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File bankruptcy myself, stop garnishment?

Dear Bankruptcy Adviser,

I am trying to file bankruptcy because my paycheck is being garnished. Can I file a bankruptcy petition to the court myself to stop the garnishment?
– Gail

Dear Gail,
Yes, you can. While you are required to know the bankruptcy laws when you file, you do not need anyone to help you file a bankruptcy petition. Many people file without legal representation.

Stopping the garnishment is not impossible or very difficult. All 50 states have similar, if not identical, procedures in wage-garnishment cases. You must follow specific steps, which can all be done the same day.

1. Complete the bankruptcy petition, and have proof you’ve completed the required credit-counseling course.

 

2. File the bankruptcy petition, and obtain a case number. You can bring the petition directly to the bankruptcy court clerk’s window. Once the clerk accepts your completed paperwork, you will receive an official court stamp and case number confirming your case has been filed.

3. Get the Earnings Withholding Order, or EWO, from your employer. Often, the first time you learn of a garnishment is from your employer, though you’re supposed to receive notification by mail. Your employer’s payroll or the human resources department will have this document.

4. Notify the creditor garnishing your wages that you filed for bankruptcy. The EWO has the name of the creditor and any attorney or law firm that handled the case. You must fax them proof of the bankruptcy filing and the EWO, so the creditor can verify the bankruptcy filing.

Yes, the creditor has the garnishment order already, but you want to make this as easy as possible for its staff. You also want to mail them copies, via certified mail, of the stamped page showing you filed bankruptcy and the EWO. In almost all cases, the creditor will immediately confirm you filed bankruptcy and notify the county sheriff to terminate the garnishment.

5. Notify the sheriff yourself. Information about the sheriff also is on the garnishment order. The sheriff has to receive an official notification from the creditor and then will tell your employer to stop the garnishment.

Here is where you’re likely to face the biggest delay in ending the garnishment. Your employer will not stop garnishing wages simply because you notify payroll or human resources you filed for bankruptcy. The employer must receive notification from the sheriff. In some areas, the sheriff’s department is understaffed, overworked or both. Getting the sheriff’s office to process the request can take days, weeks or even months. The garnishment will continue until the sheriff notifies your employer.

6. Let your payroll department or service know you filed. Put it on notice that it ought to be receiving something from the sheriff soon.

Now, you may want to know whether you can recover any of the money garnished prior to filing. Unfortunately, I cannot answer that question. Each state has different amounts of money you can protect when you file for bankruptcy. In some states, you might not be able to protect those garnished funds. So, even though you can stop future garnishments, you might not be able to recover the funds already taken.

The person assigned to your bankruptcy case, called a trustee, will request to receive any garnished funds that are beyond your reach. The trustee then will distribute a portion of those funds to your other creditors.

Any money taken after your case has been filed is protected. In most cases, the sheriff will mail back to your employer any funds received following notification of the bankruptcy and the termination of the garnishment order. Your employer will then issue you those funds on a future paycheck.

Good luck!

US Sees Drop in Foreclosures

The latest report from CoreLogic indicates U.S. foreclosure rates are finally falling, with more than 60 major markets reporting a decrease in foreclosure rates in February compared to last year. The National Foreclosure Report shows that the number of homes with mortgages in the foreclosure inventory has dropped from 3.6% to 3.4%, or 1.4 million properties. Measured another way, the number of buyers in foreclosure has dropped 7.6% between February 2012 and last February. States with the highest foreclosure rates include Florida (12%), New Jersey (6.6%) and Illinois (5.4%), and those with the lowest are Wyoming (0.7%), North Dakota and Alaska (both at 0.8%). For more on this continue reading the following article from Property Wire.

The number of properties in the United States ending up in foreclosure has decreased slightly and is expected to continue doing so as the Spring buying season gets underway.

There were approximately 65,000 completed foreclosures in February 2012, compared to 66,000 in February 2011, and 71,000 in January 2012, according to the latest figures from CoreLogic, a leading provider of information and analysis in the real estate sector.

