Many people —including yours truly— work as consultants on a contract basis. Typically, this is a straightforward business arrangement. Consultant does the work, client pays as dictated by the signed contract.

But some clients aren’t always so forthcoming, which means it might be time for a visit to small claims court. The filing fee ($15-$150) depends upon your state and the amount you’re claiming in damages. Likewise, the dollar-amount limits for claims range between $2,500 and $25,000 depending upon the state in which you work and reside. Nevertheless, the process is typically the same.

When sequestration’s automatic budget cuts went into effect on March 1 of this year, many were unclear as to how these cuts would affect daily life and social programs. We were told that although the sequester would reduce the federal budget deficit by $1.2 trillion dollars over 10 years —as required by the Budget Control Act of 2011, which was enacted in part to resolve the debt-ceiling crisis— the cuts would not go into effect immediately.

Well, it’s two months later and few people seem to be talking about where these cuts are headed, so Wallet Blog did some investigation.

Going to school is a typical fallback position when you’ve lost a job. My dad always says, “Time spent pursuing education is never wasted.” And a few new initials after your name will make you more desirable once you’re back on the job market, right?

Maybe, maybe not.

My husband and I are typical of a lot of married Americans: we both have student loans and I lost my job last year. We realized pretty quickly that a $500 monthly student-loan payment simply would not jibe with our new one-income budget. That’s when we started investigating what to do next, because we have two small children and homelessness is not an option.

If you lose your job, the first call you should make, that very day, should be to your state’s Unemployment office. If you have a student loan repayment plan that is now outside your budget, the minute you’re done registering for an unemployment claim you should call your student-loan holder, to determine a new repayment option.

Hold on – is this the news, a dream, or some sort of Oscar Wilde-type satire?  That’s along the lines of what I was thinking last night while watching Anderson Cooper and Erin Burnett report a pair of stories seemingly straight out of The Twilight Zone or Ripley’s Believe it or Not.

I mean, could AIG actually be SUING the U.S. government (as well as you, me, and every other taxpayer by extension)?  Are U.S. politics really so flawed that rape is actually LEGAL in California if the victim is single and the perpetrator impersonates her boyfriend?

How can we fix arbitration?  That’s the question we posed last week after The Pew Charitable Trusts released a study that revealed how disturbingly prevalent mandatory arbitration clauses are in the fine print of checking account agreements.  The thing is, after exploring the issue a bit further and talking to some of the country’s foremost experts on arbitration and consumer disputes, a new question arose:  Is the arbitration process actually broken?

Don’t worry if you’re a little lost right now because a bit of background is certainly in order.

The idea has been floated more than once over the last few weeks:  How about we take all the money that candidates have spent on advertising time, polls, yard signs, and general campaigning and just use that to pay down the deficit?  While those who suggest this wacky plan do so knowing that it will never actually take effect, there is something to be said for directly allocating our money where we need it most and getting rid of those annoying ads that have dominated the airwaves of late.

This, of course, begs the question of exactly how much has been spent on major political campaigns and what it could fund if appropriated elsewhere.  It can be fun to dream, after all.

Consumers are often looking for ways to repair and improve their credit scores, and many seek the assistance of a credit repair company to handle the process. As the number of consumers looking for help increases, so does the number of fraudulent companies looking to take advantage of vulnerable individuals. In order to make sure that you only deal with a trusted and reputable company please take the following into consideration:

Common Sense Due Diligence: Just because a company has a website does not automatically make them a legitimate business. Many of these companies offering credit repair help are not even real businesses. Do a simple “who is” check on their website domain. If they are a legitimate company it will notate that the company owns the domain, and provide full contact information for the business including a phone number, email address and business address. Make sure that the information presented matches the information on the website. If the domain search reveals that the domain is registered private and there is no information available it is a huge red flag that you are not dealing with a real company. If the company were operating legally then why would they hide their information? Do you think companies such as Best Buy or Target hide their website registration information? Of course not! Why wouldn’t a company want potential customers to be able to track them down, unless of course they were hiding something?

Amidst all of Hurricane Sandy’s destruction, there is actually some good news when it comes to the housing market.  Foreclosures are down in more than 60% of the nation’s largest cities, according to RealtyTrac, and experts are pointing to that as a sign of stabilization in the housing market.

Not only did foreclosure rates fall by more than 25% in major cities such as San Francisco, Detroit, and Los Angeles during the third quarter of the year, but they actually dipped below 2007 levels for 58% of the country’s major metropolitan areas.  That’s undoubtedly good news for the economy in general and those of us who work in fields tied to the housing market, but things aren’t quite so peachy everywhere.

