What is the difference between a secured and unsecured loan?

A secured loan is backed by collateral, meaning if you default, the lender can seize the asset used as collateral (like a house or car). An unsecured loan, like a credit card, has no collateral; defaulting results in damage to your credit score and potential debt collection efforts.

How does bankruptcy affect my credit score?

Bankruptcy significantly and negatively impacts your credit score. The severity and duration of the impact depend on the type of bankruptcy filed (Chapter 7 or Chapter 13) and your credit history before filing. It can remain on your credit report for 7-10 years, making it harder to obtain loans or credit cards at favorable rates during that time.

What are my rights if I’m a victim of identity theft?

You should immediately contact the three major credit bureaus (Equifax, Experian, and TransUnion) to place a fraud alert or security freeze on your credit reports. File a police report and report the theft to the Federal Trade Commission (FTC). You’ll need to actively monitor your credit reports and accounts for any suspicious activity and take steps to correct any inaccurate information.

What is a fiduciary duty?

A fiduciary duty is a legal obligation to act in the best interests of another party. This often arises in financial contexts, such as the relationship between a financial advisor and their client, or a trustee and the beneficiaries of a trust. Breaching this duty can lead to significant legal consequences.

Can I sue a financial institution for negligence?

Yes, you can sue a financial institution for negligence if they fail to exercise reasonable care in managing your accounts or investments, leading to financial losses. To succeed, you need to demonstrate that the institution owed you a duty of care, breached that duty, and that the breach directly caused your losses. This often involves gathering substantial evidence and potentially expert testimony.

What is insider trading, and what are the penalties?

Insider trading is the illegal buying or selling of a publicly traded company’s stock based on material, non-public information. This is a serious federal crime punishable by hefty fines, imprisonment, and a permanent ban from the securities markets. The penalties can vary greatly depending on the severity of the offense and the amount of profit gained or loss avoided.

What are the implications of violating securities laws?

Violating securities laws can result in civil and criminal penalties. Civil penalties might include fines, injunctions, or restitution to harmed investors. Criminal penalties can involve significant fines and imprisonment. The specific penalties depend on the nature and severity of the violation, and regulatory agencies like the Securities and Exchange Commission (SEC) actively investigate and prosecute these offenses.

How do I understand and protect myself from predatory lending practices?

Predatory lending involves unfair, deceptive, or abusive loan practices targeting vulnerable borrowers. Understanding loan terms, including APR (Annual Percentage Rate), fees, and repayment schedules, is crucial. Shop around for loans, compare offers, and avoid lenders who pressure you into quick decisions or obscure the loan details. If you suspect predatory lending, contact your state’s attorney general’s office or consumer protection agency.

What is arbitration in financial disputes?

Arbitration is a form of alternative dispute resolution where a neutral third party (arbitrator) hears both sides of a financial dispute and makes a binding decision. It is often mandated in contracts with financial institutions. While generally faster and less expensive than litigation, it also offers less opportunity for appeal than court proceedings.

What is a power of attorney for finances?

A power of attorney for finances grants another person (the agent) the authority to manage your financial affairs. This can include paying bills, accessing bank accounts, making investments, and managing your assets. It’s crucial to choose a trustworthy individual and clearly define the scope of their authority in the document. There are durable powers of attorney that remain in effect even if you become incapacitated. Please click here for information about financial lawyer consultation.