Monthly Archives: March 2016

Tips to Managing Your Debt Effectively

ManageDebtEffectiveey-300x300Thousands of people around the world are so deep in debt that they experience constant stress, restless nights and their performance at work starts to suffer. Many will become physically ill because they realise that they have borrowed too much and their salary doesn’t cover the bill by the end of the month.

All it takes is one family member to lose their job and their world can drop out from beneath them. The dread when the phone rings to find a creditor on the other side of the phone or avoiding answering the door, in case one of the creditors are standing there wanting to collect. In addition to this, it severely affects your credit score.

Not everyone’s debt is their fault. Many institutions love throwing great deals your way from credit cards to loans to shopping accounts and more. It’s so easy to build up debt these days, but you have to also ensure that you don’t borrow more than you can repay.

There are a number of ways to ensure you don’t get into serious financial trouble, enabling you to put food on the family table each night. When you find that your debt is taking over your life and you have absolutely no way to repay it, it may be time to consider asking for bankruptcy advice.

The first is to consider selling some of your assets to repay your debts. This is not a pleasant solution by may be your only solution moving forward. If you were to file for bankruptcy, this is what would happen and if you have any secured debts, chances are they are going to come after your home or car in the near future if you continue to not pay the amount due. Consider selling excess assets, if you have a laptop, phone, tablet and desktop computer, consider selling one or more of the items, you don’t need them all, this can free up some cash to pay towards one of your monthly bills.

Another solution is that if you have two cars, but only really need one, consider selling the more expensive to run vehicle and use that cash to pay off some of your debts. Don’t fall into the trap of paying off accounts and credit cards using credit cards for payment. This can turn into a nasty cycle, which can leave you deeper in debt moving forward.

Speak to your creditors where you are having trouble meeting your payments and see if you can work out a payment arrangement. Remember your creditors want to ensure that they get their money, so they may be willing to come to a compromise, accommodating what you can afford, as long as they get their money back in the long run.

Try and pay all your bills on time. While this may sound an obvious solution to avoid bankruptcy in the future, it may not be the easiest. Paying your bills on time reduces the risk of late penalty charges and additional interest, this all increases over the months, leaving you with even more money you owe when you’re ready to make your next payment.

You can ask your family for money to help you get back on track, but remember that is leaving you in the same situation where you now owe them the money. If you cannot afford to repay, this can put strain on the family.

The final choice is to get some bankruptcy advice. Specialists are able to advice you moving forward, helping you decide if bankruptcy is the right solution to help you get your life back on track and eliminate the stress you experience on a daily basis.

5 Common Misconceptions About Bankruptcy

Misconception #1: YOU LOSE ALL YOUR BELONGINGS IN BANKRUPTCY.

Truth:

Many of the bankruptcy cases that are filed by individuals are known as “no asset” cases. This means that the debtor or debtors preserve all of their belongings. The reason for this is bankruptcy gives you the privilege to keep a certain amount of property in which you can start over with. The belongings that you are able to keep are known as exempt property. Depending on the state you live in will determine what you can keep.

Misconception #2: BANKRUPTCY RUINS YOUR CREDIT FOR 7 TO 10 YEARS.

Truth:

This misconception is unbelievable. There are many cases in which filing for bankruptcy will improve your credit. This is accurate for many debtors, because upon receiving their discharge, they are debt free. Often, their debt to income quota is zero. Once your bankruptcy is over, you can then begin the development of rebuilding your credit. If you are a proactive person, it is important to obtain new credit and to pay all of your necessities on time. If you are doing this for a constant two to three years you can reestablish good credit.

Misconception #3: YOU CANNOT DISCHARGE TAXES IN BANKRUPTCY.

Truth:

Conflicting with the common misconception, typically income taxes can be freed in bankruptcy if you have the following information:

1. The taxes have to be a minimum of three years old

2. The associated return must of been filed a minimum of two years ago

3. Any added appraisal was more than 240 days ago.

4. There was no engaging in fraud or tax evasion from the taxpayer

There are many reasons in which these time periods have the possibility to be extended, do not count on these things alone to determine the discharge-ability of taxes depending on your situation.

Misconception #4: MEDICAL BILLS CANNOT BE DISCHARGED IN BANKRUPTCY.

Truth:

Just like most bills, medical bills can also be discharged in bankruptcy. There are many suspicions in which individuals think otherwise. Wherever this misconception is coming from is false. In fact, one of the main three reasons that an individual will file for bankruptcy is medical bills, alone with job loss and divorce.