The tables, it seems, have turned.  We as consumers are all too familiar with being the subjects of debt collection efforts, and now it’s the debt collectors’ turn to face some scrutiny.  Not only has the controversial Patient Protection and Affordable Care Act (better known as Obamacare) implemented some new rules that require hospitals to curb unfair collection practices against patients if they want to receive their federal tax exemption, but the Consumer Financial Protection Bureau (CFPB) also published a rule yesterday giving itself the ability to oversee the nation’s largest debt collectors.

Roughly 30 million Americans have debt subject to collections, according to the CFPB, which estimates the average amount owed to be around $1,500.  These statistics are worrisome both because they speak to our country’s obsession with overspending and in light of the negative repercussions of severely delinquent debt.  You see, in addition to the inconvenience and stress of having debt collectors pester you, your debt burden will grow as interest continues to accrue, you’ll incur more and more credit score damage as delinquency increases, and you could eventually default and even get sued.  To complicate matters, debt collectors are notorious for misleading consumers, overstepping the law, and making mistakes that cost people like you and me a lot of money.

“The first time I got a check and I seen the chunk out of it … that’s when I found out about taxes, that’s when I found out about everything.”

The average consumer receives multiple monthly bills to pay for services, utilities, credit accounts, and other purchases. Knowing which bills to pay first might be challenging, but it’s certainly good to learn how to prioritize them. Remember, some bills might be for services that you can do without while others could mean losing important things like healthcare coverage, a home, or your car.

In case of a financial emergency, paying the right bills can save you time and money. By learning how to prioritize, you’ll be better prepared for times when money is tight.

The Republican National Convention is now behind us and the Democratic version is set to conclude Thursday, and while this might have you thinking there will be an entertainment void in the coming weeks, the truth is that the real fun starts when these idealistic celebrations are in the rear-view mirror.  I’m referring to the beginning of the debate season (though I would have accepted the start of the NFL regular season as well), when we can hear the candidates mix it up and offer retorts to each other’s grandiose claims.

The debates usually give ordinary citizens like you and me a chance to ask the candidates questions as well, and one question that I’m sure a lot of people would like answered is what will become of the mortgage forgiveness tax break that has helped lower the financial burden on so many people since 2007.

Financial literacy in the United States is clearly lacking right now, and what are our institutions of higher learning doing about it? Setting a terrible example and bleeding their most financially vulnerable students of much needed aid money, that’s all.

Don’t believe me? A new report from the US Public Interest Research Group (PIRG) confirms the dirty practice. The report, titled The Campus Debit Card Trap, revealed that while the federal government has long mailed students financial aid checks, nearly 900 colleges and universities have struck affinity partnerships with financial institutions in order to tie campus records to bank accounts, effectively turn student IDs into debit cards, and disperse aid to more than 9 million students through these cards. This might sound great in theory, but a closer looks reveals significant drawbacks to the supposed convenience the new system offers.

When you were in school, did you ever have one of those dreams where you slept through an exam or woke up one day to find that you’d been registered for a class all semester, yet had done none of the work and were bound to fail? Well, the personal finance equivalent recently befell me, only it wasn’t a dream.

I discovered that for 18 months my bank had been charging me interest for a checking account overdraft I was unaware of, and as a result, I had already paid more than $150 in interest. Now, it’s important to note that I am not writing this because I have an axe to grind (the charges were eventually waived), but rather to enlighten others who may fall victim to the same sneaky practices.

With the holiday season in the rearview mirror, we are all getting back into our normal routines. Unfortunately, that means starting to think about tax season 2012. April is right around the corner, after all, and if you foresee an inability to pay your full tax bill in full, this can be quite disconcerting. To help ease concerns, the California Society of CPAs recently announced some important strategies for dealing with the Internal Revenue Service (IRS) if you cannot cover your total tax toll.

Before we get to them, however, there are a few things that you need to know about the IRS, its practices, and the terminology you can expect to come across when dealing with an inability to pay:

In a previous article, I made the case that usury laws are counter-productive. Usury laws, which cap interest rates for lenders, completely fail to serve their intended purpose of forcing banks to deliver affordable loans and instead result in the declining availability of loans for anyone whose credit history merits an interest rate above an arbitrary cap. While this is still true for regular interest rates, I would like to suggest one particular feature of our contemporary lending industry that could actually benefit from usury laws: Penalty rates.

Why? Because penalty (or default) rates on loans and credit cards currently dictate the order in which consumers repay their debt obligations during times of crisis and invite banks to engage in reverse competition over who can charge the highest interest rates.

There are millions of people across the United States who have to deal with the constant problem of not having enough money to pay their bills. They may have debt from student loans, credit cards, mortgage, cars and many other types of debt. However, when it comes down to it, the debt needs to be paid or the company that holds the debt will continue to hound you for a long time to come and your credit score could be severely damaged. That much you know, but what can you do about it?

