5 Signs You Need to File for Bankruptcy

Most people see bankruptcy as a bad thing. No one wants to have to file for it unless they absolutely have to. In fact bankruptcy is there to help people and businesses get their finances under control (Source: Abakhan &Associates Inc.). It may not be fun, but sometimes bankruptcy is necessary. There are many signs that you are heading in the direction of bankruptcy. The following are five of the more common signs, but this list if not exhaustive. 

Borrowing to meet expenses

You may be living on credit cards just to buy food and other basic necessities. If not the use of credit cards, you may be taking out payday loans to get you through to the next paycheck. Whatever your particular situation is, part of your economic survival is dependent upon borrowing. This situation will usually get worse, not better, and the total amount you owe will keep growing. 

One or more debts are in collections

Regardless of how many debts you have, if one or more of these debts are currently in collections, then you may need to file for bankruptcy. This debt may be a car loan that is overdue that is putting your car in danger of being repossessed, or you may be receiving phone calls from debt collectors. Debts in collection are a sign you do not have control of your finances.

Behind in your mortgage payments

This is a bad sign. Once you get behind on your mortgage payments, it can easily lead to foreclosure. Home lenders are notorious for adding late fees and penalties to mortgage payments that make catching up difficult. Bankruptcy can often save your home. In some cases when you file for bankruptcy, some late payments or other penalties may be forgiven. However, it most cases the late payments and penalties are put on hold. The creditors will not be able to collect if at all until your state of bankruptcy has been resolved.

Your savings is gone

Hopefully if you manage your finances correctly, you seldom to never have to touch your savings. If you have a savings account and it depleted, this is a warning sign that you may need to file for bankruptcy. In addition, if your retirement accounts have also been cashed in or you are considering cashing them in, you may need to file for bankruptcy. A bankruptcy can protect your retirement accounts.

You can only make the minimum payments on your credit cards

If you have sufficient income to pay the minimums on your debt each month, you may not think you are on the verge of bankruptcy, but the fact is, you are not making any progress in paying down your debt. The slightest disruption in your personal finances can easily tip you over the edge and into a bankruptcy. If you have multiple credit cards, it is a smart idea to narrow it down to one card. This will help you stay away from the temptation of using too much of your credit to the point that you can’t pay it back. However, you don’t want to get rid of all of your credit cards because you want to try to maintain the best line of credit as much as possible.

There is no single sign that indicates you are ready for a bankruptcy. However, if you can recognize the signposts as you travel down the road to a bankruptcy, you may be able to make necessary changes. At the very least, you will be ready to file for bankruptcy at an appropriate time and not undergo needless stress in your life by delaying the inevitable.

How To Stay Calm And Make A Plan During An Unexpected Financial Crisis

No matter how good you are at setting up your finances, a crisis could come along and make life difficult for a while. During those times, it's important to keep calm and have a plan. While dealing with difficult financial situations can be stressful, it is possible to overcome them quickly and stay out of debt. These six tips will help you develop a plan to help you deal with your money troubles: 

Set Small Goals

When you're dealing with complicated financial issues, it's easy to get caught up in try to get through it all. However, small, attainable goals are the way to stay on track when things get overwhelming. Set daily savings goals and weekly objectives that will get you to where you want to go. Some ideas including using coupons, stop eating out and putting more in your savings account. Your long-term goal can quickly become overwhelming if you don't have small milestones you can check off the list along the way. 

Cut Daily Costs

In financial matters, every little bit counts. Look for for ways to cut a dollar or two out of your expenses each day. Meals, vehicles, and utilities are great places to look for unnecessary expenses that can be trimmed. Make it a point to write down a list of items you need when you go to the store and don't get one thing that's not listed. Many people overspend simply because they buy things they think they need or use, but don't.

Pay Off Small Debts First

Normally, it's a good idea to pay off your highest interest debt first. However, since you don't see a monthly benefit to paying off debt until the balance is gone, start with the smallest balances instead. That way, the extra money you save each month will help you weather your current financial storm.

Speak With The Experts

If money is tight, the last thing you want to do is spend more of it on financial advice. That said, experts will be able to plan an individualized path and a budget to get you through your current issues. The upfront cost is well worth it in terms of strategic planning and peace of mind. Financial experts can advise you on the best solutions to your financial issues, like credit card debt, bankruptcy and more strict budgets. 

