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Solve Your Money TroublesStrategies to Get Out of Debt and Stay That Way
- Product Details
- stop debt collector harassment cold
- negotiate down your debt with creditors
- manage your student loan payments, and
- create a healthy financial plan that you can live with.
- Worksheet 1: Monthly Income
- Worksheet 2: Your Debts
- Worksheet 3: Property Checklist
- Worksheet 4: Property Exemptions
- Worksheet 5: Daily Expenses
- Worksheet 6: Monthly Budget
- About the Author
- Table of Contents
- How Much Do You Earn?
- How Much Do You Owe?
- Figure Out Where Your Money Goes
- Make a Spending Plan
- Create Good Spending Habits and Avoid Financial Pitfalls
- Secured and Unsecured Debts
- High-Priority Debts
- Medium-Priority Debts
- Low-Priority Debts
- Review Your Worksheets
- Reduce Your Expenses
- Increase Your Income
- Get Some of Your Tax Refund Early
- Get Your Tax Refund Fast
- Sell a Major Asset
- Sell Smaller Items
- Withdraw Money From a Tax-Deferred Account
- Apply for Government and Agency Help
- Consider a Home Equity Loan
- Use the Equity in Your Home If You Are 62 or Older
- Borrow the Money
- What to Avoid When You Need Money
- Prepare a Negotiating Plan
- Communicate With Your Creditors
- Tips for Negotiating With Creditors
- Rent Payments
- Mortgage Payments
- Utility and Phone Bills
- Car Payments
- Secured Loan Payments
- Insurance Payments
- Medical, Legal, and Other Service Bills
- Child Support and Alimony Payments
- Income Taxes
- Student Loan Payments
- Credit Card Payments
- Negotiating When the Creditor Has a Judgment Against You
- Pay Off a Debt for Less Than the Full Amount
- Don’t Write Postdated Checks
- Beware of the IRS If You Settle a Debt
- Eviction
- Repossession
- Tying Up Property Before a Lawsuit
- Lawsuits
- Seizing Other Assets
- Liens on Your Property
- Jail
- Bank Setoff
- Intercepting Your Tax Refund
- Loss of Insurance Coverage
- Loss of Utility Service
- Foreclosure
- Nonjudicial Foreclosure
- Judicial Foreclosures
- Right to Cure Default
- Right of Redemption
- The Sale
- Defenses to Foreclosure
- Watch Out for Deficiency Balances
- Alternatives to Foreclosure
- Federal Programs for Homeowners Facing Possible Foreclosure
- Other Loss Mitigation Options
- Refinancing
- Selling Your House
- Short Sales and Deeds in Lieu of Foreclosure
- Finding Other Programs to Help Homeowners
- Creditor or Debt Collector?
- Negotiating Secured Debts
- Before Your Debt Is Sent to a Debt Collector
- When Your Debt Is Sent to a Debt Collector
- Illegal Debt Collection Practices
- How to Fight Back If a Debt Collector Violates the Law
- Credit Disclosures
- Common Terms in Credit Agreements
- What Kind of Loan Do You Have?
- Figuring Out Who Holds or Services Your Student Loan
- Canceling Your Loan
- Postponing Payments
- Changing Your Repayment Plan
- Getting Out of Default
- Filing for Bankruptcy When You Can’t Pay
- Consequences of Ignoring Student Loan Debt
- Private Student Loans
- How a Lawsuit Begins
- Negotiate a Deal
- Alternative Dispute Resolution
- Defenses and Claims
- What to Expect While the Case Is in Court
- When the Creditor Gets a Judgment Against You
- How Creditors Collect Judgements
- How to Stop Judgment Collection Efforts
- Chapter 7 Bankruptcy
- Chapter 13 Bankruptcy
- The Automatic Stay
- Bankruptcy Exemptions
- Will Bankruptcy Solve Your Debt Problems?
- Getting Help With Bankruptcy
- Property Subject to Collection
- Types of Exemptions
- Is Your Property Exempt?
- Claiming Exemptions
- Credit Scores and Credit Reports. What’s the Difference?
- Credit Reports
- Cleaning Up Your Credit Reports
- Your Credit Scores
- Rebuilding Credit Without Getting New Credit
- Rebuilding Credit by Getting New Credit
- Don’t Use a Credit Repair Organization
- Avoiding Credit Card Traps
- Consumer Credit Card Rights
- Use Credit Card Disclosure Forms to Identify Traps
- Trouble Paying Your Bill
- Should You Get Rid of Unnecessary Credit Cards?