From the start of the financial crisis in September 2008, there have been approximately 3.4 million completed foreclosures and the number of completed foreclosures for the 12 months ending in February was 862,000, the firm’s National Foreclosure Report shows.

Approximately 1.4 million homes, or 3.4% of all homes with a mortgage, were in the foreclosure inventory as of February 2012 compared to 1.5 million, or 3.6%, in February 2011 and 1.4 million, or 3.4%, in January 2012.

Nationally, the number of borrowers in the foreclosure inventory decreased by 115,000, a decline of 7.6% in February 2012 compared to February 2011.

‘The pace of completed foreclosures is down slightly compared to January, running at an annualized pace of 670,000, but compares favorably to the pace of completed foreclosures in February a year ago. Even though the pace of completed foreclosures has slowed, the overall foreclosure inventory is decreasing because Real Estate Owned sales were up in February,’ said Mark Fleming, chief economist for CoreLogic.

‘With the spring buying season upon us, the inventory may decline further as the pace of distressed-asset sales rises along with the rest of the housing market,’ he added.

In February, more than 60 major markets saw a decrease in their foreclosure rates compared to a year ago. ‘This combined with faster REO clearing rates, better employment news, and continued historically low interest rates are all positive signs of improvement in the housing economy,’ explained Anand Nallathambi, president and chief executive officer of CoreLogic.

The share of borrowers nationally that were 90 or more days late on their mortgage payment fell to 7.3% in February 2012 from 7.% in February 2012 than the pace of REO sales, as measured by the distressed clearing ratio.

The distressed clearing ratio is calculated by dividing the number of REO sales by the number of completed foreclosures; the higher the ratio, the faster the pace of REO sales relative to the pace of completed foreclosures. The distressed clearing ratio for February 2012 was 0.73, up from 0.66 in January 2012.

The five states with the largest number of completed foreclosures during the 12 months ending in February 2012 were California at 154,000, Florida at 87,000, Michigan at 64,000, Arizona at 63,000, and Texas at 58,000. These five states accounted for 49.4% of all completed foreclosures nationally.

The five states with the highest foreclosure rates were Florida at 12%, New Jersey with 6.6%, Illinois with 5.4%, Nevada with 5% and New York with 4.9%.

The five states with the lowest foreclosure rates were Wyoming with 0.7%, Alaska and North Dakota both with 0.8%, Nebraska with 1% and Montana with 1.4%.

This article was republished with permission from Property Wire.

Americans brace for next foreclosure wave

GARFIELD HEIGHTS, Ohio (Reuters) – Half a decade into the deepest U.S. housing crisis since the 1930s, many Americans are hoping the crisis is finally nearing its end. House sales are picking up across most of the country, the plunge in prices is slowing and attempts by lenders to claim back properties from struggling borrowers dropped by more than a third in 2011, hitting a four-year low.

But a painful part two of the slump looks set to unfold: Many more U.S. homeowners face the prospect of losing their homes this year as banks pick up the pace of foreclosures.

“We are right back where we were two years ago. I would put money on 2012 being a bigger year for foreclosures than 2010,” said Mark Seifert, executive director of Empowering & Strengthening Ohio’s People (ESOP), a counseling group with 10 offices in Ohio.

“Last year was an anomaly, and not in a good way,” he said.

In 2011, the “robo-signing” scandal, in which foreclosure documents were signed without properly reviewing individual cases, prompted banks to hold back on new foreclosures pending a settlement.

Five major banks eventually struck that settlement with 49 U.S. states in February. Signs are growing the pace of foreclosures is picking up again, something housing experts predict will again weigh on home prices before any sustained recovery can occur.

Mortgage servicing provider Lender Processing Services reported in early March that U.S. foreclosure starts jumped 28 percent in January.

