How Bankruptcy Can Help You Survive Financially

There's a bankruptcy myth floating around that says most Americans who file for bankruptcy do so because they lived a lavish lifestyle and spent beyond their means. However, according to a 2013 CNBC report, more than half of all bankruptcies are initiated due to medical bills. The stereotype of people filing for bankruptcy because they spent too much and got in over their heads with credit cards no longer applies in today's economy. Here are some of the ways bankruptcy can help those who face debts they're unable to pay:

Debt discharge

The most evident advantage of filing for bankruptcy is that it forgives many forms of debt, including credit cards and medical bills. This means you're no longer responsible for paying them, giving you a clean slate. Giving yourself a clean slate will allow you to get your personal finances in order and under control. This should help you reduce any stress you have over your money as well as any family stress that might be present. Then finally the day that you make it out of debt, you may find yourself with an overwhelming sense of freedom.

Debt reorganization

There are several types of bankruptcy, and not all of them wipe away debt. If you file for Chapter 13, your debts can be reorganized and consolidated into a more manageable solution for repayment. Though this may not be as good as getting your debt completely forgiven, it will still allow you to get your finances in order in order to pay off your remaining debts. Think of it as a long-term strategy to getting yourself to be debt free and out of bankruptcy within a certain period of time. 

End collection harassment

Creditors are probably the worst part of being in debt. However, if you have to file for bankruptcy, one of the most immediate advantages of bankruptcy is that the court will issue an 'automatic stay,' which legally blocks menacing creditor and collection agency phone calls and letters that rob you of peace of mind. Being in bankruptcy and massive amounts of debt is horrible and you feel horrible. It creates tremendous stress on you and anyone that might be around you. Peace of mind is important while you are trying to recover financially. The last thing you will need is harassment from those mangy creditors even if it is their job to come after for the debts you owe.

Stop foreclosure and repossessions

A common misconception is that you will lose all of your property when filing for bankruptcy. However, there are federal and state bankruptcy exemptions that allow you to retain your house and even personal property such as jewelry. Bankruptcy consulting firms are a rich resource regarding bankruptcy laws. Consulting firm like Exelby & Partners Ltd. can assist you with the bankruptcy process and help you retain as much personal property as possible.

Stop wage garnishments

Some forms of bankruptcy can even put an end to wage garnishments. Again, a bankruptcy firm will know how to legally stop such a garnishment.

Financial advisor Suze Orman gives the following advice about filing for bankruptcy: "When somebody really doesn't have money to pay their bills then they should claim bankruptcy and face it right on and start all over again." In fact, in a recent interview with Oprah Winfrey, Orman concluded, "You just need to know that your credit will eventually recover, and it's not that big a deal." The various bankruptcy options available are an effective means of assisting those who struggle with debt and often are unable just to meet everyday expenses.

How Bankruptcy Affects Your Credit Score

If you are facing bankruptcy, you’ve probably already realized that your credit score is going to take some damage. You now want to know the hit your credit score will take, how long it will take to recover from bankruptcy, and how to find someone to help you through the process. How far your credit will plunge is entirely dependent on where your credit score is at when you file. After bankruptcy, most credit scores end up in the 520-540 range regardless of where your credit began, so your score will fall much farther if you start with a score of 720 than it would if you’re starting at 600. 

Not All Bankruptcies Are Created Equal

When it’s time to file for bankruptcy, you need to decide if you will file for Chapter 7 or Chapter 13 bankruptcy. Chapter 7 bankruptcy, sometimes referred to as a “straight bankruptcy,” offers a clean slate and a fresh start. But it comes at a high cost—your assets are liquidated and used to pay off as much of your debt as possible, and it stays on your credit report for ten years. If you have a large number of personal assets, this may not be your best option. 

According to a financial advisor specializing in bankruptcy in Utah, Chapter 13 bankruptcy is for those who have property they wish to keep. It reorganizes your debt and helps you create a plan to pay off your debt over a period of three to five years. With Chapter 13 bankruptcy, your assets and property will be left alone, for the most part, making this option more popular with homeowners than Chapter 7. At the end of a period of time determined by the terms of the Chapter 13 bankruptcy, the remaining debts are forgiven. 

Seeking Help from a Professional

Filing for bankruptcy isn’t the sort of thing you should try to do alone, and it may not be the right decision at all for you. The most important first step you can take is to schedule a financial consultation with a good bankruptcy lawyer, whose job it is to educate you and help you make the best decisions possible regarding your financial future. A bankruptcy lawyer can assist you in understanding the consequences of bankruptcy, assessing your alternatives and reaching an informed conclusion as to how to manage your financial situation from there on out. 

Your financial situation now could very well influence the rest of your life, so it’s of the utmost importance to gain as much education as possible on how bankruptcy will change that situation before moving forward. Our government has laws in place to protect those who file for bankruptcy, but trying to navigate them on your own can be nearly impossible. An experienced bankruptcy lawyer can help you make sense of the legal and financial jargon, getting you the best deal possible when it comes to the terms of your bankruptcy.

