money and financial problems

Law about consumer financial problems

Account stated

Definition

A statement between a creditor and a debtor that settles the total amount of debt owed to the creditor. 

There are three elements of an account stated: (1) There exists prior transactions between the parties, creating a creditor-debtor relationship; (2) An agreement, express or implied, between the parties as to the total amount due; and (3) A promise by the debtor, express or implied, to repay the amount due.

See 1 Am. Jur. 2d Accounts & Accounting section 26 (West 2007).

Abuse

Definition

1) Abuse, generally: physically, sexually, or mentally injuring a person.

2) Child abuse: physically, sexually, or mentally injuring a child either with intent or through neglect.

3) Substance abuse: excessively using or misusing a legal or illegal substance.

4) In bankruptcy: filing under chapter 7 by a debtor whose monthly, disposable income exceeds $10,950 or 25% of his or her non-priority unsecured debt (if at least $6,575) for a five-year period is presumptively abusive, requiring dismissal or conversion to chapter 13.

 

Reverse mortgage

A loan given to homeowners in exchange for equity in their homes.  The loan does not have to be repaid until the homeowner dies, sells the house, or moves.  Under the FHA's reverse mortgage program, homeowners must be at least 62 years of age, own the property completely or have only a small mortgage, and meet various other conditions to qualify. 

Reverse Mortgages for Seniors (U.S. Department of Housing & Urban Development)

http://www.hud.gov/offices/hsg/sfh/hecm/hecmabou.cfm

401(k)

Definition

A type of savings account made possible by federal law.  By creating a financial plan under 26 U.S.C. 401(k), employers can help their workers save for retirement while reducing taxable income.  Workers can choose to deposit part of their earnings into a 401(k) account on a pre-tax basis.  Furthermore, interest earned on money in a 401(k) account is never taxed before funds are withdrawn.

 

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