More conclusive national data is not yet available. But watchdog group, 4closurefraud.org which helped uncover the “robo-signing” scandal, says it has turned up evidence of a large rise in new foreclosures between March 1 and 24 by three big banks in Palm Beach County in Florida, one of the states hit hardest by the housing crash

Although foreclosure starts were 50 percent or more lower than for the same period in 2010, those begun by Deutsche Bank were up 47 percent from 2011. Those of Wells Fargo’s rose 68 percent and Bank of America’s, including BAC Home Loans Servicing, jumped nearly seven-fold — 251 starts versus 37 in the same period in 2011. Bank of America said it does not comment on data provided by other sources. Wells Fargo and Deutsche Bank did not comment.

Housing experts say localized warning signs of a new wave of foreclosure are likely to be replicated across much of the United States.

Online foreclosure marketplace RealtyTrac estimated that while foreclosures dropped slightly nationwide in February from January and from February 2011, they rose in 21 states and jumped sharply in cities like Tampa (64 percent), Chicago (43 percent) and Miami (53 percent).

RealtyTrac CEO Brandon Moore said the “numbers point to a gradually rising foreclosure tide as some of the barriers that have been holding back foreclosures are removed.”

One big difference to the early years of the housing crisis, which was dominated by Americans saddled with the most toxic subprime products — with high interest rates where banks asked for no money down or no proof of income — is that today it’s mostly Americans with ordinary mortgages whose ability to meet payment have been hit by the hard economic times.

“The subprime stuff is long gone,” said Michael Redman, founder of 4closurefraud.org. “Now the folks being affected are hardworking, everyday Americans struggling because of the economy.”

“HARD TO CATCH UP”

Until December 2010, Daniel Burns, 52, had spent his working life in the trucking industry as a long-haul driver and manager. When daily loads at the small family business where he worked tailed off, he lost his job.

Unable to cover his mortgage, Burns received a grant from a government fund using money repaid from the 2008 bank bailout. That grant is due to expire in early 2013 and Burns is holding out on hopeful comments from his former employer that he might get his job back if the economy recovers.

“If things don’t pick up, I will be out on the street,” he said, staring from his living room window at two abandoned houses over the road in the middle-class Cleveland suburb of Garfield Heights, the noise of traffic from a nearby Interstate highway filling the street.

Underscoring the uncertainty of his situation, Burns’ cell phone rings and a pre-recorded message announces that his unemployment benefits are due to be cut off in April.

A bit further up the shore of Lake Erie, Cristal Fell, who works night shifts entering data for a trucking company in Toledo, has fallen behind on her mortgage a second time because her ex-husband lost his job and her overtime was cut.

“Once you get behind it’s so hard to catch up,” she said.

Fell, a mother of four, hopes the economy will gather enough speed to help her avoid any risk of losing her home. Her ex-husband has found a new job and she is getting more overtime, so she hopes she can catch up on her mortgage by the fall.

Burns and Fell are the new face of the U.S. housing crisis: Middle class, suburban or rural with a conventional 30-year fixed mortgage at a reasonable interest rate, but unemployed or underemployed. Although the national unemployment rate has fallen to 8.3 percent from its peak of 10 percent in October 2009, nearly 13 million Americans remain jobless, meaning many are struggling to keep up with their mortgage payments.

Real estate company Zillow Inc says more than one in four American homeowners were “under water” or owed more than their homes were worth in the fourth quarter of 2011. The crisis has wiped out some $7 trillion in U.S. household wealth.

“We’re seeing more people coming through who have good loans with reasonable interest rates,” said Ed Jacob, executive director of non-profit lender Neighborhood Housing Services of Chicago Inc, which provides foreclosure counseling. “But in many households only one person works now instead of two, or they had their hours cut.”

“The answer to the housing crisis now is job creation.”

EARLY SIGNS OF UPTICK?

Zillow expects the resurgence in foreclosures this year, combined with excess inventory of unsold, bank-owned homes will contribute to a 3.7 percent national decline in prices before the market hits bottom in 2013 and stays there until 2016.

“The hangover from this crisis will far outlast the party of the boom years,” said Zillow chief economist Stan Humphries.