A bankruptcy lawyer may also be able to coach you through preserving some of your credit during the course of your filing and subsequent bankruptcy period. These professionals often have experience with money management techniques and debt relief strategies—use this experience to your benefit by inquiring about strategies you can use to quickly rebuild your credit after declaring bankruptcy.

Filing for bankruptcy can be a scary, but necessary, decision you have to make to ensure a better financial future for yourself. Your damaged credit will not last forever, and in time you will be able to rebuild your score. You are taking a fresh step to a brighter financial future.

Burdened by Bankruptcy? 5 Quick Tips for Emerging from Debt

If you declared bankruptcy in the past couple of months or years and are still struggling to get back to normal, you can be proactive to improve your life. The whole point of enduring a bankruptcy is to get your life back on track. Let's take a look at four tips to help you rebound.

Chapter 7 vs. Chapter 13 Bankruptcy

Although filing for either form of bankruptcy means it will show on your credit record for the next 10 years, there are significant differences between the two. With a Chapter 7 bankruptcy you likely had barely any disposable income, so you will be forced to liquidate your non-exempt assets in order to appease your creditors. Though this type of liquidation likely won’t cover the full amount owed, the remaining debt will be discharged (in nearly all cases).

If you are eligible for a Chapter 13 bankruptcy, also known as a reorganization bankruptcy, you meet minimum income requirements to avoid a complete asset liquidation. Instead, you’ll be able to keep your home and other assets as long as you adhere to a court-approved repayment plan. You will still be expected to pay your regularly scheduled mortgage and car loan payments in order to keep those assets.

If you qualify for it, Chapter 13 is much preferable to Chapter 7 bankruptcy, but in both cases you will have to rearrange your life in order to meet your obligations.

Create a Detailed Budget

Once you've declared bankruptcy, you'll have to develop a plan to handle your finances. This means spending mainly on necessities, with only a few luxuries from time to time. Follow the advice of Greg McBride: “Track your expenses for three months to get an idea of how much you're spending and where that money is going. Then create a realistic budget that fits within your monthly income.”

Apply for a Secured Credit Card

In order to rebuild your trustworthiness with credit, you'll have to start out with baby steps. The first step is obtaining a secured credit card. A secured credit card lets you improve your credit score little by little as you spend what you've deposited on the card. Reach out to bankruptcy trustees like those with Keith G. Collins Ltd in Winnipeg to help you through the bankruptcy and credit counseling processes. Once you've brought your credit back up to a respectable level, you'll soon qualify for traditional credit cards and be able to pass employer and landlord credit checks without a problem.

Bring Cash Everywhere

While you'll be able to qualify for a secured credit card after bankruptcy, you should always carry cash wherever you go. You won't qualify for any lines of credit with significant spending caps, so you'll have to spend within reason for a series of years until you can prove that you are once again credit worthy.

Establish a Bill Paying Schedule

One of the best ways to rebuild your credit and avoid extra costs is to pay all of your bills on time and in full. If you run out of cash and are only able to pay part of your bills or make late payments, your credit will continue to suffer. Don't let that happen. Create a calendar that is specifically devoted to bill due dates. Rebuild your credit little by little and eventually you'll be able to qualify for loans and lines of credit once again.

If you've declared bankruptcy, don't wallow with hesitancy and indecision after the fact. You have a golden opportunity to get your life back on track. Follow the advice above and you'll be well on your way to a return to normalcy.

6 People Who Went Bankrupt Early In Life and Later Retired Comfortably

Portrait of Henry Ford (ca. 1919) (Photo credit: Wikipedia)

Filing bankruptcy doesn't only affect finances. People who file bankruptcy often take a hit to their self-esteem. Fortunately, bankruptcy doesn't mean an end to success and financial stability. According to Abakhan & Associates Inc. from Kelowna, British Columbia, bankruptcy may provide the clean slate needed to start over and become even more successful than before. Several well-known people had to file for bankruptcy before they found success.

Cyndi Lauper

Before she was an 80s music icon, Cyndi Lauper's band Blue Angel had a record that flopped. Their manager sued them for a hefty $80,000 and forced Lauper into bankruptcy. She went out on her own and her hit song “Girls Just Want to Have Fun” helped make her one of the most popular singers of the 80s. With her bankruptcy behind her, she created a better financial future for herself.

PT Barnum

Before he created the “Barnum and Bailey Circus”, PT Barnum owned a museum that showcased natural oddities and invested in the development of East Bridgeport, Connecticut. Both business investment failed to work out, and subsequently PT Barnum was forced into bankruptcy. Four years later, at the age of 61, he found success in the circus business.