Misconception #5: YOU CAN PICK AND CHOOSE WHICH DEBTS TO LIST IN YOUR BANKRUPTCY.

Truth:

False. It is mandatory for all debts to be filed, including debts owed to family and personal friends, business partners, and future debts that you may have. It is not possible for you to eliminate one credit card from the bankruptcy.

How Can You Obtain a Good Credit Score After Bankruptcy

A bankruptcy is not good at all. It stays on your credit card report for 7 to 10 years. There is a possibility that your credit card score will remain low until you take some steps to make it better in no time.

But it takes a lot of persistence and patience and a steady stream of on-time payments on a monthly basis to rebuild the credit respectively. You have to think on smaller time frame when you begin applying for the credit cards. After the bankruptcy, there is a possibility that you may not be eligible for the consumer credit card at all.

How to rebuild the credit in two ways

1. Get a secured card: The secured card provides the best means when you are coming out of bankruptcy. Through this card, you can deposit some money in the savings account and that such a deposit secures the line of credit for you.

For instance, if you make a 300 dollars deposit that has an annual fee of 29 dollars, then your credit card limit will be 271 dollars. If you pay the account on time and make small purchases monthly, then this secured card will be quite helpful towards your credit. The usage of 10 to 15 percent of credit line is good, but you need to keep your balances low.

2. Get a Retail Card: The department store cards and the retail cards have relaxed credit requirements that will make you eligible to buy any of them after the bankruptcy. This can only happen once you have made a series of steady payment on time through a secured card respectively.

You have to pay the account entirely in every month, because of the higher interest rates that are linked with these cards.

How the credit can be used wisely

It is better for you to use your credit wisely after you get relieved from the post-bankruptcy period. You can follow the given steps below.

1. Set up automatic payments: It happens that several people opt not to receive the paper bills and tend to forget making the payment on time. So, you need to set up automatic payments so that the payments get directly deducted from your account each month on the respective due date.

2. Only borrow what you can afford to borrow: As soon as you know your budget and limit, you will know what you can afford. If on the regular budget you cannot meet the expenses for a trip to Bali, do not risk using a credit card to fund such a trip. Kindly refrain from using credit card excessively and use it only for those things that you can afford to buy.

3. Make a budget and stick to it: You need to evaluate on what you can manage to pay on your debts monthly after you have paid off your expenses. If your budget for food is 200 dollars, do not spend more on it. Overspending on one expense will not allow you to pay your debts on time.

Conclusion

After bankruptcy, you have to move cautiously and rebuild your credit in the correct manner. You have to ensure that you pay your bills on the stated time and avoid the bad credit score again from the late payments respectively. If you use your bank account consistently and responsibly, you will never become a victim to financial difficulty at all.

How to Avoid Bankruptcy and Eliminate Unsecured Debts

1. 1) First and foremost, know your budget. Precisely, curtail your budget. Do not left aside the bills you have to pay shortly. Create short term goals and invest according to that. There can be no hard and fast rules how to avoid bankruptcy, but only your perception can save you many a times.

2. 2) Pay exact taxes punctually. A non-payment of tax can easily result an asset penalty by the Revenue Department (IRS). A consequent raid can leave you a bankrupt anytime if you do not pay tax on time. Thus, rather than going through the small business bankruptcy tips, first check whether you are a tax-clean person.

3. 3) It is advisable for you if you are a small business investor to maintain separate bank accounts so as to pass up a bankruptcy. The reason is evident that in case of a situation of unsecured debts, you can save your compensating amount from clutch of the creditors.

4. 4) Avoid taking loans for repayment of any other debt. It will gradually leave you with more unsecured debts with time.

5. 5) Be transparent to the creditors about your financial status. If you are truly facing a financial crunch, convince them with substantial causes and proofs.

The above small business bankruptcy tips can make you mindful of the debt situations. However in case of unsecured debts, it is important to learn how to avoid bankruptcy. If such a condition appears, negotiate with an authentic debt settlement agency who can mediate between you and your creditor. The process can curtail your debt amount into almost half. It’s a legitimate way out to fight against bankruptcy. However, you need to show at least $10k debt to enter into a debt settlement program.

Debt settlement companies are widely available in just about every state however some are just flat out more experienced than others in debt negotiation. That’s why it’s so important for consumers to use debt relief networks.