Getting through the remaining foreclosures and dealing with the resulting flood of homes on the market in the wake of the bank settlement is a necessary part of the healing process for the U.S. housing market, he added.

According to leading broker dealer Amherst Securities, some 9.5 million homes are still at risk of default and in February it said it expected to see the uptick in foreclosures start to hit in March and April.

There is other evidence that many of the foreclosures that did not happen in 2011 will happen this year.

A January report by the Neighborhood Economic Development Advocacy Project in New York found that in the first half of 2011 the number of 90-day pre-foreclosure notices in New York City outnumbered court foreclosure actions by a ratio of 14 to one, indicating that while proceedings were initiated against many homeowners, they were left incomplete.

“Now the banks have a settlement, foreclosure numbers for 2012 are going to be high,” said NEDAP co-director Josh Zinner.

A recent survey by the California Reinvestment Coalition, an umbrella group of nearly 300 non-profit groups in the state, of member agencies found 75 percent of respondents expected increased demand for their foreclosure prevention services in 2012 but more than a third had to scale back services because of funding cuts.

“Funding is a major concern given what our members expect for this year,” said associate director Kevin Stein.

All this has non-profits intensifying calls for the Federal Housing Finance Agency to drop its opposition to allowing the government-backed mortgage giants Fannie Mae and Freddie Mac it regulates to reduce principal for underwater homeowners.

Principal reduction involves reducing the amount borrowers owe in order to make a loan modification affordable for struggling homeowners. Republicans and the FHFA oppose principal reduction because of the risk of “moral hazard”- that homeowners who do not need help will seek to abuse largesse and have their mortgages reduced too.

ESOP in Ohio engages in “hits” on Chase branches — they say Chase is the least accommodating major bank when it comes to working with struggling homeowners — where they try to hand letters to bank mangers calling on chief executive Jamie Dimon to lobby FHFA head Edward DeMarco for principal reductions. A Chase spokeswoman said the bank has made “extensive efforts” to work with homeowners, helping 775,000 borrowers stay in their homes since early 2009, avoiding foreclosure “more than twice as often as we have had to foreclose.” Housing groups like ESOP maintain, as they have throughout the housing crisis, that unless the FHFA embraces widespread principal reduction, many more under water borrowers face losing their homes.

“Until banks engage in meaningful principal reduction as a matter of course,” ESOP’s Seifert said after a recent protest at a Chase branch in Cleveland, “this crisis will not end.”

(Reporting By Nick Carey; Editing by Martin Howell and William Schomberg; Desking by Andrew Hay)

What homebuyers desire in 2012 Part 4

Home buyers in 2012 have some advantages over prospective buyers in other years: low interest rates and low home prices in most markets. Those advantages don’t necessarily translate into confidence about a home purchase. Buyers want to be sure they are buying a home that will at least maintain its market value, if not appreciate over the coming years. In order to feel more certain about their choice of home, today’s buyers desire a property that meets the three main factors that make a residence a good value: price, condition and location.

Roxanne Gennari, a sales associate with Coldwell Banker Residential Brokerage in Princeton Junction, N.J., says local real estate markets across the country vary in their strength.

“Since no one knows when the market will truly level out and values will start to climb, buyers are trying to insulate themselves from buying an overvalued home,” Gennari says. “Buyers are looking for the best deal they can get. In many cases, they only want to buy if they can get a house at a certain price.”

A functional home is what homebuyers want

The days of homebuyers going after the biggest, best house they can afford (and sometimes can’t afford) are over.

“Buying a home used to be all about size and luxury, but now it’s about buying a functional home; one that is satisfactory and just large enough,” says Roxanne Gennari of Coldwell Banker Residential Brokerage in Princeton Junction, N.J. “Some people still want a big home, but those that have owned one often want something smaller and not some rambling home that’s expensive to heat.”

Gary Rogers of Re/Max on the Charles in Waltham, Mass., says homebuyers want smaller homes for several reasons.