Walt Disney

Walt Disney's first animation firm, Laugh O Gram Studio was opened in 1920 in New York. The company saw some success, but ended up suddenly broke. It was this first attempt that created the iconic mouse, Mikey and also forced Walt Disney into bankruptcy. Disney earned the money to travel to Hollywood where he started his business over and named it after himself. He earned millions of dollars and remains one of the most well-known names in the industry.

Henry Ford

Today, the Ford Motor Company is a household name. The founder, Henry Ford wasn't always successful, though. As an engineer at The Edison Illuminating Company, he created his first automobile called the “Quadricycle”. The design was a success, but his marketing efforts failed, and the vehicle didn't catch on with the public. He left the company and filed for bankruptcy shortly after. A year later, he created the Ford Motor Company. His newly developed automobile was record breaking. In 1908, he released the Model-T and became one of the most famous names in the car industry.

Milton Hershey

Milton Hershey is the father of Hershey’s chocolate. This brand is ubiquitous and is recognized internationally as a quality candy company. However the beginning wasn’t easy for Milton. In fact his first couple of attempts at starting a confectionary company failed and resulted in bankruptcy. The family eventually came to view him as an irresponsible vagrant. He finally found his success after learning some confection secrets from a company in Denver, and bringing those secrets to Lancaster Michigan.

H.J. Heinz

Love your ketchup? Thank H.J. Heinz for having the persistence to push through difficulty. At 25 he started a company that produced horseradish. According to legend, there were 57 varieties of his horseradish. After an economic slump in 1875, Heinz’s enterprises were forced into bankruptcy. That didn’t stop Heinz: the very next year, Heinz partnered with family members to start producing the world’s most popular condiment: ketchup. In Pittsburg, the business took off and gained massive popularity. Today the legacy lives on as Heinz Co. rakes in billions of dollars in revenue per year.

Bankruptcy isn't a reason to feel bad, and it doesn't mean giving up on a better future. When filed wisely, bankruptcy can be a good way to protect against debt, start over with a clean slate and work toward building a better, more stable financial future.

Tips to Get Back on your Feet after Bankruptcy

Bankruptcy can be one of the most difficult events to recover from financially after the credit becomes destroyed and the bankruptcy is recorded for the next seven to 10 years. Although it can be difficult to regain your financial standing, there are several ways to get back on your feet with the right resources and tools. Although it can take up to a decade to have a clear record, there are important steps to take to regain your standing.

Consult with Credit Counseling

Several non-profit credit counseling services are available, making it easy to become educated on improving the future of your credit score. A counselor will be able to provide you with a plan and steps to take to regain a foothold on your score. If you are still in the bankruptcy process, you'll also want to talk to a bankruptcy attorney to find out ways to minimize the effects of bankruptcy on your financial future. Some bankruptcies are due to lack of financial education or bad financial planning. Take the time to educate yourself on money management by taking a free online class

Monitor Your Credit Score

It's important to check your credit score periodically and look for possible errors in your history. Credit repair services can assist with removing the errors should they prove to be illegitimate. Avoid closing credit cards, which can reduce the age of your credit history. It's important to keep an eye on your credit to not only keep track of the progress of your score but to ensure that no one is using your identity or opening fraudulent account in your name.

Apply for a Secured Credit Card

You may find it difficult to be approved for a credit card after going through bankruptcy, but a secured credit card from a major bank will gradually increase your limits when you prove to make payments on time. Although the cards come with high interest rates and upfront fees, they will be worth the investment with proper use. A normal credit card can then be opened after your credit score is above 600. It's a good idea to use credit to start rebuilding your credit score, however you need to use credit wisely. Use it to buy the things you need and then pay the balance in full each month.

Avoid Unfair Lenders or Deals

Many lenders specifically target those recovering from bankruptcy in an effort to rip off those who may be uneducated and desperate for a loan. Look at the fine print and avoid rent-to-own offers or loans that have astronomical interest rates. If it sounds to good to be true, it probably is. So avoid potential ripoffs after filing for bankruptcy. Bankruptcy is tough, but it can give you a fresh start. Don't get off on the wrong foot by taking more loans and getting buried in debt again.

Create an Emergency Fund

Create a plan and prepare for the unexpected by creating an emergency fund to ensure that you have the financial means for paying medical bills or unexpected car repairs. This will prevent using a credit card and going back into debt. In order to start saving money, you will need to create a well planned budget. Make sure you are living within or even below your means so that you will avoid a situation where you get back into a cycle of debt.

With an estimated 1.6 million people who file for bankruptcy annually, many people may feel helpless and out of control with their financial future. Take advantage of a few important tips, which will work in your favor and with a bit of responsibility. Although bankruptcy can be devastating, there are several ways to recover and learn from past mistakes.

Quick Comparison of Chapter 7 vs 13 Bankruptcy Filings

Bankruptcy is steeped in myths and prejudices. If you are like most people, the first step towards repairing your finances is to overcome the feelings of shame, guilt, inadequacy and fear of what you don’t understand. Bankruptcy is designed to offer reasonable relief for honest debtors who are facing extreme financial hardship. If you don’t have any way of fulfilling your financial obligations, you should definitely consider a Chapter 7 or Chapter 13 bankruptcy. 

