Everyone comes to a point in their life where they need to make informed financial decisions. One decision that requires you to be VERY INFORMED is the decision to borrow money.
 How much do I borrow? (the least amount that is necessary)
 What is the interest rate?
 What are the terms? The payment amount and length of repayment?

Television and Internet advertising from companies offering you a loan that has few qualifying requirements, and requires no collateral, sounds too good to be true. If you do not pay attention to the numbers, you may believe that you have just hit the jackpot and found a lifetime source for your loans. Let us review detail from some actual loan documents:

Amount Financed Terms Finance Charge APR Total
Over length of Loan Repayment
 $  2,525.00   48 months  $   11,529.12 138.12%  $   14,054.12
$ 292.79/month
 $  9,925.00   84 months  $    53,170.94 89.68%  $   63,095.94

You tell me, did these people hit the jackpot? These loan transactions may be legal but that does not make them any easier to swallow. How bad do you need money to fall prey to the companies that will provide it to you for a “slightly higher than normal fee”? Even if, after careful consideration, you determined that you needed to use these companies, you can still control some of your outcome.

Let us use the $9925.00 loan as an example. I have listed some options below:

Amount   Financed Terms Finance Charge APR Total
Over length of Loan Repayment
 $  9,925.00     36 months  $18,932.12 89.68%  $ 28,857.24
 $  9,925.00      48 months  $26,833.88 89.68%  $ 36,758.88
 $  9,925.00     60 months  $35,175.93 89.68%  $ 45,100.80

As you can see, if a person is willing to accept a slightly larger monthly payment, even a loan at 89.68% can be made easier to swallow. How bad do you need the money? Only you can answer that question but be sure to consider all of the options before making a decision.


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What Does Your Credit Report Say About You?

What Does Your Credit
Report Say About You?


In the 1970s, the Fair
Credit Reporting Act played an important role in shaping the credit reporting agencies,
as we know them today.  They focus their
reports on verifiable credit information – both positive and negative
information about a consumer’s ability to pay their debts on time on a
consistent basis.

What Does Your Report Contain?


Personal Information:  Compiled
from credit applications that you have filled out.  (name, address- past and current, Social
Security number, date of birth, current and previous employers).

Credit History:  details about the accounts that
are in your name or that list you as an authorized user are included in the
report.  In addition, details such as
date accounts were opened, credit limit, payment terms, balance and payment
history are included.  Closed or inactive
accounts may stay on your report for 7-10 years from the date of their last
activity, depending on whether the account was paid on time or not.

Inquiries:  each time a lender, landlord, insurer, or
service provider views your credit file, the credit reporting agencies record
that inquiry.  Inquiries remain on your
credit report for two years.

Public records:  liens, bankruptcies, overdue
child support, judgments, garnishments, and foreclosures are considered public
records.  Most public record information
stays on your credit report for 7 years.

What Information is NOT on your credit

Your credit report does not
contain information about your checking or savings accounts, bankruptcies that
are more than 10 years old, charged-off or debts placed for collection that are
more than 7 years old, gender, ethnicity, religion, political affiliation,
medical history or criminal record.  Your
credit score is generated by information contained in the credit report, but is
not part of the report itself.

Who Can Look At Your Credit Report?


Potential lenders,
landlords, insurance companies, employers, or potential employers (with your
consent), companies that you allow to monitor your accounts for identity theft,
state or local child support enforcement agencies, any government agency or
someone that has your written authorization to obtain your credit report.  The credit-reporting agency must determine
that the person or company viewing your report has a permissible purpose to do

What If I Discover An Error On My
Credit Report?

You have a right to dispute
any information that is in your report.  You
will find the directions for disputing information on your credit report on the
internet or they will be part of your report when you order your free copy at  You can also call 877-322-8228 or write to Box 105281, Atlanta,
GA 30348.

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How Does Divorce Affect Your Credit Rating?


A married couple may think
that they have one credit file but that is incorrect.  Each individual has their own credit file
containing information about accounts or credit events that are linked to their
name.  Many married couples combine their
income when applying for credit.  The
creditor then considers each individual to be 100% liable for the contract they
agreed to.  In these situations, the
credit reference will show up on both individual files.

Who is Responsible?

If two people signed on the
credit transaction, both are 100% liable for the debt until the balance has
been paid in full.  The fact that the
Judge may award that debt to one person or the other does not change the fact
that both are 100% liable.  If payments
are missed, the late payments will show up on both credit reports.

What if I did not sign for the debt,
can I still be held liable?


