It is important to keep your credit score high. A good credit score can earn you low mortgage and refinancing rates, more negotiating power and increased credit limits. But even financial behaviors that do not directly affect your credit score can be a red flag that you are headed towards serious financial problems.
Here are five red flags that will not show up on your credit report:
1.)Taking out payday loans. Resist the urge to take out a payday loan. This can be toxic to your finances and a red flag that you are off track financially. You should resist the temptation no matter how tough your situation seems because the high interest rates and payment terms typically put people even further in debt.
2.) Fighting with your spouse about money. People often ignore this sign because they think it is a sign of marital issues, not financial issues. But arguing about money typically means that you are not on the same page with your spouse on financial issues. The deeper you get into financial trouble, the more people find themselves fighting with their spouse about how to spend money and how to get out of debt.
3.) Paying household bills with your home equity loan or line of credit. While paying your household bills with home equity money will not show up on your credit report, it is typically a sign that you are running out of options to pay your bills. ‘Revolving debt is unsecured, so it is very risky to borrow against a secured loan, such as your mortgage.’
4.) Bouncing Checks. If you are routinely overdrawing your bank account or bouncing checks, then you are most likely either not able to manage your finances or are in serious debt. While bouncing checks does not directly show up on your credit report, overdrawn accounts can result in a negative check writing history report.
5.) Tapping into your retirement fund. In addition to the early withdrawal penalties, you are costing yourself the compound interest you would have earned by leaving the money in the account.
Click here to read more on the 5 warning signs that you could be headed toward financial hardship.
If you are in a financial crisis and are considering filing bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.
The term, ‘zombie home’ refers to a house where the owner has moved out and the lender has never finished the foreclosure paperwork, leaving the absent homeowner legally liable for the foreclosed property along with the property taxes, homeowner association fees, fines for building code violations, etc. 
Yes, your 401(K) is safe from bankruptcy. But it is only protected as long as it remains in your 401(K) account. Taking money out of your 401(k) or any retirement account prior to filing bankruptcy converts the funds from a protected to an unprotected asset, taking them from a retirement nest egg to money being used for daily expenses. Funds in checking accounts, savings accounts and other nonretirement investment accounts do not receive the same protections as retirement funds.
Thanks to the Credit Card Act of 2009, cardholders are getting hit with fewer penalty fees and surprise interest rate hikes. However, according to a recent news story, a sequel to the Credit Card Accountability, Responsibility and Disclosure Act of 2009 could be in the works as regulators sort through a fresh batch of complaints. Regulators at the Consumer Financial Protection Bureau collected the comments earlier this year about the post-CARD Act environment. The CFPB plans to issue a study in coming months that will look at the law’s impact on the availability of credit, and at how card issuers’ practices are affecting consumers.
In an increasing foreclosure trend, a number of homeowners are being taken to court by their lenders years after their houses were lost to foreclosure. Lenders are filing motions in old foreclosure lawsuits and hiring debt collectors to pursue leftover debt, plus court fees, attorneys’ fees and tens of thousands in interest that had been accruing for years. It’s all part of a legal process known as a “deficiency judgment,” which is allowed in 40 of 50 states- including Florida.