Advantages of Bankruptcy

As soon as you file a bankruptcy claim, a shield known as the automatic stay will keep creditors from contacting you and from proceeding with their legal filings. Any creditor that disobeys the automatic stay will face heavy fines and may even be forced to pay your attorney fees. However, creditors do have the right to ask the judge for permission to proceed with collection processes which may include foreclosure or repossession. Here are the biggest advantages of filing bankruptcy:

• Almost all lawsuits filed against you will be stopped
• Your wages can’t be garnished
• Evictions, foreclosures and repossessions will be averted
• IRS seizures will halt
• Most debts including credit cards, utility bills, phone bills, medical bills, most loans and judgments will be discharged

Top Bankruptcy Alternative

Bankruptcy should never be your first choice. You should resort to it only if you have exhausted all other possible solutions:

• Sell some assets to help pay debt
• Try negotiating with creditors to lower payments
• Restructure your mortgage
• Withdraw or borrow against pensions or retirement accounts
• Ask family and friends for help

Chapter 7 vs Chapter 13

Whether you file chapter 7 or 13 will depend on your situation. Chapter 7 liquidation allows you to eliminate almost all your debt, but you may be required to forfeit many of your assets including your home and valuable collectibles. These assets will be divided amongst your creditors. Anything you acquire after the bankruptcy cannot be touched. However, income tax refunds, divorce settlements, inheritances, and life insurance money may be applied to your debts for a certain period.

Chapter 13 restructuring gives you three to five years to pay all or a portion of your debts but makes most of your assets untouchable. This is for people who have a regular income but just got overwhelmed with debt. Your repayment plan must be approved by the court and it must pass two tests:

• The best-interest test: Creditors must get at least the same amount of money they would have received if you filed a chapter 7.
• The best-efforts test: Requires that you pay all your disposable income, minus reasonable expenses, to creditors.

Choosing a Bankruptcy Attorney

You should definitely hire an attorney to assist you through this difficult and complicated legal process. Though there are many generalized lawyers out there, a specialized legal team like Lynch & Belch P.C. and others in that market will thoroughly understand bankruptcy law, help you with all paperwork, secure maximum relief for you, and will have excellent customer service.

You should never let debt take over your life. If everything else fails, bankruptcy is a viable option that has many benefits that will help you get back on your feet.

The Bankruptcy Battle - 4 Signs You Need To Declare Bankruptcy

Bankruptcy (Photo credit: LendingMemo)

Bad things can happen to good people. Personal financial difficulties often go hand-in-hand with challenging situations including illness, divorce or the loss of employment. Unfortunately, your creditors will often be unwilling to make payment arrangements that are affordable for you. Remember that no matter how large your debt, you still need to maintain your current living expenses. One of the most common reasons that people file bankruptcy is a loss of income. Not everyone who loses a job will file for bankruptcy. Here are 4 signs that you need to declare bankruptcy.

You Can Not Afford to Pay Your Bills

If you have found yourself in a situation where you are unable to fulfill your financial obligations, it might be a good time to consider declaring bankruptcy. According to Paddon & Yorke Inc, dealing with debt is very stressful. If you are being harassed by creditors who are unwilling to help you negotiate lower or deferred payments, filing bankruptcy papers will bring that harassment to an immediate end. While filing for personal bankruptcy may seem scary, there’s a lot of personal bankruptcy firms in Toronto who can help you. 

You Have Become Ill or Disabled

If you have medical expenses piling up and you are unable to pay them, it might be a good time to declare bankruptcy. This is a very common reason for filing, as explained above. Bankruptcy will help you to get a repayment plan that you can afford, or it may discharge your medical debt completely. And being ill or disabled automatically qualifies you for some government benefits, which may also aid in you reorganizing your finances in such a way that you can afford to work through the payments and get your money back on track. 

Are You Trying to Save Your Home?

If you are at risk of losing your home because you are trying to balance too much debt, this is a sign that you should consider bankruptcy. You can make new payment terms with your mortgage company as a part of the process, while your other debts are discharged. This will give you the financial ability to pay your mortgage and to stay in your home. Losing your house is usually a last-resort thing and means that you’re in some serious trouble, but it also gives you a lot of motivation to help fix your finances. In these situations, a little bit of healthy fear will go a long ways to helping you fix the way you spend and manage your money. 

Do You Live Paycheck to Paycheck?

While many people live paycheck to paycheck, some find it easier than others. If you have found yourself in a situation where you can no longer afford to pay your debts and need a fresh start, this is another sign that you might want to declare bankruptcy. While bankruptcy is not the best answer for everyone, it can help to alleviate financial strain on families struggling to meet day to day needs. Especially if you have a family, living paycheck to paycheck is not an ideal situation. Kids get sick, and other expenses come up that you can’t predict. Getting yourself to a stable financial situation is imperative.

