Six Alternatives to Filing for Bankruptcy

Filing for bankruptcy is a drastic measure, one which could have an impact on your financial future for decades. For most people, bankruptcy is only used as a final option. Despite this, bankruptcy should not be considered a financial death sentence—on the contrary, declaring bankruptcy often offers a second chance to those who would not otherwise have received one. If you’re considering filing for bankruptcy, it’s possible that there are some other options to pursue before you go forward with a drastic action. Below are six different alternatives you may want to consider before filing for bankruptcy.

1. Use a Credit Counseling Agency

Before declaring bankruptcy, most people try to manage their debt. There are many credit counseling agencies that are, in fact, nonprofit organizations that just want to help. Such an agency can help you negotiate with your creditors and improve your financial situation. It’s always a good idea to seek professional advice for something as important as personal finance, so consider visiting a counselor before deciding on a repayment strategy.

2. Negotiate with Creditors on Your Own

In some cases, you don’t necessarily have to go through a third party to renegotiate your debt. If it looks like you may have no other way to pay off your bills, certain creditors may be willing to alter your payment schedules to give you more leeway. This can be difficult, however, and seeking professional assistance for negotiations is typically the best way to go about approaching creditors.

3. Sell Some of Your Property

If you file for bankruptcy, you may end up losing many of your assets. With this in mind, it may be better for you to sell your property on your own terms. For example, if you have a boat you have not used in many years, selling it to make a large payment on your significant credit card debt may be a good idea. Holding a yard sale and selling off many of the unused items lying around the house is a great way to put some extra money towards your debt payments and get rid of some clutter. 

4. Borrow from People Other than Creditors

While borrowing more money to pay off debt may seem illogical, it may be a good idea in certain cases. For example, you could borrow some money from family or friends. They are likely to be far more lenient than creditors. Just make sure to eventually pay them back to avoid strained relationships.

5. Slash Your Living Expenses

If a lot of your income is going to things other than debt, you can probably make some sacrifices to redirect some of those funds towards paying your debt down. Get rid of all unneeded expenses. It may be tough to only pay for the bare necessities for a while, but it will be worth it in the long run. Some of the most overlooked expenses are recurring automatic payments—cancelling your subscriptions to paid services that withdraw regularly from your bank account can save you hundreds of dollars every year. 

6. Consolidate Your Debt

Debt consolidation means restructuring all your debts into a new payment program. Debt consolidation can make paying bills less stressful and far easier to repay. It will also likely be cheaper than paying all of them off individually.

Though there are some good alternatives to declaring bankruptcy, for some it is the only way to manage their debt. A Mississauga credit counselor from Paddon & Yorke Inc advises those considering bankruptcy to first seek counseling to assess the options available to them. Being deep in debt is a difficult situation, but keep in mind that there are avenues available to help you recover your financial standing.

Six Ways You Can Save Money By Building Your Own Home

If you have a dream home in mind, why not take the project into your own hands? Not only is this option ideal for overly meticulous homeowners, but it can also a money-saving solution. Building your own home from the ground up can save tremendous amounts of cash that can later be used to purchase other necessities for the new abode like furniture and appliances. 

Avoiding Overhead Costs

An apparent way you save money from building your own home is you remove a third-party contractor. A typical rate charged by contractors range from 18 to 20 percent of the total expenses of construction and land. Furthermore, realtor fees can add 5 to 7 percent on your bill, depending on the total price of the house. By building your own home, you can easily cut the expenses by 30 percent. 

Exactly How You Want It

The only person who knows what you want is you. Sometimes, contractors are simply unable to make your home the way you want it to look inside out. When this happens, remodeling is usually necessary to alter the details. This leads to more costs for additional materials and labor work. Instead of a general contractor, you can hire professionals who specialize in certain areas that will work to make your home exactly the way you envisioned. 

Choice of Materials

Some contractors tend to use unnecessarily expensive brands for paint, wood, concrete, etc. Even worse, they can skimp on quality material to save a few bucks, meaning more repairs and replacements for you down the road. For example, for roofing, choose a company that offers quality material so you won't have leaks or problems in the future. Professionals can take care of the hard work for you, making it cost-effective for years to come.

Learn New Skills

If you stumble on something you don't know, you will likely learn the skill and eventually master it. This can save you money later on when similar problems occur, such as a leaking pipeline or replacing a filter. You can also save a ton of money when you complete do-it-yourself projects around the home, instead of hiring a professional to take care of the task each time. Who knows, you can even sell your newly found skills to neighbors who need help with their home's inner workings.

Energy Efficient

Being the contractor of your own housing project gives you the power to choose what appliances you'll be integrating into the structure. You can get long-term savings by using appliances with the Energy Star seal, which is a symbol of high energy efficiency standards. From windows and doors to kitchen appliances and energy-efficient washers or dryers, there many ways you can save money. Having these things will greatly reduce or utility bills. Aside from saving you money, you get to do your part in saving the environment as well. 

At Your Own Pace

If you have lots of time but are riding on a tight budget, you can choose to gradually build your home as you make the money for it. You can avoid steep interest rates on mortgages while seeing your hard earned investment slowly turn into your dream house. Things like the basement are a great place to remodel or finish at a later time. You can also add on rooms or bathrooms in the future when you find more need for them.

While building your own home has it's own unique costs, in the end, it can be a cheaper option for many. With these tips in mind, you can have the home of your dreams without putting a huge dent in your wallet.

Informational credit to Century Roofing Ltd.