For some, debt consolidation may be the answer. A first step in debt consolidation is to figure out exactly how much debt you have. Take a look at all of your debt. This means car loans, home loans, boat loans, RV loans, credit cards, gas cards, store cards, home equity loans and student debt. You may even have additional types of debt that do not apply to these categories. Check it out ASAP! You want to be sure that you are covered in case you end up having to pay the debt back.

American consumers paid down 26% less credit card debt during the first quarter of 2011 than they did in the same period last year, according to a recent credit card debt study conducted by Card Hub – a fact which portends a significant rise in debt throughout the remainder of the year as well as the possibility of dangerous consumer overleveraging.

While one might consider any debt pay down to be a positive one, context is needed to explain why the Q1 2011 data is so concerning. During the first quarter of each year, consumers inevitably pay down a portion of their debt thanks to holiday bonuses, tax returns and a desire to rid themselves of balances remaining from holiday shopping. It’s normal.

Anyone who has ever been in credit card debt knows just how burdensome it can be. Debt seemingly pervades your entire life, limiting your disposable income, causing stress, and potentially dragging down your credit score. If debt is mishandled, not only will these effects be magnified, but the possibility of a lawsuit will arise as well. As a result, it’s no surprise that indebted consumers are typically desperate for a solution. They want to stop hemorrhaging money on interest, and most importantly, they want to have one less worry on their minds.

A debt settlement—agreeing to payoff your defaulted debt with a lump-sum payment that is less than what you actually owe—can therefore seem like an extremely attractive option for consumers who are in serious financial trouble. However, in jumping at such an opportunity, many people fail to fully consider the overall pros and cons and ultimately benefit less than they initially imagined they would.

Back in 2009, Wallet Blog broke the story that Chase had reneged on a promise it made to certain customers not to increase the interest rates on balances transferred to the company’s credit cards. While Chase did not increase interest rates per se, the company did begin assessing $10 monthly fees that increased the cost of consumer debt nonetheless. Working together with the New York Times, Wallet Blog made the story national news, causing then-New York Attorney General Andrew Cuomo to threaten legal intervention against the financial giant. As a result, Chase repealed the monthly fees and even provided refunds to the customers it had already charged.

Such actions were taken because, from a regulatory standpoint, there is no practical difference between interest rates and fees. Both are considered finance charges. In its Federal Truth in Lending Act (Regulation Z), the Federal Deposit Insurance Corporation defines finance charges as:

There has recently been a great deal of talk about rules proposed by the Federal Reserve that seek to require credit card companies to consider the merits of applicants based on individual rather than household income. These rules, critics contend, stand to significantly affect stay-at-home mothers by preventing them from establishing credit history in their own names, which would be extremely important to garnering a loan, renting or buying a property, and/or landing a job in the case of divorce or the death of a spouse.

Given that 2010 Census figures show men to be the sole breadwinners in 28.2% of couples with children under the age of 18 and women to be the only earners in about 4% of such families, roughly 7.3 million women and 963,000 men would face a difficult time garnering access to credit if the claims made by the rules’ detractors prove to have merit.

Two common complaints about the new credit card law, which celebrated its one-year anniversary on Feb. 22, 2011, are that it led to the extinction of 0% balance transfer credit cards with no fee and that it caused increased interest rates. One of these complaints is rooted in fact, but neither serves as a valid criticism of the law.

Yes, the CARD Act’s passage effectively signaled the beginning of the end for credit cards that offered 0% APR on balance transfers and had no fee for the service. However, no one really has the right to complain about this.

Your credit score is important. You’ve heard it a thousand times, from your parents, financial advisors, TV advertisements, and seemingly everyone in between. They are, of course, correct. Your credit score impacts how much you will pay for a credit card, mortgage, or any number of loans. Many things affect your credit score, but there are also numerous factors that play no role in how this all-important number is computed. Here are twelve things that you don’t need to worry about when it comes to establishing a good credit score.

Anything not in your credit report - There is a wide range of information in your credit report, including payment history, level of indebtedness, length of credit history, and types of credit used. Your credit score won’t take into account anything outside of the credit report.

Debt collectors make their money by successfully getting you to pay your debt, often with threats that are not even allowed by law. If you find yourself in a situation where debt collectors are hounding you, it’s important to know the rules that govern their conduct in order to deal with them effectively.

The Fair Debt Collection Practices Act determines the rules for many kinds of collections efforts including dishonored checks, rent, medical bills, utility bills, insurance bills and claims, student loans, credit cards, condo fees, attorney’s fees, judgments, and other personal debts.