Wisconsinhas a marital property law.  This law makes each spouse liable for debt
that is taken out in the interest of his or her marriage or family.  It is possible for one person in the marriage to take out the debt, yet both parties will be held responsible for its repayment.  When a transaction is taken
out by only one person, the creditor is supposed to send out a marital property
letter to the non-signing spouse, advising them that they will be held liable
for the debt.  Issuance of that letter
may make the non-signing spouse liable for a debt that they did not agree
to.  This can be a very sticky situation
and it is best to consult with your attorney about any debts that you did not
knowingly agree to.


How do I protect my finances before the

Most marriages have one
partner who takes responsibility for the finances.  Although this can be convenient, it can place
the other partner at a disadvantage upon separation or divorce.

1)    You need to be aware of all the accounts that you are
responsible for including:  bank
accounts, mortgages, credit cards, utility and medical bills.

2)    Dissolve all joint accounts as soon as you can.  Cancel your accounts together legally.  Start with your joint checking and savings
accounts.  If you have both signed on the
car loan you may have to refinance the loan to remove your spouse’s name.  Any bills that you pay together, such as
utilities, put in just one name.  As for
credit cards, try to work with the credit card company to transfer 50% of the
debt on to two separate cards.

3)    Sell the house immediately unless one spouse is able
to refinance the mortgage in their name alone.
If you do not sell, and one spouse takes over the mortgage, later
defaulting, the foreclosure will show up on both credit files.  This will affect the ability of both spouses
to obtain a mortgage in their own name.
If you sell right away, you can split the profits and walk away without
any further liability.

4)    Document everything that you do.  If questions arise later, you will have the
proof that you need to help rectify the problem.

5)    Review your credit file and credit scores.  Make sure that all of the information that is
being reported about you is correct.
Take action to clear up any delinquent accounts as quickly as
provides a free credit report from each of the three credit reporting agencies.

6)    Notify your doctor’s office that you are no longer
liable for your spouse’s medical debts.

Divorce is a stressful
time.  If you would like help in creating
a budget or making sense of your credit report give us a call.  Many times, we were not taught how to handle
our money at school or at home.  It is
never too late to start to organize your finances.  Education is a big part of what we do at GAP
Financial Services.  You can reach us at

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Why Estate Planning?

The main
goal of estate planning is to safeguard your loved ones after you’re gone, and
to protect yourself if you’re incapacitated during your lifetime.  There are 5 legal documents that you will


1)     A Will.  This document explains how you want your
assets distributed after you die.  If you
don’t have one, State law makes the decision for you.  You will also name a guardian for your children.  For more information go to:


2)     A Durable Power of Attorney.  This document names
a trusted person or institution to handle your finances if you are
incapacitated.  If you were in the
hospital, the person you choose has legal authority to write checks on your bank
accounts, etc.  You can revoke this
document at any time.  If you do not, it
is valid until you die.  A power of
attorney that isn’t durable expires if you become legally incompetent – exactly
when you want it to work.


3)     A Health Care Proxy.  This document gives someone you
trust the legal right to make medical decisions on your behalf if you can’t
speak for yourself.


4)     A Living Will.  This describes the medical treatments you
want and don’t want if you are unable to make decisions.  An example would be that you may choose to
not be kept alive by artificial means.


5)     Copies of Beneficiary Designations.  These are
your records of any retirement accounts and the forms you filed with your IRA
provider and the administrator of your employer sponsored retirement plans such
as 401 (k), 403 (b) and 457s.  These
forms are very important – They – NOT
– determine who gets your accounts when you die.  If you don’t have copies, ask your account
custodian or plan administrator to send you a copy.


6)     A Trust.  This is something you may or may not need –
depending on circumstances.  Different
types of trusts can help you leave money to a minor, disabled child, or
grandchild, or to provide a lifetime income to a surviving spouse or children
from a prior marriage.


planning documents are typically prepared as a package by an attorney who
specializes in estate law.  Check the
Martindale-Hubble Law Directory at
– it covers all legal specialties and provides basic information to attorneys’
websites.  You can also ask friends or
family for recommendations in searching for an attorney.  Lastly, you can contact your local bar
association for referrals.

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It can be expensive to violate the rights of debtors!

Fair Debt Collection Practices Act

The Federal Trade Commission is there to protect consumers.  Recently one of the country’s largest debt collectors agreed to pay a record $1 million civil penalty to settle charges of violating the Fair Debt Collection Practices Act.  Nationwide Credit, Inc., of Atlanta, Georgia, has agreed to pay a $1 million civil penalty, the largest amount ever in a debt collection case.  According to the FTC, Nationwide’s debt collectors harassed consumers, made false and misleading representations, failed to send required validation notices, failed to verify debts when requested to do so by consumers, and made impermissible third party contacts regarding consumers’ debts.