If you have found yourself in any or all of the above situations, you should seriously consider declaring bankruptcy now. It will help you get your life back on track and give your a fresh financial start. Whether you have recently lost your job, faced an illness or injury or are recently divorced, there is no reason that a few bad years should ruin your life forever.

Do I Need to Declare Bankruptcy? Five Tips on Deciding if Bankruptcy is the Answer

As a business owner who has poured his or her heart and soul into an effort, it can be quite difficult to determine if bankruptcy is the answer for your business – in effect, it is closing a chapter in your life. Deciding to give up on your business and declare bankruptcy is always a tough step, but if you do your research you can be sure that you are making the best decision for yourself and your company. Here are a few criteria which can help you determine if bankruptcy is the right course of action for you.

Have you lost your passion for the business?

If you do not have the same fire for the business that you had in the beginning, then you will not be able to overcome the financial hurdles that you will need to in order to bring the company back to profitability. If you have lost passion, then it is time to cut the cord. If you are still highly devoted to your company and want to try other options to stay afloat, then it might not be time for bankruptcy.

Are the finances insurmountable?

If you have consulted with reputable, trusted financial advisors and you have multiple opinions saying that there is no way to return to profitability, then you may want to consider declaring bankruptcy. However, only consider this if you have multiple opinions telling you the same thing about your business. If you are still not sure that this is the right option for you, get a second opinion and look into other debt consolidation options.

Has your schedule changed?

Do you have less time to invest in your company than before? There are many life events that can completely change the schedule of an individual. Businesses take time to turn around, if you do not have this time, then it may be time to move on to other endevours.

Are you beginning to sell long term assets for short term fixes?

No financial advisor will ever tell you to trade long term assets in order to pay off short term debts. When your business begins to eat into your long-term savings, then it is time to stop investing in it and possibly declare bankruptcy. You don't want to risk losing everything and your future financial freedom for a short term fix.

Is bankruptcy the best legal option for you?

There are many ways to pay back creditors other than bankruptcy, many of them with less long-term financial repercussions. You can try to consolidate your debts or to settle them. Sometimes even those options won't keep your afloat though. According to an expert from Abakhan & Associates Inc, bankruptcy may actually be the best option for you under certain circumstances. You should consider a consultation with a reputable bankruptcy lawyer to discuss your options before declaring bankruptcy in BC.

Declaring bankruptcy is a decision that should not be taken lightly; however, time is of the essence when you are considering the future of your business as well as your life. Make sure to get expert opinions as soon as you can so that you will have the information to make an informed decision about how you should move forward with your financial life. Make sure that you get professional advice right away so that you don't dig yourself deeper and deeper while you are making your final decision.

Celebrity Bankruptcy- A Lesson in Finances

Nothing catches the attention of the press quite like a celebrity wedding, except maybe a celebrity bankruptcy. There’s something captivating about watching someone go from a multi-millionaire to bankrupt in the space of one news article, and it leaves us wondering, “How did this happen?” It seems the bigger they are, the harder they fall, but celebrities who go bankrupt have mostly made the same types of financial mistakes that everyone else does, albeit on a bigger scale.

Living Within Your Means

To live within your means is to keep your expenditures each month lower than your income. It seems simple on paper, but many people struggle with this concept, even celebrities. In the case of the exceedingly rich, it seems their lavish lifestyle becomes an entity of its own, requiring more and more funding until it finally breaks the bank. For the average person, life changes, like the loss of a job, can turn a comfortable situation into an uncomfortable one very quickly. Living well within your means, leaving lots of wiggle room for savings, can give you a cushion in hard times that can protect against financial ruin.

Don’t Bank on the Future

Many of the most glamorous celebrity bankruptcies stem from one hit wonders and other flashes in the pan who were planning on being a lot more famous. They receive their first big paycheck, and plan a whole lifestyle around it, assuming that more is on the way. When their 15 minutes of fame are over, and the money stops coming in, they’re headed for bankruptcy court.

The lesson here for the common man is that you should never put yourself in a position where you’re spending money you haven’t been paid yet. If it looks like you’re about to secure a new contract, or your recent job interview went really well, do not take this as a sign that you can go out and blow your savings. Just pat yourself on the back, hope for the best, and continue living within your current means.

Supporting a Habit

Celebrities often cite supporting bad habits as reasons for their bankruptcy. They get in over their heads because of drugs, gambling or other high roller vices, and stop paying their other bills. While our bad habits might not be as newsworthy, they can still put us in a bind budget wise. Some of our unprofitable bad habits include things like using credit cards to purchase luxury items that we can’t afford, or prioritizing wants over needs.