“It’s partly a reflection of the recession, that people are being more careful and conservative,” Rogers says. “They are concerned about the manageability of their home, property taxes and utility bills, and they want to be able to save money even after they buy a home.”

Rogers says that while empty nesters are particularly eager to downsize, almost all buyers share the same sensibility about size.

“It used to be OK to be extravagant, to look for a home that had 2,500 or 3,000 square feet when they really only needed 1,800 square feet,” says Rogers. “Times have changed.”

What homebuyers desire in 2012 Part 3

Home buyers in 2012 have some advantages over prospective buyers in other years: low interest rates and low home prices in most markets. Those advantages don’t necessarily translate into confidence about a home purchase. Buyers want to be sure they are buying a home that will at least maintain its market value, if not appreciate over the coming years. In order to feel more certain about their choice of home, today’s buyers desire a property that meets the three main factors that make a residence a good value: price, condition and location.

Roxanne Gennari, a sales associate with Coldwell Banker Residential Brokerage in Princeton Junction, N.J., says local real estate markets across the country vary in their strength.

“Since no one knows when the market will truly level out and values will start to climb, buyers are trying to insulate themselves from buying an overvalued home,” Gennari says. “Buyers are looking for the best deal they can get. In many cases, they only want to buy if they can get a house at a certain price.”

Homebuyers want homes in handy locations

While the real estate market has changed in myriad ways over the past decade, the mantra “location, location, location” has not. Location is tied closely to value, so buyers have become even more interested in purchasing in a desirable area.

“Location has become even more important recently than it used to be, with buyers wanting to be near the city or at least near some kind of public transportation,” says Gary Rogers of Re/Max on the Charles in Waltham, Mass. “We’re seeing empty nesters move into Boston while 20-something and 30-something buyers are moving just outside the city in order to afford to buy.”

In San Francisco, Ben Coleman, broker/owner of Century 21 Hartford Properties, says living within walking distance to amenities and to public transportation is the No. 1 priority for most buyers.

“We talk about Walk Score all the time now, which tells you how close a particular home is to things like a coffee shop, a grocery store, and a bus or subway stop,” Coleman says.

What homebuyers desire in 2012 Part 2

Home buyers in 2012 have some advantages over prospective buyers in other years: low interest rates and low home prices in most markets. Those advantages don’t necessarily translate into confidence about a home purchase. Buyers want to be sure they are buying a home that will at least maintain its market value, if not appreciate over the coming years. In order to feel more certain about their choice of home, today’s buyers desire a property that meets the three main factors that make a residence a good value: price, condition and location.

Roxanne Gennari, a sales associate with Coldwell Banker Residential Brokerage in Princeton Junction, N.J., says local real estate markets across the country vary in their strength.

“Since no one knows when the market will truly level out and values will start to climb, buyers are trying to insulate themselves from buying an overvalued home,” Gennari says. “Buyers are looking for the best deal they can get. In many cases, they only want to buy if they can get a house at a certain price.”

Buyers want homes in move-in condition

Ben Coleman, broker/owner of Century 21 Hartford Properties in San Francisco, says homebuyers looking for a bargain sometimes think they want a fixer-upper — until they see one.

“Some buyers may be willing to do a little bit of cosmetic work like replacing the carpet or having something painted, but most are looking for a home in ready-to-move-in condition,” Coleman says. “The preference is for a maintenance-free home, although few homes are truly maintenance-free.”

Gary Rogers of Re/Max on the Charles in Waltham, Mass, says the desire for ready-to-move-in homes may be a side effect of home-and-garden television programming.

“People used to love ‘This Old House’ and think they wanted to do their own work, but now they watch shows on HGTV like ‘House Hunters,’ where everyone leans toward homes that are in turnkey condition,” Rogers says.

“Buyers don’t want to deal with contractors,” says Leisa Frye, a Realtor with Better Homes and Gardens Real Estate Metro Brokers in Roswell, Ga. “And they don’t want a paint or carpet allowance. I tell my sellers to do everything before they even think about putting their home on the market.

