Saturday, January 5

So, take me to court then!

What happens to your credit if you are sued by someone and they win? Do lenders know? Does it matter?

If you are sued, and the other party wins, a money judgment will be entered in their favor. This judgment is a public record and therefore can and probably will become public knowledge. Anyone that wants to know can go to the county office (the county in which you reside) and search your name against the public records. This record will remain 'active' for 10 years unless it is renewed. If it is renewed, it will remain active for another 10 years. However, it can be renewed only once.

This judgment will likely appear on your credit report, and if you own real estate, it will become a lien against the real estate. When a lender looks at your credit report and observes this judgment record, it is likely they will want an explanation at best, at worst they will deny your loan request without any questions asked. Of course, they will take into consideration a number of things like how old the judgment is and whether or not you've been sued successfully by anyone else and whether or not there are any other collection items reporting on your credit file.

Because this is a public record, if it is picked up on your credit report, it will have an adverse effect on your credit score. Public records of any kind will drag your credit score down. This will impair your ability to get credit with reasonable terms, if at all.

If a creditor (or anyone else for that matter) receives a money judgment against you, they can move to garnish your wages and assets. If they are able to track down your bank accounts, their attorney can lawfully demand that the deposit institution relinquish your money, and the deposit institution is required to do so.

If you're an employee and your income is above a certain level, the judgment creditor can garnish your wages by turning the matter over to the county sheriff. If you're self employed, the sheriff can seize your cash register, or seize payment(s) from your customers.

Does any of this matter? To the creditor, absolutely! To the judgment debtor? Depends I guess! If they don't have a job or any assets, and their credit history is already bad, then I guess it wouldn't really matter too much. But if the person is of good credit character, they might look for another way to resolve the matter to avoid the judgment.

If someone owes you money, a money judgment might be able to help you. Remember, you can't get blood from a stone, and it's no fun trying. It's a waste of time; impossible! Don't waste your time and resources, and don't throw good money after bad trying to get blood from a stone. Depending upon how much you're suing for, the court might require that you hire an attorney to represent you. Check with your local court to find out the maximum amount that you can bring a lawsuit for in small claims court.

Friday, January 4

Consumer Finance Tips from NAFCU and a plug for Credit Unions

NAFCU: National Association of Federal Credit Unions | NAFCU offers consumer finance tips for 2008
  • Create a budget: Know how much money you bring home and how much you spend. If you don’t know how to make a budget, check with a credit union; many offer financial literacy classes.
  • Vow to spend less than you make: If you are constantly overspending, you will never have enough money to save or invest.

  • Start saving now: It pays to save for things like retirement, college and buying a house as early as possible. Dropping unnecessary services and avoiding ATM fees can also help; thousands of ATMs in credit unions’ networks are fee-free, while bank ATM fees have hit record highs.
  • Review your credit record and financial statements regularly: Get a free copy of your credit report once a year at Scrutinize statements from your financial institution and credit-card companies regularly to guard against identity theft.
  • Reduce your debt: Make a plan to reduce your balances. Plan to pay the highest-cost credit card first. Consolidating debt may also help, as can paying more than the minimum due each month.
  • Plan ahead: This applies to everything from vacations to holiday shopping. Look for bargain airfares, start a vacation or holiday account. At many credit unions, you can open an account with as little as $5.
  • Start an emergency fund: Unexpected events like an illness or an auto or appliance repair can require big money. Most financial advisors recommend saving three months’ expenses to fund these items.
  • Make your money work for you: Credit unions offer competitive rates and great service in a broad range of products and services, including savings and checking; many offer online services. Visit the Credit Union Data section at to find one.
  • Use credit cards smartly: Get a credit card with a low annual fee or with rewards that suit your interests, and pay on time. Consumer Reports recently found that credit unions offer some of the best credit card rates.
  • Review all your financial documents: ID thieves can be anywhere, so shred financial documents and credit card offers before throwing them out. Review your insurance needs, and make a will.