- How to Close a Credit Card Account
- Shopping for a New Card
- Using Credit Cards Wisely
- Cards You Didn’t Request
- Rejected and Blocked Cards
- Liability If Your Credit Card is Lost or Stolen
- Unauthorized Use of Your Card by an Acquaintance
- To Dispute a Credit Card Bill
- Debit Cards
- Prepaid Cards
- Looking Up the Law
- Lawyers
- Debt and Credit Counseling Agencies
- Appendix A: Where to Complain
- Appendix B: Contact Information for Useful Agencies, Organizations, and Other Entities
- Appendix C: Worksheets Available on the Nolo Website
- Sample Chapter
- Are your credit cards charged to the maximum?
- Do you use one credit card to pay another?
- Are you making minimum payments while continuing to charge?
- Do you skip paying certain bills each month?
- Have creditors closed any of your accounts?
- Have you taken out a debt consolidation loan or are you considering doing so?
- Have you borrowed money or used your credit cards to pay for groceries, utilities, or other necessities for reasons other than convenience or to get perks on a credit card?
- Are debt collectors calling or writing you?
Conquering overwhelming debt starts with understanding your options. Solve Your Money Troubles gives you the tools you need to get your finances back on track. Learn how to:
Solve Your Money Troubles helps you handle the big issues, too. Find out how to stop a wage garnishment from leaving you penniless, get your car back after a repossession, and prevent foreclosure by applying for a loss mitigation program. You’ll also learn how to respond to an action if you get sued and decide if it’s time to wipe the slate clean by filing for bankruptcy.
In addition to up-to-date legal information, you’ll find practical tools, such as sample creditor letters and budgeting worksheets.
“This book is a must-have, even for people who don’t have debt problems.”—Los Angeles Times
“One of the best books you can buy on all aspects of personal debt.”—Michael Pellecchia, Nationally Syndicated Columnist
These forms are available online for downloading. After purchase, you'll find the link in Appendix C.
Your Legal Companion to Solving Your Money Troubles
1. How Much Do You Owe?
2. Create a Budget and Control Spending
3. Prioritizing Your Debts
4. Finding Money to Pay Your Debts
5. Negotiating With Your Creditors
6. What to Expect When You Can’t Pay Your Debts
7. Reducing Mortgage Payments and Dealing With Foreclosure
8. Dealing With Debt Collectors
9. Understanding Loan and Other Credit Documents
10. Student Loans
11. Lawsuits and Collection of Judgements
12. Bankruptcy: The Ultimate Weapon
13. Property Creditors Can’t Take
14. Rebuilding Your Credit
15. Choosing and Managing Credit Cards
16. Help Beyond This Book
Glossary
Appendixes
Index
Chapter 1: How Much Do You Owe?
To successfully plan strategies with your creditors, you need to come to terms with how much you owe.
Developing a realistic financial picture is an important step—even if you find this uncomfortable—because precise numbers allow you to prioritize your debts and decide the best way to solve your money troubles.
You’ll start by comparing how much you earn each month to your monthly expenses for food, housing, utilities, credit cards, and student loans.
You can determine how much you earn and what you owe by following the instructions on the next pages and using the online worksheets. If you’re married or pay bills with someone, you’ll want to fill out the worksheets together. (If you become anxious when determining your total debt burden, consider returning to this chapter later.)
| Warning Signs of Debt Trouble |
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A quick way to get an overview of your financial situation is by asking yourself the questions below. A “yes” answer will verify what you already know—that you’re likely in trouble and it’s time to make strategic changes. |
WORKSHEETS
The worksheets mentioned throughout this book are available for download from this book’s companion page. See Appendix C for the link.
How Much Do You Earn?
The first online worksheet—Worksheet 1— helps you determine how much income you make each month. Before beginning, gather a calculator and your paycheck advices, unemployment stubs, and other earning statements. Once finished, you’ll be ready to enter the monthly amount from each source.
If you’re paid more often than monthly, use the instructions on Worksheet 1 to convert your earnings to a monthly amount. If you have income that doesn’t fit into one of the categories, list it as “other.”
How Much Do You Owe?