Sell Unnecessary Items

A financial crisis is a great opportunity to simplify your life. There are likely a number of valuable objects in your home that you no longer need. Consider selling jewelry, televisions, and even second vehicles if they aren't truly necessary. You can do this at a garage sale, or through your local classifieds online. For items that are worth more, don't be afraid to wait for a better offer. Getting your money's worth on a car is often more important than selling it quickly to a first bidder. 

Ask Family For Support

No one likes to ask their extended family for a loan. Your family and friends are probably worried about you though, and are a great resource when financial times are difficult. Just remember--if you feel uneasy about asking them for help, just be sure to help them when the situation is reversed. You don't always have to ask for money to get support though. Consider staying with relatives for a short while if you can't afford rent, or let them provide more dinners for your family.

A financial crisis is a difficult, frightening event that no one wants to experience. While it can be scary, these tips can help you overcome your financial issues and get back to normal life in no time.

Informational credit to Paddon & Yorke Inc.

Save Savvy: Tips for Calculating the Cost of your Retirement

When it comes to planning for the future, one of the main concerns for most people is saving enough money for retirement. With social security, inflation, and the rising cost of health insurance, there are many factors that determine the amount that is needed once entering the golden years. To determine the amount you'll require for retirement with accuracy, there are a few tips to follow to ensure that you can live comfortably.

Look at the Tax Rate

When calculating your retirement, it's important to consider how your money will be taxed. It may be easy to look at a marginal tax bracket, but your income will likely be taxed less and in the 25 percent tax bracket. Use an effective tax bracket rate online rather than depending on a marginal tax bracket to ensure that your numbers are accurate.

Consider Inflation

The cost of inflation will affect how much you'll need to live off of during retirement and should be accounted for to ensure that you can keep up with the rising cost of living. According to Forbes.com, the cost of living in your first year of retirement will likely increase by the fifth year of your retirement. Use an inflation rate of three percent and multiply your income from the prior year by 1.03.

Factor in Assisted Living

Although you may currently be healthy, it can be difficult to expect what age will bring once entering retirement. When calculating how much money you'll need in the later years of life, factor in the cost of assisted living or a live-in nurse to ensure that you receive the assistance needed if your physical or mental health declines according to Sunshine Retirement community.

Determine the Rate of Return

Most people use five to 12 percent of average annual returns after investing during their life, but there are a few factors needed to determine an accurate rate of return and how it will impact what you'll have in retirement. Consider the investment time period and if the rate of return takes inflation into account.


When it comes to calculating the cost of retirement, there are a few factors that will determine how accurate you come to finding the cost of leaving the workforce. Although it's easy to consider the cost of housing, utilities, and general expenses, there are a number of other influences that determine how much you'll need to live comfortably and enjoy the fruits of your labor. Look over here to find out more information about how much living in a retirement community costs.

Mortgage FAQ For First-Time Homebuyers

When you venture out into the world of the first-time homebuyer, it stands to reason that you’ll have a lot of questions during the process. Most first-time homebuyers don’t know much, if anything, about the process, the terms or how to get the best deal for themselves.

Everyone knows that buying a home is a big financial obligation, so here’s a quick mortgage FAQ for those of you doing it for the first time.

Where Should I Go?

This is often the first questions a first-time homebuyer has about mortgages. With only a little searching you can find countless options and they all look tempting. So, what do you do? Don’t rush, that is the first thing, then decide if you think bank, credit union, private lender or trust company would be the best choice. Sometimes, seeing a mortgage broker will point you in the right direction.

What Is Mortgage Pre-Approval?

A mortgage pre-approval is a process where your lender approves you mortgage at a specific amount ahead of time. This approval is based on several factors and it helps homebuyers know where to look, because they have a general idea of what they’ll be able to afford and what they won’t.

What Is a Down Payment?

Even the most novice of homebuyers has heard the term “down payment” before. Just as it seems, a down payment refers to making a lump sum payment upfront, that will come off the total price of the home. A conventional mortgage requires a 20 percent down payment, while a high-ratio mortgage needs 5 percent.