Pay the Taxman

It seems like just about every big name celebrity bankruptcy includes an unfathomable amount of money owed to the IRS in the form of unpaid taxes. It doesn’t matter how important you are, Uncle Sam still takes his cut. When you fall behind in taxes, the IRS can seize your assets and garnish your wages in order to obtain what’s owed to them, and this can leave you with little or no money to pay your other bills, and headed for bankruptcy. The worst part is that bankruptcy doesn’t even include IRS debt in most cases, so you’ll still have to pay your taxes in the end.

The best thing to do is take a lesson from high profile celebrity bankruptcies, and avoid this and other pitfalls altogether.

Tiecen Anderson
In her former life, Tiecen worked in sales and marketing for a large insurance company. Before starting a family, she decided to switch gears and pursue a career that would give her a little more time at home. She finished up her degree from California Sate University in 2008 and started picking up work as a corporate web content writer. She enjoys learning new things every day as she works with a wide variety of clients, like Rulon T. Burton

5 Ways to Destroy your Credit Rating

Loans (Photo credit: zingbot)

A credit rating is a tool used by banks to determine whether to loan money to you or not. Your credit rating is calculated based on your credit history, which is contained on your credit file. Your will have a credit file if you have applied for anything involving credit in the past such as: credit cards, mobile phone or internet plans, personal loans, mortgages or interest-free store loans. In order to keep your credit rating high, to increase the likelihood of loans you should avoid these five things.

Credit Defaults

Credit defaults occur when payments for loaned money are not payed back on time or at all. The most commonly credit defaults are: missed mobile phone bills, missed credit card payments, and missed personal loan payments. All missed payments are listed as defaults on your credit file and result in a lower credit rating.

Self-Employment

Unfortunately, people who are self-employed can have a hard time winning favour with banks and other money lending organisations. This is due to the fact self-employment is viewed by these organisations as unstable and risky. If you are self-employed it is important that you keep track of your tax returns and profit-and-loss statements, so when the time comes you can prove that you have sufficient income to make payments.

Discharged Bankruptcy

Discharged bankruptcy is the term used to describe an individual after they have paid off, otherwise settled, all previous debt. After settlement has been agreed upon, the bankrupt individual should then apply for a discharge certificate ordained by the court to prove their freedom from bankruptcy. Technically, a person who is classified as having a discharged bankruptcy, is allowed to take out loans again, very few institutions will take the risk for several years after the bankruptcy.

Being on a Debt Agreement

A debt agreement is legally binding agreement between a debtor (the loaner) and their creditors. In this agreement, creditors will accept a sum of money, which the debtor can afford in order to make up for an unmanageable debt. Proposing a debt agreement is considered an act of bankruptcy and will severely lower your credit rating.

Getting Declined by Banks and Other Creditors

Often an institutions willingness to give loans is influenced by past creditors opinions if the individual in question. If past creditors have deemed the individual to be reliable, then they are more likely to agree to a loan. Alternatively, if past creditors view you as a credit risk, then you are less likely to get a loan in the future, so it’s best to leave a good impression from the start.

Although it is important to avoid doing damage to your credit rating, sometimes it is inevitable. Getting a car loan while you are struggling with a bad credit rating can be difficult, but it’s not impossible. Nowadays there are many options for those searching for bad credit car loans.

How to Keep Your Car When Filing for Bankruptcy After Retirement

You need to make serious changes in your life when you are filing for bankruptcy after retirement. You will probably need to give up your credit cards and live a more frugal lifestyle. This is a common problem that many people face in their first few years after they stopped working, because they aren’t used to living with less money. 

Most of the changes that you need to make probably won’t be as bad as you would expect. However, there are some changes that you may not be able to accept. Giving up your car would be a hardship that you may not be able to make. Many people in retirement couldn’t possibly survive without their car.

You depend on your vehicle to get to run important errands. Fortunately, you may be able to still keep your vehicle if you play your cards right. Ideally you will be able to keep your car if you intend to keep driving during retirement.
Understanding Bankruptcy Exemptions

Most people assume that they will need to forfeit their vehicle after filing. However, there are a few exemptions that you should be aware of.

Some states have wildcard exemptions. These exemptions mean that you can protect the equity of your vehicle if it less than the state’s wildcard exemption. For example, Alabama has a wildcard exemption of $3,000. You would need to see what the equity in your vehicle is to see if you can protect it. For example, your lender can’t legally sell your vehicle if it is valued at $25,000 and you owe them $23,000. If you only owed $20,000 then you wouldn’t qualify for this exemption because your equity would exceed the state’s wildcard limit.

There is also a federal wildcard exemption which allows you to protect up to $3,450 in equity. You may be able to combine the state and federal wildcard exemptions to fully protect the equity of your vehicle.
Consider a Reaffirmation Agreement

You can also work with your lender to keep your vehicle. One way that you can do this is by forming a reaffirmation agreement. This agreement allows you to keep your car after bankruptcy as long you keep making payments. It is possible to negotiate lower payments, but most people aren’t successful. There is no harm trying though. You should also find out what your loan payments are going to be to ensure they will be affordable.

