Tanisha Warner

When it comes to your finances, the only thing more dangerous than a lack of information is a wealth of misinformation. Because of the complex nature of financial laws, responsible consumers with good intentions can find themselves unintentionally making costly mistakes.

In an effort to help you avoid making decisions that could be hazardous to your financial health, we address six of the most common misbeliefs as they relate to credit and debt:

1. There is an easy way to fix bad credit. No person or company can legally remove accurate items from your report for a fee. The Fair Credit Reporting Act (FCRA) states that delinquent account information can remain on a consumer's credit bureau file for a seven-year timeframe that starts 180 days after the account becomes delinquent.
2. Bankruptcy discharges all debts. Debts not dischargeable in bankruptcy will generally include back taxes less than three years old, student loans, alimony, child support and debts incurred through fraud. To avoid foreclosure or repossession, you must ask the bankruptcy courts permission to "reaffirm" your mortgage loan and lease agreement and continue to make your home and auto lease payments. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 require a bankruptcy counseling certificate as a prerequisite for filing.
3. A collector can’t call others about your debts. It may be hard to swallow; however, according to the Fair Debt Collection Practices Act (FDCPA), your collector is permitted to contact other people. They are only supposed to do this to find out where you live, what your phone number is, and where you work. Fortunately, the collector may not divulge the reason for the call to anyone other than you or your attorney. Also, if you don’t tell them otherwise, they can call you at work.
4. A divorce decree matters to your creditors. Your divorce decree is an agreement between you and your spouse (not your creditors) on how your debts and assets will be divided. Since your creditors were not involved in the settlement and had no input on the results, the contracts you signed with your creditors have not changed and cannot be changed by the divorce decree. Whoever signed the original contract with the creditor will still be obligated to pay the debt after the divorce. That means you are still obligated on these debts and the creditors can report the derogatory status of these accounts on your credit bureau file.
5. Your creditors cannot change your interest rate. According to the CARD Act of 2009, credit card issuers can make key contract changes to the account terms and agreement, including rate increases, with 45 days' notice. You should also know that many creditors will now raise your interest rates if your credit score declines, even if you have paid their particular account on-time and as-agreed.
6. If your car gets repossessed, that’s the end of your responsibility. After a vehicle is repossessed, the lender will most likely sell it at auction to the highest bidder and apply the proceeds of the sale to the balance owed on the car. If the sale price is not sufficient to pay the balance due, there will be a “deficiency balance” remaining. You would be legally obligated to pay this deficiency balance. If you do not pay this balance, the creditor can possibly sue you in an effort to try to collect.

Fortunately, making financial decisions doesn’t have to be confusing. Visit our financial education section to learn more smart money moves.

The nonprofit Money Management International (MMI), the nation’s largest full-service credit counseling agency, announced today that it is working with the National Football League’s Player Engagement department to provide rookies, veterans and retired players access to important financial literacy programs and services designed to equip them to maximize their full financial potential at every stage of their career.

The tailored financial education program “Your Financial Game Plan” is part of Financial Solutions, MMI’s employer sponsored financial wellness program. The training offered through the program helps players take the necessary steps to understand their true net worth, assess their financial risk, live within a realistic budget and create smart financial goals.

“We are committed to offering our players the financial tools and resources they need to make smart financial decisions,” said James Thrash, player engagement manager for the NFL. “The objective of this program is to ensure players’ long-term financial stability throughout their football careers and beyond.”

In addition to the program designed for players entering the league, MMI is working with the NFL on additional programs to assist players who are transitioning into other areas of their career. These financial literacy workshops essentially provide education and advice on how to successfully live on a new budget, as well as how to make appropriate changes to investments to support their new lifestyle and life stage.

“We’re excited to work with the NFL to offer players appropriate financial education resources and a realistic perspective on the current economic environment,” said Maura Attardi, regional director of financial education for MMI. “Our in-person workshops provide an opportunity for players to develop short- and long-term financial goals, create a realistic monthly budget, and establish savings strategies to assist them both today and tomorrow.”  

Two new studies by the U.S. Department of Housing and Urban Development (HUD) illustrate the positive impact housing counseling has on consumers in two distinct situations: those who are considering buying a home and those who are struggling to stay in their home.