How Much Can I Afford?

Your pre-approval amount can often give you an indication of how much you can afford, but not always. Sometimes, the lifestyle you want isn’t really possible if you assume a mortgage for that much. Some lenders or brokers have calculators that will help, but it’s really about working out the money in vs. money out and see what number works best for you and your family.

What is a Fixed Mortgage Rate?

A fixed mortgage rate comes with a static interest rate for a specific amount of time, or term. The most common term is five years, and this means you don’t have to worry about the interest fluctuating during that time.

What is a Variable Mortgage Rate?

On the other side, a variable mortgage rate is a mortgage that does not have a rate guarantee. The rate you pay fluctuates according to the lenders Prime rate. Sometimes this is good and sometimes it isn’t, based on which direction that Prime rate moves.

What are Closing Costs?

Closing costs are part of every home purchase, and they are payable after the purchase is finalized. Some of the most common include:

• Legal fees and disbursements
• Title insurance
• Land transfer tax
• Property survey
• Property tax adjustment

Home inspection, moving costs and other miscellaneous expenses like tools and appliances will also be part of the process. 

What Do Amortization & Term Mean?

Amortization is the period of time in years that it will take you to pay off your mortgage in full. Term is the length of time your interest rate type (fixed or variable) will last. When the term is over, you pay the balance of the mortgage or renegotiate a new term under the current market conditions.

Author Bio:
The author of the article is Jeremy Benson. He has been writing about finance, mortgage and Canadian law since 7 years. Blogging is one among his greatest passions. Follow him on Twitter@jeremybenson19.

5 Unique Ways to Make Extra Cash

Times aren’t like they used to be. The economy and job market are constantly changing. Many people are struggling to find employment and make a decent living. For some, this task seems almost impossible and nearly everyone is strapped for cash in these days after the deflated credit bubble. Getting a part-time job or babysitting are common ways to make money, but if you're short on time, try these unique ways to make extra cash.

1. Clean out your garage on Craigslist. The yard sale is being rendered obsolete in favor of selling unwanted items on Craigslist. The advantages are that you do not have to sit for hours in front of your house waiting for people to drop by. Instead, list your items on Craigslist, including a description of the item and a picture. You can have people contact you by phone, text or email. Before you list, take a look at what other people are selling similar items for to get an idea of a price.

2. Recycle scrap metal. Scrap metal makes a surprising amount of money at a salvage yard and nearly anything made of metal is eligible. Take a look at unused pipes, broken auto parts, garden tools, old weight sets, playground equipment and even something as large as an old camper. As long as it's metal, you can probably sell it for scrap. If you have auto parts that are in good shape, sometimes auto shops or auto maintenance stores will buy them from you, otherwise you are better off taking them to a junk yard.

3. Make stuff. It's easy to sell homemade items on the Internet these days, whether it's via Craigslist or a shop like Etsy, anything you can make that is unique and quality could rake in some extra cash. Sewn or knitted craft products such as quilts, pillows, stuffed animals or hats and scarves sell well. Another possibility is handmade soaps, body sprays, oils and perfumes. Craft jewelry such as beads and the like are also popular. If your expertise lies more in the tool realm, you can make barbecues, outdoor fireplaces or smokers.

4. Online crowdsourcing. Crowdsourcing has grown hugely in the last few years and there are now a myriad of sites available to perform a variety of small tasks such as surveys, research, translation and more. Sign up for one of these sites and make a habit of spending an hour or so every day getting some extra cash.

5. Sell your old video games. Ever think about selling your old video games? Did you know you can sell your old video games online? For example, you can sell Xbox 360 games online. You can also sell other games from Nintendo, PlayStation or other various counsels. Selling your old games can make you some extra cash. Some games for obsolete systems might even be considered rare and classic and can make you some extra money.

You can do most of this list in your spare time, days off or on weekends to easily supplement your cash flow. These are also odd jobs that your family can help you with or teach to your children to help bring in extra money for your family. They may not sound fun, but it is better to be bringing in some money rather than no money. There are also many other options out there as well. Just make sure you do what is best for you and your family, and what you are the most talented to do and you will be bringing in extra money in no time.

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.