Bankruptcy Reader

Up to your neck in debt but don’t want to declare bankruptcy? Well, it isn’t necessary and neither is it desirable in some cases. If you think that, given time you can repay your debts, then you probably should look for alternatives. Debt consolidation is one such option. Simply put, in debt consolidation, you take another loan and use the funds to pay off your outstanding debts. Here are some of the benefits of a debt consolidation loan:

• It is repayable over a longer term at a relatively low interest rate. This means that the monthly repayments are lower.
• If you take a secured loan then the interest rate and payments may be even lower.
• Borrowing for debt consolidation immediately eliminates multiple debt payments. Most importantly, it doesn’t impact your credit rating; in fact it may help improve your credit rating.

Bankruptcy is not something that is confined to a certain class or type of people. Any time in their life even the richest man or woman can become bankrupt. Yes, today, more than ever before people are facing overwhelming debt problems and are going bankrupt. If you haven’t seen people afflicted by the bankruptcy epidemic, it’s not because their numbers have fallen but because most people don’t like divulging this fact. Many people in this situation feel embarrassed and do not want other people to know about it.

But one thing you must realize is that there is absolutely no need to feel embarrassed or guilty. If your financial situation is so bad that the only option available to you is filing for bankruptcy, go ahead and do it and then move on with your life. To get this whole episode past you, one of the most important requirements is a good bankruptcy lawyer who can help you with your bankruptcy filing. When it comes time to find a bankruptcy lawyer to handle your case, it is important you look at several different law firms to see who can handle your case in the best way possible for you. Bestsyndication.com reports:

There are many lawyers who practice bankruptcy, but not all of them are interested in the best outcome for you. Some firms are just interested in getting as many people through the door as they can without looking at the case or person filing for financial relief.

Read more: How to Find a NH Bankruptcy Lawyer

If your financial situation is in such a bad shape that nothing short of filing for bankruptcy will help solve your problems, then you better not take too much time deciding to do it. One of the biggest mistakes people make is to defer the decision to file for bankruptcy. According to bankruptcy experts, people tend to wait until it is almost always too late to do anything at all and sometimes, people filing for bankruptcy don’t even have enough money to pay for the mandatory counseling sessions.

Then, there are the mistakes that people make prior to filing, which drastically affect their ability to get a "fresh start". The most common such mistake is to use your credit cards. Why so? Well, you were probably unaware of these facts:

• If you incur debts for the purchase of luxury goods and services from a single creditor in excess of $500.00 within 90 days of filing, this debt is nondischargeable and you may have to shell out the money.
• Cash advances of more than $750.00 within 70 days of filing are presumed to be nondischargeable and may be found to be due and owing.

Another very common mistake people make is to repay the debts owed to family members. Remember: when it comes to repaying your debts, family members to whom you owe money are like any other creditors. A bankruptcy trustee can even reclaim any amount repaid to a family member within one year of filing bankruptcy.

Think you can reduce your debt burden and probably not have to file for bankruptcy. Good, so how do you plan to do it? Liquidate your retirement account? Don’t EVER make that mistake. Retirement accounts are generally protected. You can eliminate your debt and keep whatever you have in an ERISA qualified account, free and clear.

There are many more mistakes but the biggest one would be to not tell your attorney the truth. In a worst case scenario, failure to notify your attorney about your assets may even lead to the loss of those assets, denial of your bankruptcy case, fines, or even imprisonment.

Did you know that there are people who take advantage of the bankruptcy provisions? There are some people who may be slow to pay their bills. So, what do they do — transfer their assets into some other person’s name and declare bankruptcy in order to avoid paying their creditors. Businessweek.com reports:

Unfortunately, this kind of scam occurs all too often, and small businesses sometimes end up victimized as a result, experts say. Even when an outfit declares bankruptcy legitimately, smaller companies like yours are typically listed as unsecured creditors and get low priority when it comes to payment of the debt.

Read more: How to Fight Bankruptcy Scams

I know it is pretty odd to talk about ways to control debt when you are contemplating bankruptcy. However, maybe you are not so badly off and a little financial control may help bring you back from the brink. Contrary to popular belief, it is not only spendthrifts that are caught in the debt vice. Common folks like yourself can also make the mistake of taking more than what you can repay. It doesn’t happen at one go.

When you take a loan initially, it is with the knowledge that you can repay it. However, over time as the number of loans increase, you will find that you are in no position to repay the money. There is no point in feeling frustrated and confused. It doesn’t help you repay your debts. What will help are these few tips, that if used correctly, can help you get out of the trap.

The first thing you need to do is create a budget for yourself. Add all your income, payments, expenses and everything else that involves money. This will help you check wastage. In case you are not too good at creating a budget, you can use BudgetMap or Myelopes Personal.

Your budget will reveal all those seemingly small and inconsequential expenses that are not necessary. Cut them and see how much you save. Another thing you need to cut is credit card purchases. Make it a habit to pay cash. This will limit your expenditure tremendously.

Create a repayment fund and remember to keep some money aside for this fund. It may seem small and inconsequential in the beginning, but it will slowly build to an imposing corpus. Any excess cash should be added to your repayment fund.

Limit unnecessary expenses like entertainment. It may seem difficult but remember, you are not totally eliminating them, and you are just controlling these expenses until you’ve paid off all your creditors.