It sounds great to get a second chance, but this isn’t always a great option. You are reestablishing liability when you sign this agreement. You need to be certain that you can make the payments if you go this route. If you miss a payment then the debtor can both repossess your vehicle and force you to pay the remaining balance. This may not sound equitable, but it is a real risk that you need to be aware of.

Unfortunately, approximately two thirds of lenders require people to sign a reaffirmation agreement to keep their vehicle if they don’t fall under the exemptions. Therefore, signing a reaffirmation is an option that you need to be aware of if you think that you can make the necessary payments.
Motion to Redeem

The motion to redeem option allows you to buy your vehicle back at the current market value. This may not seem like a great solution at first, but it can be helpful if your car has depreciated considerably. You may owe $20,000 on a car that you bought a few years ago that is currently only worth $8,000. If you have $8,000 then you may want to use it to pay down the remaining balance on your loan.

About the author: Kalen is a freelance financial writer with an MBA from Clark University. He shares tips on budgeting and money management.

Financial Future: How does filing bankruptcy affect future finances?

Depending on your situation, filing bankruptcy can either have a negative or a positive effect on future finances. Filing bankruptcy will no doubt show up on your credit report. This will cause many lenders to not lend money for a home, car, or to get a personal loan. Many creditors will ask if you have ever filed bankruptcy in the past. The answer to this question could mean the difference between getting a loan in the future or not. Of course, not all lenders will turn you down if you’ve had a bankruptcy in the past. It will depend on other things like how much money you put down and what the need is.

Negative

Business owners may be negatively affected by a bankruptcy because it can cause lenders not to give you a loan for business needs. This means if you are trying to start a business or restart one or get money for a business need, it may be difficult to get a loan from a lender with a bankruptcy on your credit report. However if you fail to file for bankruptcy, your future financial situation could be much worse.

Positive

Bankruptcy allows you to get your financial house in order if you are surrounded by debt and have no way to pay your debts. Instead of staying in the same situation and having your debts continue to mount. Bankruptcy will help you straighten your finances out and provide a new start. Bankruptcies don’t last forever. They don’t show up on your credit report forever. They drop off just like any other negative mark on your credit report. A chapter 7 bankruptcy will last for seven years on your credit report and a chapter 13 will last for 13 years on your credit report. Which one you choose depends on your individual situation.

Things to Consider

Many people think it’s the worse option available and try to do everything to avoid it. However, bankruptcy can actually be the best thing to do. It can be a lifesaver. And it can help turn your dire financial situation around. Bankruptcy acts as a shield between you and your debts.

For many people, it allows them a chance to start over again with their finances and gets things organized. You credit score will definitely be affected by a bankruptcy. It will lower it but it may not lower it as much as having a pile of unpaid or bad debt on your credit.

The Truth about Bankruptcy

Bankruptcy can be a bad thing to many people. Most people feel as if they have failed if they file bankruptcy. But bankruptcy does not mean you are a failure. Things happen unexpectedly that we are not able to control, such as job loss, income decreasing, health issues, and other personal issues that interrupt our normal lives and can cause serious consequences.

Good Bankruptcy Attorneys can help greatly in the process of filing for bankruptcy. Experienced attorneys can recommend a credit counseling or debt consolidation that’s better than filing bankruptcy or help you file a claim.

About the AuthorAshley Parker has written hundreds of articles on a variety of topics for more than seven years. Topics that she writes on include alternative energy, healthy living, home design, career advancement, travel, SEO marketing and website content.

Lexis Nexis Provides Documents to Professionals

Lexis Nexis Since its founding in 1977 — long before the World Wide Web came along — Lexis Nexis has been serving lawyers all around the world by providing them with a database that they can use to refer to legal and journalistic documents. 

Millions of people who work in the legal profession rely on Lexis for the information that they need on various topics — bankruptcy law, family law, torts, crimes and everything else. And more than 15,000 people are employed by the company. 

What Lexis provides 

The innumerable products available from Lexis include publications in the forms of loose leaf files, newsletters and online texts that are updated as often as necessary. On the subject of bankruptcy, for instance, there is a loose leaf file also available online that covers the following subjects: 

• causes and consequences of bankruptcy prior transactions distribution  
• priorities discharge 
• annulment bankruptcy-free arrangements trustees acts
• regulations regarding bankruptcy
• legislation related thereto rules federal court forms
• forms approved by the ITSA affidavit precedents 

In all, there are five documents in the Australian database under the subject of “insolvency and bankruptcy.” 

Lexis also provides extensive support and training for researchers in the form of video and audio recordings.

Bankruptcy Is Not the Only Way to Fix Your Credit Problems

Wipe our Debt (Photo credit: Images_of_Money)

Many people mistakenly believe that bankruptcy is their only option once they get into deep financial trouble. There is an entire industry of bankruptcy lawyers, auctioneers, real estate vultures and bankers who would have you believe this; however, the truth is that you have many other credit repair options. 