Dealing with a Pension Divorce

 (Photo credit: Wikipedia)

Divorce rates have risen considerably for the over-50 demographic. In the US, for example, the rate at least doubled between 1990 and 2009. In fact, the number of divorcees over the age of 50 now exceeds the number of widowed seniors in the US. Likewise, in the UK, divorce rates for those over 60 years of age are now seven times higher than they were in the 1950s.

While statistics show that the likelihood of a couple getting divorced decreases the longer they are married, we are still seeing a spike in the number of pension-aged couples looking to split. In fact, the New York Times recently reported that divorces in the over-50 category have outpaced those of younger demographics.

Any time a marriage ends, a variety of problems come into play. The following are just a few of the most common:

• Economic strain
• Poor health
• Strain on the extended family
• The need for government sponsored assistance

When younger couples get divorced, the stakes are generally lower. For example, married couples around the age of 30 are less likely to have children or substantial assets that need to be divided. Pensioners, on the other hand, have a lifetime of property and assets to contend with – not to mention an extended family that has only ever conceived of the couple as a unit.

However, one financial consideration that deserves more attention than it receives has to do with the pension itself. You see, getting a divorce can actually affect the amount of your pension. And it’s not as if the amount is simply cut in half and divided amongst the two. The actual algorithm employed is much more complicated, which makes it all the more important to seek the advice of family law solicitors before going through with the divorce. At the very minimum, both parties need to understand how this dramatic change is going to affect their finances.

Generally speaking, there are three common ways to deal with a pension in divorce:

1. Pension Off-Setting

In this situation, the pension is drawn entirely by one person (who is, more often than not, the husband). In its place, the financial equivalent to sum total of the pension is given to the other party in the form of cash, property and other assets.

This is often a more attractive option when one person has been the primary income earner for the family. In this case, the person may feel like their pension is a direct extension of their professional performance. It is a personal asset that results from years of hard work. With that in mind, splitting the pension after a divorce may make the person feel uncomfortable. 

2. Pension Splitting

This is precisely what it sounds like. The pension is simply divided evenly between the two people when the divorce is finalised. There are usually a couple of options in this scenario. Half of the pension can be withdrawn and deposited into a different scheme. Likewise, the entire sum could remain in the original scheme and simply be paid out in halves to both parties over time. This is usually only an option where government agencies have introduced specific legislation. 

3. Pension Earmarking

This is a less common approach to settling the pension. In this case, a portion of the pension is legally attached to spouse. When he or she retires, this portion will be paid as a pension benefit.

Valuing Your Pension before Divorce

If a divorce is on the horizon, it is essential that the couple arrange a pension valuation. This ensures that both parties understand exactly how much they are going to receive form a split pension in the future. This is complicated business, and you will almost certainly require legal assistance to effectively determine this.

Valuing a pension is going to cost a bit of money up front, but it is most certainly worth the expense – especially if the size of the pension is going to play a critical role in one or both person’s quality of life after the divorce.

Divorce is painful and rarely easy, and the difficulty in divvying up a pension only adds to the stress and anxiety. That’s why it’s so important to fully discuss your options with an attorney before going through with the split.

How to Ensure Financial Security After a Car Accident

When you have been in a car accident, you could be injured badly. You may be out of work for some time, or you may have to make expensive repairs to your car or perhaps the other party’s vehicle. All the items below will help you ensure that you are financially secure after the accident.

Insurance

You need car insurance to help repair your vehicle. Your car insurance will also help repair the car of the person you hit if you are at fault. You will have to pay for these repairs out of your own pocket when you do not have insurance. Chances are you will face major financial debt or even bankruptcy if you do not have insurance. You could also face a lawsuit especially if the accident is your fault.

Also, according to Anthony Clark Insurance Ltd., insurance will help you pay to replace your personal items. You can have an allowance through your car insurance that will pay for things that were damaged or lost in the accident. 

Civil Claims

You can make a claim in civil court if you feel that you were injured through no fault of your own. The civil claim could lead to a judgment or settlement that will pay you for your pain and suffering. If you have not explored this option, you could be leaving money on the table. However, beware of pursuing a lawsuit. If the other part feels that you were at fault of the accident, they can file a counter claim and attempt to sue you for their pain and suffering. They can also do this even if they are at fault for the accident as long as they have a credible claim that you were also negligent during the accident as well. 

Gap Insurance

There is another type of insurance that you need to have if you want to be financially stable after an accident. Gap insurance helps to pay for the difference between when you owe on a car and what the car is actually worth. You may owe $15,000 on a car, but your insurance may call the car a total loss at $13,000. The gap insurance will pay for the extra $2000 that you would have to keep paying for a car that you have lost in an accident.

Disability Insurance

Disability insurance will help pay your salary while you are out of work. You may never use your disability insurance, but you must pay the premiums to make sure that you are protected at all times. Most people get short term disability which lasts for 30 days, but they also need long term disability that will last up to six months. If you do not have disability coverage, you will lose all the salary you could make at work during the duration of your injury or disability. 

You also may have other expenses that will need to be covered as well. Medical bills are often very expensive and can be crippling financially without the help of disability insurance to take care of you and any loved one that may be involved. The last thing anyone wants while they are on disability is to have to worry about any financial problems or mishaps. Having the necessary insurance to help you out during this time will only lessen the burden and stress that has already been laid on your shoulders after suffering an accident.

When you are involved in an automobile accident, you need to make sure that you have covered all the items above. Each one helps you to remain financially stable even though you have lost your car, are injured and may be out of work.