts. Bankruptcy may allow you to wipe out unsecured debts, and some taxes. Student loans typically cannot be discharged, except in cases of extreme hardship. Secured debts, like car loans or mortgages (not including certain underwater mortgages) are not eliminated, however, past due payments may be restructured to let the borrower catch up.
Stop aggressive debt collectors. When you file, you become protected by the “automatic stay,” which stops most collection actions against you. This can give you breathing room while you get back on your feet.
Avoid taxes on canceled debt. If you don’t pay back some of your debt, the creditor may be required to send you a 1099-C reporting this “cancelled” debt as income. This can result in a tax headache for you in future years. But debts discharged in bankruptcy are not considered taxable income, so it’s one less thing you have to worry about.
Allow you to keep protected property. Most of the time, savings in your qualified retirement plans are safe from creditors. In addition, in every state there is a list of exemptions — property you get to keep. There are also federal exemptions you may be able to choose in certain states..
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