Bankruptcy Info

Financial planning at the start of the year need only take a few hours, but the benefits could last well into the New Year. A budget that indicates every financial obligation for the year ahead can really help you to prepare your finances in advance.

A big financial obligation many people deal with is debt, both secured debts like mortgages and unsecured debts like credit cards, loans and overdrafts. In fact, the Bank of England’s latest ‘lending to individual’ figures show that unsecured debt totalled £207.5 billion at the end of November – so unsecured debts are a major feature in many people’s personal finances.

What’s the best way to deal with debt in 2012?

First of all, you need to calculate how much debt you have, how much you have to pay every month, how long it will take you to repay that debt, and the total interest you are paying. Include everything, even loans from friends and family.

As a recent press release from Gregory Pennington points out, the start of a new year can be an ideal time to do this – and to ask yourself some important questions about your financial situation.

Could I lower my monthly debt payments?

Can you afford your monthly payments? If you can, you may still be able to lower your monthly payments with a debt consolidation loan. This can also be a good way to simplify your finances if you have a good credit rating and a steady income to make the repayments.

Repaying a debt more slowly can cost more in the long run, but making smaller monthly payments can take pressure off a household’s budget and leave them with some ‘leeway’ to deal with unexpected expenses on a monthly basis.

What if I can’t actually afford my monthly debt payments?

If you can’t afford your monthly debt payments and your budget indicates you are overspending every month, you must address this as soon as possible and identify areas where you can cut back on spending. It may be necessary to strip your budget back to the essentials.

If you have gone through your budget and find you’ve spent money that you can’t account for, a spending diary may reveal where that ‘mystery money’ is going. Keep a spending diary for a minimum of one month (your spending will vary week to week). If you need some motivation to do this, consider that simple things like bottles of water and packets of biscuits could easily add up to £50 over a few weeks. Saving an extra £50 a month over the course of a year is roughly equivalent to a £600 increase in your take-home pay.

Sometimes, cutting back on our spending is all that’s required to bring our budget back into safe territory, but it you’ve tried that and failed, it may be time to get professional debt help. For example, debt management is an informal agreement with your unsecured lenders based on what you can afford to repay each month. Before you can enter into a debt management plan with your lenders, you need a personal budget to show them how much you can realistically afford to repay and how long it will take you.

Debt management can give you longer to repay your unsecured debts, with lower monthly payments. While this may cost you more in interest overall, and lowering your payments will affect your credit rating, it can still be the best way out of a difficult debt situation for many of the people who can’t afford their repayments anymore.

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A good credit score is probably one of the most important numbers in a person’s life, especially when it comes to managing his finances. A credit score can sometimes become a determining factor in a person’s loan application.

For instance, if you are planning to buy a new house, or a new car, you will find yourself checking your credit score. While you already have a general idea of how the credit score works, you may be unaware that there are some things that you may have already done that had a negative effect on your credit score.

For instance, closing your old credit card can possibly affect your credit score negatively. These old cards have probably been with you for more that five years and with that these cards probably have the most information about your credit history. By canceling your old card, you are possibly removing years of good credit history, which could end with you having a lower credit score.

Another example when your credit score could be negatively affected is when you shop around for low interest rates for a loan. For instance, if are looking to buy a house and are “rate shopping.” In this case, the credit bureau will treat several credit checks as one, as long as these checks were done in, say 45 days (for a FICO score). In order to prevent a negative impact on your credit score because of your “rate shopping,” it would be best if you can limit it to 2 or 3 weeks, just to minimize possible inaccuracies.

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Most partnerships and marriages usually have one partner taking care of “doing the books.” That partner would be in charge of balancing checkbooks and placing investments with the retirement funds, while the other partner (or spouse) usually goes with all the financial decisions made for the family or the partnership.

This however, can become a bad strategy for couples or partners for several reasons. For instance, what if the partner who “does the books” become seriously injured or worse, dies? This would leave the other partner grasping and not knowing what to do in terms of financial responsibilities. To avoid this, both partners in the relationship should be accountable and involved in all of the financial situations.

One way of being personally accountable in the partnership is to take part, or at least be knowledgeable, of your partner’s last will and testament. This would include asset distributions, beneficiaries and burial arrangements. The physical location of the will is also important for the partner to know because if the partner dies, the other partner will need to supply an original copy of the will for all disbursements of assets and other legal obligations.

Another way of being accountable financially in the partnership is being aware of all the outstanding debts both have incurred. Together, both partners should think of solutions as to how to pay off these debts or what to do in case one partner dies. Lastly, both partners in the relationship should have access to all accounts, whether it is the joint accounts or the other partner’s accounts. This is just being ready in case the worst (the other partner dies) happens.

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A good number of women who are in the retirement stage end up not being able to enjoy that part of their lives. Studies show that a significant percentage of women over the age of 65 are living in poverty. This number is even higher for women who are divorced or widowed.

With this fact, it is important that women learn to protect themselves financially. Especially when women come to an age where it is time for them to retire, they should be able to enjoy the results of all that they have worked for.

There are several strategies that women can implement in order to manage their own money. One strategy would be to save more money. By saving more, women should create three sources for their money. These three sources of money include personal savings, a social security plan, and a pension plan.