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Thursday, January 3

Consumer Protection

There are a number of laws in the United States that regulate businesses and how they interact with their customers. These laws are intended to protect the consumer against unfair business practices. To a large degree, these law do as they were intended. To another degree, many people do not understand them, and because of this lack of understanding, do not benefit from them as much as they should. And yet to another degree, many businesses and business people do not understand them and put themselves and their businesses and\or employers at risk because of their ignorance.

Here is a list of most of the Consumer Protections Acts (laws), and links to some informational and official web sites.

Wednesday, January 2

Spend a Day Without Spending Anything!

Here is a great way to save a little money every week!

Do you know how much money you spend every day? I'm not talking about your daily car payment or mortgage loan payment, I'm talking about the cost for the cup(s) of coffee, eating out, things like that. If you are like me, it is pretty easy to spend quite a bit each day on little things that can add up to a lot of wasted cash.

One of the better ideas that I have read is designating one day each week as your 'no spending day'. Did you know that there is an official Buy Nothing Day? (This year it was on November 23rd in the U.S. Here is a link to the BND web site so you can keep track of it for 2008). When this day comes each week, instead of wasting the money on what-have-you, put it in a savings jar. Then, at the end of the month, decide what you are going to do with it; apply it towards a bill or put it in your savings account.

Keeping track of what you spend each day is one of the first steps to take when putting together a budget.

Read this article for more about Adbusters and BND

Tuesday, January 1

New Year Resolutions - 2008

A little off topic, but here are my resolutions for the year:

  • Drop Sixteen Pounds by April 1- just before hunting season '07, I weighed in at 166#. This morning I'm 180#. I have this really cool Navy Seals exercise and diet plan that worked very well for me a few years ago. I'll begin that plan again to help reach this goal.
  • Payoff the MBNA Visa Card- I have a few more months at the intro rate of 1.49%, then it will adjust to prime +. The balance is right around $7k (I intentionally charged some big ticket expenses and purchases instead of taking the money out of a high yielding money market account, of which I will do when the rate on the credit card adjusts.)
  • Sell the boat- not the little fishing boat, but the run about. On top of being expensive to insure and maintain, the price of gasoline is becoming quite prohibitive. The only problem with selling it now is I'll be taking a bath in losses because I'll need to price it low enough to attract a buyer. The boat, although in extremely good condition, is 20 years old this year. This 23' Regal Valenti runs like a top, powered by a 7.4 liter Mercruiser. I've owned it now for 4 years and loved almost every minute with it! In case you or somebody you know wants to buy it, I'll email you pictures! It has a brand new 2006 Venture Trailer that can go with it, if the price is right!
  • Read a book a week- right now I'm finishing up Rudy Giuliani's biography (not that I'm a fan or anything, just reading the book). Next in line will be Tim Ferriss' 4 Hour Work Week or Lee Iaccoca's latest.
  • Work 4 hours per week!
  • Stay within the budget!
  • Continue to grow my business- will be adding a few new services to include tax prep and plastic card POS processing.
  • Visit Graceland

Monday, December 31

Compulsive Spending Disorder

Do you like to shop till you drop? Do you run up your credit cards on shopping sprees? Do you go to the store every day? Do you spend a lot of time at on-line shopping sites? Do you feel 'good' when shopping, and then guilty after? Do you shop for a 'pick me up' when you're feeling down? Are you suffocating in debt? Do you know deep down that you have a spending problem?

These are all signs of a habitual spender. This is as much an addiction as is alcoholism and can be just as damaging. Not only can this addiction ruin your relationships, it can drive you into financial ruins and cause physical problems too.

What can you do? First, recognize and admit that there is a problem. Then determine the cause of your compulsion. Are you lonely, tired, angry, or depressed? Are you bored? Admitting that there is a problem and discovering the reasons why you spend is the first step in taking control of the situation.

This is a very serious problem for many people. If you feel (or know) that you have a problem, seek professional help.

Here are a few starting points:

Congratulations on taking your first step. You are on your way to recovering from this problem. You are in the drivers seat!