 

What homebuyers desire in 2012 Part 1

Home buyers in 2012 have some advantages over prospective buyers in other years: low interest rates and low home prices in most markets. Those advantages don’t necessarily translate into confidence about a home purchase. Buyers want to be sure they are buying a home that will at least maintain its market value, if not appreciate over the coming years. In order to feel more certain about their choice of home, today’s buyers desire a property that meets the three main factors that make a residence a good value: price, condition and location.

Roxanne Gennari, a sales associate with Coldwell Banker Residential Brokerage in Princeton Junction, N.J., says local real estate markets across the country vary in their strength.

“Since no one knows when the market will truly level out and values will start to climb, buyers are trying to insulate themselves from buying an overvalued home,” Gennari says. “Buyers are looking for the best deal they can get. In many cases, they only want to buy if they can get a house at a certain price.”

Buyers want homes that maintain value

“The most important thing to most buyers is the financial stability of a neighborhood,” says Leisa Frye, a Realtor with Better Homes and Gardens Real Estate Metro Brokers in Roswell, Ga. “Buyers want to make sure their home won’t be worth less in the future, so while they are focused on getting a good deal, they are looking for some control over not losing value in the future. They want a discount on already low prices as an insurance against potential declining value.”

In Massachusetts, Gary Rogers, broker/owner of Re/Max on the Charles in Waltham, Mass., says buyers don’t always find the bargains they look for.

“Lots of buyers expect rock-bottom prices, but there are no steals out there,” Rogers says. “Buyers are trying to get superlow prices, but sellers who are already pricing their home at market value are not accepting those kinds of offers.

3 tips to freshen-up a home you want to sell

Home sales are slowly recovering, but it’s still a buyer’s market. Before you put your house on the market, you need to do a few things to make it more attractive to potential buyers.

“Most buyers aren’t going to have a lot of extra money, so they’re not looking for a fixer-upper,” says Angie Hicks, founder of Angie’s List. “Take care of the little things to get your house in tip-top shape.”

Hicks says there are five areas where you should concentrate your efforts.

Spruce up the kitchen
If you’re going to make improvements to the house, this is a good place to start. Hicks says you can typically get an 80 percent return on investment for kitchen remodeling. But again, keep it simple. You don’t want spend tens of thousands of dollars on a lavish kitchen makeover. She suggests updating cabinets and countertops. New cabinet fronts are about 30 percent less than replacing the cabinets.

Bathroom makeover
This is another area that can turn off potential buyers because a bathroom remodel is expensive. Consider making simple improvements that have a good payback. For example, re-glaze an old tub. “That can make the bathtub look like new again without having to replace it,” Hicks says. And it should only cost a couple of hundred dollars.

Clean or replace carpets
Obviously, you’ll want to clean a dirty carpet. But if it’s badly worn or there are stains that won’t come out, you need to consider replacing it.

The bottom line
You want your house to be as good as or slightly better than the neighbors’ houses. But don’t go overboard. The most expensive house on the block is often the hardest to sell. In this market, a house that appears to be neglected is even worse.

Do You Have a Money Disorder?

Just about everyone has a complicated relationship with money. Studies show that money is the no. 1 reason for divorce in the early years of marriage and a common area of conflict for couples. Even before the recession, 3 out of 4 Americans identified money as the no. 1 source of stress in their lives. Financial strain has been found to reduce relationship satisfaction, worsen depression, and lead to emotional problems, health difficulties, and poor work performance. With record high debt and record low savings rates in the years leading up to the economic crisis, the average American seemed to suffer from a money disorder.

Bottom of Form

Money disorders are persistent patterns of self-destructive and self-limiting financial behaviors. They result from distorted beliefs about money we develop from our financial flashpoint experiences. Financial flashpoints are painful, distressing, and/or dramatic life events associated with money that are so emotionally powerful, they leave an imprint that lasts into adulthood. Financial flashpoints become the foundation of our financial struggles.