With moms, every moment can easily turn into a “teachable” moment. From day one, mothers begin the process of transferring their wisdom and values to their children. In fact, a recent NFCC study found that 44 percent of consumers named parents as their primary teachers of financial habits — the basics of spending and saving are learned at home long before they’re taught at school.

While the landmark $25 billion National Mortgage Settlement was just announced last month, scammers have wasted no time capitalizing on the vulnerability of desperate homeowners.

The settlement with the nation’s five largest mortgage servicers was signed by federal and state officials Feb. 9, and will provide assistance for homeowners in order to compensate for the faulty foreclosure practices offered by mortgage servicers following the housing market crash. Although real compensation is still months away, there have already been numerous reports of scam operations popping up across the country.

While the government has been cracking down on foreclosure scams, it is important for you to remain diligent in keeping your personal information safe. The following are some tips to help you identify and avoid falling victim to a foreclosure scam.

• Don’t panic. Mortgage scams are effective because the scammer is able to exploit the fear of a person who is in a desperate, vulnerable state. Don’t let fear cause you to make irrational decisions.
• Never act under pressure. Don’t sign a contract or disclose information before doing your research. You can always request to receive any information in writing.
• Trust your gut. If someone is offering you something that sounds too good to be true, it probably is.
• Stay informed. Make sure you obtain detailed information about your foreclosure deadlines. If you want to know if you qualify under the Settlement, contact your bank or loan servicer directly.
• Don’t release any personal financial information. If you are contacted by someone who claims to be from your financial institution and wants you to “confirm” or help them identify your personal account information, it is likely a scam. Rather than releasing information, ask for their contact information and tell them you’re going to call them back.
• There is no fee involved in the National Mortgage Settlement. If you are contacted in any way from someone asking for money in return for a speedy settlement payment, they are scamming you.

For more information about mortgage assistance relief scams, visit FTC.gov. If you have questions or concerns about your mortgage loan, consider meeting with a HUD-certified housing counselor to discuss your options.

Every New Year, shedding weight and debt is at the top of the list for millions of people resolving to change for the better. According to a recent Time magazine news report, these two are also among the most often broken resolutions.

While experts have offered numerous techniques and strategies for losing weight and paying down debt, the basic fundamental lifestyle change required to be successful at both is the same: Consume less. Financial stability begins with spending less than you make, followed by paying more on what you owe. Losing weight begins with consuming fewer calories, and becoming more active.

If you are among the millions vowing to finally achieve a healthy waistline and a healthy bottom line, consider the following five steps:

1. Make the commitment. When considering any major lifestyle adjustment, the first step is to decide – are you ready to make the commitment to do what it takes to improve your health and financial wellbeing? Are you ready to accept responsibility for changing your situation? Do you believe that you can and will change the way you make decisions about food and money? It isn’t until you can truthfully answer yes to these questions that you will be ready to face the challenges of creating a healthier physical and fiscal lifestyle.
2. Create a plan. Creating a budget and a meal plan starts with tracking – tracking expenses and tracking calories. Consider carrying a pocket notebook for noting every penny spent and calorie consumed. Review your results and look for areas where you should and can make cut backs.
3. Develop SMART goals. One of the most vital aspects to success in these areas is to set clear goals that are specific, measurable, achievable, trackable and rewarding. Remember to create short-term, or milestone, goals as well as a target accomplishment. If your ultimate goal is to become debt free, celebrate when you pay off 25 percent. The same goes with weight lost. If you aspire to lose 50 lbs., acknowledge ever five to 10-lb. loss as a huge accomplishment. Treat yourself to an occasional outing for a treat when you reached a short-term goal weight.
4. Eliminate temptations. Once you have a clear calorie and spending budget outlined, remove any obstacles that may hinder your success. Don’t carry your credit cards in your wallet and don’t keep high-calorie sweets in the house. Leave your cards at home in a safe place and only take them out when you have a planned purchase and a pay-off strategy. The same is true for food temptations. If you know you’re going to be in an environment where you’ll be tempted to indulge, prepare yourself by carrying a granola bar with you, or eat a light snack before you leave the house.
5. Stay flexible. Don’t get discouraged if you don’t see the pounds or debt melting away as quickly as you had hoped. Change doesn’t happen overnight; and there are no quick fixes. This is why it’s important to remain committed and flexible. If you aren’t meeting your goals, revisit and adjust your plans as often as necessary.

Remember, you’re only human and set-backs are inevitable. But if you’re truly committed to your goals, you can overcome anything.