The next step is listing your debts on Worksheet 2. Prepare by gathering all your bills, monthly statements, payment books, and anything else showing your monthly obligations and the total amount you owe. Don’t forget past-due notices. They often include added interest and fees, and it’s essential to be as thorough as possible. Once finished, Worksheet 2 will reveal how far behind you are on your debts and how much you must pay each month to remain current. Here’s how to fill it out.
Column 1: Debts and other monthly living expenses. Enter each debt once. For example, if you listed child support as a paycheck deduction on Worksheet 1, don’t list it again here.
If you’re married, you might not know which debts are yours and which belong to your spouse. If your marriage is intact and you have joint financial problems, enter all obligations in Column 1. (If you’re separated or divorcing, consider consulting a family law attorney to determine which debts you’re obligated to pay.) If you share a household with someone else, combining incomes and paying all debts with joint funds can be advantageous (although sometimes this can cause more problems). Enter both partners’ debts in Column 1.
Column 2: Outstanding balance. In Column 2, enter the entire outstanding debt balance. For example, if you borrowed $350,000 for a mortgage and still owe $125,000, enter $125,000. Your latest account statement should list your outstanding debt balance. If not, the creditor’s automated phone system or online account information will provide the necessary information. Use your best guess if you can’t get the balance and prefer not to talk to the creditor.
Columns 3 and 4: Monthly payment and total past due amount. In Columns 3 and 4, enter the amount currently owed on the debt. If the lender hasn’t established set monthly payments—for example, for a doctor’s bill— enter the entire balance due in Column 4 and leave Column 3 blank. For debts you regularly pay—like a car loan or mortgage— enter the monthly payment in Column 3 and the past-due amount (missed monthly payments plus added fees) in Column 4.
For credit cards, department stores, and similar debts, enter the monthly minimum payment in Column 3 and your entire balance in Column 4. But keep in mind that you’ll want to make more than the minimum payments on your credit cards in the future. (Chapter 9 discusses the danger of paying only the monthly amount required.)
Column 5: Is the debt secured? In Column 5, indicate whether the debt is secured or un- secured. A secured debt is one for which a specific item of property (called “collateral” or “security”) guarantees payment. The most common type of secured debt occurs when you sign a credit or security agreement allowing the creditor to take property under certain conditions without suing you. For example, it’s common for a mortgage or auto lender to be able to take your car or home if you don’t make payments or maintain property insurance. These are both secured debts. Security interests might also apply when you buy a large appliance, furniture, jewelry, or a computer with store credit.
However, a creditor doesn’t always need your permission to secure a debt. A creditor can secure its debt without your agreement by filing a lien against your property in several circumstances. First, the creditor can file a lien if the law allows it. You’d find the requirements listed for this type of lien in a statute. For instance, a mechanic’s lien lets a worker or material supplier file a lien against your real property if you or the contractor fail to pay. Second, a creditor can file a judgment lien against your property after suing you and obtaining a money judgment for the amount you owe.
Unsecured debts aren’t guaranteed by collateral a lender can take if you fail to pay. This type of debt includes bank credit card balances; bills owed for utilities, medical, or legal services; student loans; and spousal or child support.
You’ll want to list the collateral the creditor is entitled to take if you default on the debt—usually the property you purchased with the loan. Because the secured creditor can often take the collateral property with- out filing a lawsuit, secured debts typically have a high payment priority. If you want to keep the property, make the payment. (After reading more about secured debts in Chapter 3, you can come back and review whether you need to make changes to Column 5.)
Column 6: What priority is the debt? Leave Column 6 blank until you read Chapter 3. It will help you determine which debts are more important to pay than others.
When you’ve entered all your debts in the worksheet, total up Columns 2, 3, and 4. Column 2 represents the total balance of all your debts, even those not due now. Column 3 represents your monthly payments, and Column 4 is the amount you need to get current on all your debts.
RELATED TOPICS
Don’t forget your other expenses. None of us have monthly expenses consisting entirely of loan or credit payments. We also have to pay rent and buy groceries, pay for movies and restaurants, buy clothing and household goods, and so on. Chapter 2 covers these expenses, but now might be a good time to review that information. Listing monthly living expenses will give you a complete picture of your finances and help you determine how much you have left to repay debts.
We hope you enjoyed this sample. The complete book is available for sale here at Nolo.com.
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