Whether it’s a childhood of poverty or want, a message about money subconsciously internalized from a parent, a nest egg lost to an economic downturn later in life, or someone rushing in at the last moment to save the economic day, everyone has experienced a financial flashpoint in their lives. Recognizing them is the first step in stripping them of their power, and overcoming our money disorders. Then we can learn to identify our money beliefs, spot them when they are creeping into our minds, and revise them into healthier, more productive ones.

In Mind Over Money, we describe 3 categories of money disorders:

1. Money Avoidance Disorders (also includes Under spending and Excessive Risk Aversion):

Financial Denial: When, rather than face financial reality, we try to minimize money problems by refusing to think about them all together (e.g. avoiding looking at a bank statement or paying a credit card bill).

Financial Rejection: The experience of guilt whenever money, of any amount, is accrued. People with low self-esteem are particularly prone to this disorder, and it leads to a whole host of financial and psychological troubles.

2. Money-Worshipping Disorders (also includes Pathological Gambling, Workaholism, and Overspending):

Hoarding: When stockpiling objects or money provides a sense of safety, security, and relief of anxiety.

Compulsive Buying: Compulsive buying is overspending on steroids. Compulsive shoppers are consumed by their money worries. They often learned, early in life, that the ritual of shopping provides a temporary escape from worry and anxiety. When they think about and anticipate the pleasure they will feel when they shop, dopamine, a “feel good” chemical, floods their brains-only to wear off quickly, leaving them craving another fix.

3. Relational Money Disorders (also includes Financial Dependence and Financial Incest):

Financial Infidelity: Telling “little green lies” about one’s spending or finances to one’s partner, like making purchases outside an agreed-upon budget or lying about the cost of a big-ticket item. Extreme examples might include taking out a second mortgage behind your partner’s back or opening a secret bank account.

Financial Enabling: Giving money to others whether you can afford it or not; giving when it is not in the other’s long-term best interest; having trouble or finding it impossible to say no to requests for money; and/or even sacrificing one’s own financial wellbeing for the sake of others. A common example is when parents support adult children who should be able to support themselves. Financial Enabling becomes increasingly common among family members in a down economy, when there is sense of guilt about less fortunate relatives.

The basics of financial health aren’t complicated, and we are all capable of mastering them, no matter who we are, or our level of wealth. When we identify our financial flashpoint experiences, challenge our distorted money beliefs, and practice healthy financial behaviors (e.g. maintain reasonable and low debt, have an active savings plan, as well as following a spending plan), we don’t just become materially richer-we become emotionally wealthier as well.

Rebuilding Your Credit – Credit Card Alternatives

When you’re ready to start rebuilding your credit and getting a handle on your credit and credit cards, you might want to be aware of some alternatives to the big banks and the better promoted cards. It depends on what your current challenges are and what kind of solution you’re looking for. Here are some options to consider:

Cards from a Credit Union
A credit union is a financial institution created by an organization where the members pool their assets to provide loans and other financial services to each other. Unlike other financial institutions that are owned by outside shareholders and controlled by paid board members, credit unions are non-profit and are owned and operated by members. Because of this, any dividends go toward offering members lower loan rates, higher savings rates and fewer service fees. With their credit cards, they tend to offer lower annual fees and longer grace periods with less additional fees and penalties than big banks. For a list of credit unions, go you creditunion.coop.

Secured and Prepaid Credit Cards
There are a few differences between secured and prepaid cards. One is that secured cards help you build your credit, while prepaid cards don’t. Be sure to confirm that your secured credit card will be reported to the credit bureaus. Prepaid cards only allow you to spend the amount of money you’ve put into them, while secured cards allow some credit over and above the amount of your deposit. If you pay on time regularly, secured card issuers may offer you a “regular” unsecured credit card, which builds your credit further.

Prepaid cards are a good option for young people who are just learning how to manage finances, partly because they don’t offer the protection that credit cards do if they’re lost or stolen. You may be able to purchase fraud protection, and there are often other fees—monthly fees, transaction fees, reload charges and the like– which are good introductions to the world of finance for the uninitiated. 


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