The settlement includes a comprehensive consumer complaint and resolution program which was developed by Nationwide’s new management and owners.  “Under the new program, every consumer complaint about collection practices must be thoroughly investigated and responded to – I expect the new program to set the standard for handling consumer complaints in the debt collection industry,” said Jodie Bernstein, Director of the FTC’s Bureau of Consumer Protection.

The Fair Debt Collection Practices Act prohibits abusive, deceptive and unfair debt collection practices.  For example, debt collectors cannot make false statements, threaten to take legal action they know they cannot or do not intend to take, use profanities or obscenities, call consumers at work if they know it is inconvenient or that such calls are not allowed by the employer, or call consumers at other times they know to be inconvenient to the consumer – such as before 8:00 a.m. or after 9:00 p.m.

Remember that you do have rights.  If someone is violating those rights when they contact you to collect a debt you can report them to the FTC.  Their website is:  You can also write to them at the FTC’s Consumer Response
Center, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C.  20580.  Their phone number is:  (202) 382-4357.  Make sure you have the date and time, person’s name, and specific violation when you contact the FTC to report the situation.

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How to Prevent Identity Theft

How to Prevent ID Theft

One way to protect your identity is to check your credit report periodically.  It is free to pull a credit report – you can get 1 free report from each of the 3 credit reporting agencies once during each 12 month period.  Make sure you use  or call (877) 322-8228.  Some websites advertise a free credit report but then try to sell you a monthly credit monitoring service.  This website will not charge you any fee.  Look over the credit report and make sure there are no errors.   Stagger when you pull the credit report so that you can monitor your report throughout the year. 

Securing your mailbox is another way to protect your identity.  Do not leave outgoing mail in the mailbox that someone could steal and get your personal information.  Make sure you shred any mail you have received that has your name and any identifying information on it.  Having a mailbox that is locked is another way to protect your mail.  Get your mail as soon as possible each day – don’t let it sit in the box all day or over the weekend.  Ask a neighbor to bring in your mail if you will be gone for the day or weekend.

Don’t carry your social security card with you.  Protect your bank account numbers and ATM receipts – often times ATM receipts are dropped at the bank and laying on the ground for thieves to pick up.  If someone does get a hold of your credit card or checks contact all three credit bureaus and ask them to issue a fraud alert.  Contact the local police department, Social Security Administration, and all creditors you have accounts with. 

Credit Bureaus:

Equifax:  800-525-6285

Experian:  888-397-3742

Transunion:  800-680-7289

SSA Fraud Hotline:  800-269-0271

You can ask the credit reporting agencies to flag your account and you can add a victim’s statement saying that your ID was stolen and ask that they call you to verify any credit applications.  Make sure to check your credit report and look for items you don’t recognize.  Notify the Federal Trade Commission which keeps a database of identity theft:  (888) FTC-Help, FTC, CRC-49, Washington D.C. 20580.

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Renters Insurance – Is it necessary?

Renters Insurance – Is it necessary?


Regardless of whether you rent or own, insurance protects you and your belongings.  Although your apartment owner is responsible for damage to the building, replacing your possessions is your responsibility.

In addition to your belongings, renters insurance can reduce or eliminate additional accident related costs.  If a guest is injured in your apartment and needs medical attention, you may be liable.  By going without insurance you are putting yourself at risk.  Ask your car insurance carrier for quotes on renters insurance.  It is not very expensive to get the coverage you need to protect yourself and your possessions.

Here are some things that renters insurance will protect your personal property against:

–Fire or lightning

–Windstorm or hail

–Smoke damage

–Glass breakage

–Vandalism & malicious mischief


–Weight of ice, snow or sleet

–Water damage due to rupture or overflow of household appliances or plumbing,

heating or cooling systems

–Freezing of plumbing

Your policy can also cover you:

–For costs associated with defending you in a lawsuit related to an injury or

property damage

–If you are held legally responsible for fire damage to your apartment, to the

building where you live, or vacation property you rent

–If your credit cards, ATM cards, or checks are stolen or used without your


Accidents happen – by having renters insurance you are protecting yourself and your possessions. You also have protection for anyone who is accidentally injured while in your home, or their property, if it is damaged by you, your children, or your pets.  Taking a couple of minutes to obtain a quote for Renter’s Insurance, and then purchasing a policy, may save you thousands of dollars for losses that are never planned for.

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