Create a list of creditors in the order of urgency of repayment. So creditor number 1 should be repaid first. Once you have saved up enough in your repayment fund, pay off your creditors one by one.

Debt and its associated problems can make you begin to feel that life shouldn’t be so tough. You are forced to deal with all kinds of entities that range from the company (or companies) to which you owe money, to debt counselors. And if you are too deep in debt then you probably will have to consider bankruptcy as a serious option. And if you do, then there are innumerable problems associated with that as well. Now especially, before and after you file, you need to go in for credit counseling and may have to pay fees you can ill afford now. All this does leave you a bit discomfited. So, is there a way to avoid these problems?

The only way is to keep a look out for those warning signals. It is never a simple slide down into debtsville. You will sight numerous red flags on the way, which scream at you to stop and turn back. You just have to heed this advice and turn back before it’s too late.

Authors Note: If the primary reason you are concerned about bankruptcy at this moment is that you have been injured in a Jones Act related case in which you were working out on a ship or rig in international waters then you should contact a maritime lawyer. If you happen to be in or around the Houston area, you may instead want to contact a texas maritime accident attorney.

So if your spending capacity is higher than your earning capacity, then the first thing you need to do is ground your credit card. Lock it in the deepest drawer and throw those keys away. Agreed it is a difficult proposition, but who ever said that getting out of debt was an easy task. But if you can curb those desires, you will be encouraged to spend only what you have and no more. So, if you have $20 in hand, you will not be tempted to buy something that costs $25.

Another simple trick is to enforce the saving habit. Every month, set aside a fixed amount of money for paying off your debts. Once the month is through and you still have the money, you can begin paying off your creditors, one at a time.

Falling into a debt trap is one of the easiest things for most of us. Have you ever thought why it is so? If you ask me, I think the main reason is the fact that there is a lot of money to go around. Easy credit available all round the clock everywhere is allowing people to take money from multiple creditors. The result? It begins with a difficulty to repay the creditors, then slowly you enter into a loop — borrow money from one creditor to repay the other creditors. And finally, there’s bankruptcy.

The picture need not be so bleak. If you are finding it difficult to repay your debts, try debt management. Simply put, debt management is a process, which allows you to slowly reduce and eventually eliminate all your outstanding debts. For this, your assets need to be carefully managed and there has to be regular and proper dealing with your creditors. Focus on clearing the debts first. Reduce the debts in a manner that is most convenient to you. This means you don’t need to sacrifice too much of your regular expenditures but only need to be more careful.

If you are a self-employed person, then you very well realize the importance of credit– it helps you get your business started, and also to expand it. But taking loans means there is a repayment factor and sometimes, the numerous loans are not easy to tackle. In the past year, consumer credit, or non-mortgage loans to individuals rose $4.4 billion, or 2.5 percent at an annual rate, to $2.174 trillion. While these figures may seem just that — figures — they hide the story of a growing number of people who are deep in debt and find it difficult to repay their loans. When your loans become larger than your repayment capacity, it could create a dangerous situation for any business because as every small businessman knows, cashflow problems have sounded the death knell for many a small business.

Some simple methods of improving cashflow include meeting your own debtors. If you need to repay your creditors, your debtors must pay you first. Meet people who are using your services on credit. Discuss with them modes of repayment, including installments and deadlines. This exercise will also help you weed out the bad debts. It will also give you an idea of how much of your finances you can expect to get back.

One very important thing is to keep paying for services like utility bills, water rates, rent. This will help you convince your creditors that you mean business and that you plan to honor your debts and repay all the loans. And if necessary, go in for some expert help and, possibly, even counseling. You can try the many credit counseling associations listed with the Association of Independent Consumer Credit Counseling Agencies for more help.

Title sounds cool doesn’t it? At least I think it does and the matter ends there! Well, if only you could force your decisions on your teen in such a simple manner. Sadly, life isn’t so easy and we’ve got to inculcate values into them without ending up looking like dictators. One area where discipline is an absolute must is finance and you just cannot go slack with your teen on that front. Agreed, our’s is a generation that hasn’t seen much discipline on that front but that doesn’t mean we cannot teach our children how to handle their money. In the process, we may end up learning a few things about money management ourselves!

One of the most important things you can do is become a role model. You can lecture them until you are hoarse or you can lead by example. Agreed that debt is an integral part of life today and you cannot escape it. But the least you can do is try to stay out of debt as far as you possibly can. If you show your teen that money matters to you and that you are scrupulous with it, chances are, they will catch on fast.

In a debt trap and cannot see any way out of it? Don’t worry you are not alone. Contrary to popular belief, it is not only spendthrifts that get caught in the debt vice. Common folks like yourself can also make the mistake of taking more than what you can repay. It doesn’t happen at one go. When you take a loan initially, it is with the knowledge that you can repay it. But over time as the number of loans increase, you will find that you are in no position to repay the money. There is no point in feeling frustrated and confused. It doesn’t help you repay your debts. What will help are these few tips, that if used correctly, can help you get out of the trap.

The first thing you need to do is create a budget for yourself. Add all your income, payments, expenses and everything else that involves money. This will help you check wastage. In case you are not too good at creating a budget, you can use BudgetMap or Myelopes Personal