Bankruptcy should be a last resort - a little research will prove that you can find a better solution without all of the negative long term financial ramifications. The first step is to determine the best professional help that you can get in your area. 

For instance, funnewjersey.com has a listing of the top ten credit repair companies in its area. Borrowers who are in trouble can go directly to those listings for a choice of reputable companies with years of experience helping people out of debt. 

After choosing a company, a borrower will be able to pick between the different sorts of plans that company has available. Most companies have a variety of plans including debt management, debt consolidation and professional budget accounting services. 

Determining the best course of action is a shared effort between you and the debt relief company. New Jersey is no place to live if you are in debt. 

Find and contact a professional debt company today and give yourself the leverage that you need to get back on your financial feet.

Bankruptcy Helps You Start Over Again

debt (Photo credit: Alan Cleaver)

When you hear the word bankruptcy you usually think of failure. It's true that when you are going through it you feel like a failure and are embarrassed to have people learn about it. But bankruptcy is a legal and acceptable way to get you out of your financial problems. Bankruptcy is a complicated process and you need a bankruptcy attorney to guide you through it. 

When you got yourself in the financial mess, all you want was to make it go away and start over. With a bankruptcy, you can start over. You can wipe the slate clean and stop getting all those harassing calls from creditors. You won't have to deal with debt anymore. 

The elimination of your debt occurs when you file for bankruptcy. This includes major unsecured debts like credit card and medical bills. With these debts wiped from your credit report you can now start to rebuild your credit rating. Bankruptcy does effect your credit rating negatively for a while but over time your credit rating can be repaired to an acceptable level. 

Along with bankruptcy eliminating your credit and medical debt it also can prevent foreclosure and repossession. If you are behind on your house and car payments a San Diego bankruptcy attorney can prevent you from losing your home and car. 

Going through a bankruptcy is a stressful event but after you complete it you will have a better quality of life. You and your family will come out bankruptcy and live a less stressful life. Your debts will be gone and the worry of losing your home and car will also be gone. You will have peace again in your home.

Remember getting in over your head again can be relatively easy to do. You should attend credit counseling classes and learn all you can about debt and credit. Some people fall back into large debts because they haven't learned to change their spending behavior. 

The Story of Greek Sovereign Debt Restructuring

Graphic "When Greece falls" presented by Dutch government on 21 June 2011, speaking of European sovereign debt crisis (Photo credit: Wikipedia)

Greece, one of the ancient-most civilizations, the land of Plato and Aristotle, had gone through one of the most troublesome financial situations, recorded in world history. After the democracy of the country was reestablished in the year 1974, the social model has seen huge sums of public deficits. With the beginning of the year 2007, a devastating financial crisis struck the Grecian order. By 2008, the Greek economy had been damaged with fatal results, and the country was left with no means to service the bond indebtedness. Before the bond exchange offer was perceived, the total amount of Greek debt had reached an estimated sum of 350 billion Euros i.e. approximately equivalent to 456 US dollars. 

The International Monetary Fund or IMF and the countries belonging to the Eurozone, as it is popularly known, had organized a bailout amount of 130 billion Euros or 172 billion US dollars, and hence Greece was needed to refinance and reduce its outstanding bond indebtedness with the help of an exchange offer, to the best possible extent.

 

Required to Pay Back Debts before paying Employees 

It was decided that Greece would have to pass a law as soon as possible, in which it would be stated that the country would give prior importance to repay its debtors, and clear these debts, before the government services are paid for. On the other hand, its bailout amounts would be temporarily deposited to an escrow account independent of the chief budget. This particular account should never run out of money, since it is meant to repay the debts that are in line to come up in the coming three months. 

However, the implementation of this law would have implied that Greece would have to stop paying its doctors, teachers and similar employees of the state, and be forced to pay the interest amount on the debts it has taken. The Tragedy is most of these employees are as it is not being paid the wage amounts they are entitled to receive. 

Greece Emerging Victorious 

However, in spite of facing search adversities and going through such turmoil, Greece has actually emerged victorious. The Hellenic nation has been able to undertake the most happening sovereign debt restructuring that has ever taken place in history. As many as 85.8% private Greek debt holders have decided to come into an agreement to sign a debt write-off deal. This news has been reported by the Ministry of Finance, Athens. 
This particular deal has worked miracles by cutting down the total Greek debts by about 105 billion Euros, equivalent to 138.8 billion US dollars. The reduced amount stands for about half of the private debt, Greece had in its name. As a result the path for the country’s second international bailout package had been carved out, and this package is going to worth an amount of 130billion Euros, i.e. 173 billion US dollars. The European finance ministers was reported declaring that they have no issue in releasing the first portion of the fund, an amount of 35 billion Euros or 46.2 billion US dollars, immediately. 

Author’s Bio: Dan Young is a freelance writer, professional blogger, and social media enthusiast. His blog Ukash Kart focuses on Finance bloggers. You can follow him on Google+

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