Another strategy for managing one’s finances would be to start saving earlier. Women, while at a working age, should start to dedicate a certain percentage of their income to their retirement savings. For instance, a 25-year old woman who saves 10% of her salary could end up having a million dollars when the age for retirement comes.

Continuing to manage one’s money even after a woman gets married is also a very good idea. Usually, when a woman gets married, she hands over the responsibility of managing her finances to her partner. However, it would be better if married women continued to manage their own money. This would enable them to keep their budgeting and investing skills sharp, which will eventually help them save money for the future.

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Filing for bankruptcy can be done by anyone. There are two different types of bankruptcy to file, and both of these types will apply to whether the party that will be filing is a business, an individual or a group or organization of people. Thus, before considering the option of bankruptcy, it would be best to have a basic understanding of what these bankruptcy types are.

Chapter 7 bankruptcy is also known as a liquidation bankruptcy and can be used for individuals or businesses. In this type of bankruptcy, the nonexempt property (luxury items or business assets) of the debtor is sold in order to pay his creditors. This type of bankruptcy accounts for almost 75% of all bankruptcies that have been filed.

Chapter 11 Bankruptcy is more suited for larger businesses. This is a similar type of Bankruptcy to Chapter 13, however, Chapter 11 has more requirements that need to be complied with. Chapter 11 Bankruptcy will be the more preferred option if what a debtor wants is a plan where he can pay off all his debts and re-establish creditworthiness.

Chapter 12 Bankruptcy is also known as a voluntary bankruptcy. This type is more suited for fishermen or farmers. Chapter 12 Bankruptcy allows a debtor to create a plan to paying off a part, or all, of his debts over a specific period of time. Chapter 12 Bankruptcy is less expensive than Chapter 11 Bankruptcy.

Chapter 13 bankruptcy is one that offers individuals a plan of repayment. Usually, the debtor is given three to five years to pay off his debt. Chapter 13 bankruptcy allows a debtor to separate creditors in a way that each creditor will receive a different percentage of payment from the other. In this way, a debtor’s own debts will be treated differently than the debts that he has accumulated with a co-debtor.

Of the different types of Bankruptcy, the two most commonly preferred are Chapter 7 Bankruptcy and Chapter 13 Bankruptcy. For help with any Debt info, and to find ideas and advice on how to avoid getting into debt, go to debtinfocentre.com.

We live in a financially turbulent world and it’s important to protect our incomes against all eventualities. ‘Income Protection’ is a good way of doing this – protecting us from further financial burdens associated with illness or injury.
‘Redundancy Cover’ is a practical way of protecting ourselves from a volatile jobs market; unemployment is a serious threat to all of us in the current financial crisis. Finally, ‘Life Insurance’ is an important consideration if you have dependants.

In the event of personal disaster we need to protect ourselves against further financial stress. We all have regular outgoing payments – mortgages, rent, credit card bills, council tax or just the money it costs to live our everyday lives. We need to adopt payment protection measures to assuage any financial discomfort.

Income protection can guarantee up to 60% of our income in the event of illness or injury. A comprehensive scheme will keep paying out until you can return to work or retirement. It may even contribute towards some forms of rehabilitation in getting back to work.

Redundancy Cover can provide a tax free income of up to 50% if you are made redundant. As the financial crisis deepens, all of our jobs seem less secure than they were in previous generations; a job for life no longer seems a modern day reality.

Redundancy Cover will provide you with a monthly income for up to 24 months or until you have found employment.

Life Insurance is an important addition to a comprehensive payment protection scheme. Life insurance can entitle you to a tax free lump sum or a monthly income for a given period.

Payment protection schemes give us peace of mind not just for ourselves but most importantly, for our families. We need to provide a buffer against any financial stresses that may be inflicted upon them through our own loss of income.

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Bankruptcy is probably one of the most unfortunate things that can happen to a person or a business owner, financially speaking. Being bankrupt has a negative connotation that can be hard to get out of. Thus, declaring bankruptcy should be considered carefully, with full knowledge about what bankruptcy will bring, both the good and the bad.

What Really Is Bankruptcy?

Defined, bankruptcy is a method for businesses or individuals of dealing with insurmountable debts. This method releases that business owner or individual from all of his accumulated debts and allows him to start with a clean slate.

Who Can Go Bankrupt?

Anyone has the possibility to go bankrupt, be it an individual or a member of a partnership or a company. However, because every person has a financial situation that is unique from the other, not everyone that finds themselves in similar situations will decide to declare bankruptcy. According to studies, about 1 in every 5 individuals decide to ask for help and declare bankruptcy.

Will Any Good Come Out of Being Bankrupt?

Despite the negative connotation, bankruptcy does have its advantages. Simply said, it is a person’s fastest way to get out of spiralling debts. Once an individual has declared personal bankruptcy, most of his debts will be written off. However, there are still remaining debts that he will have to pay, those that are not covered by the bankruptcy law. These debts include court fines, student loans, secured debts, child support debts, overpayments from state benefits, and awards from fraud and damages. Recently, the negative connotation of bankruptcy has been lessened, if only a little, because of the current difficult economy, and in most instances bankruptcy is not advertised anymore (unless it involves public interest).

Bankruptcy can be caused by a number of factors; such as financial failure, various other financial reasons or quite simply poor management.

Bankruptcy is often the final straw and the only way to make a fresh start. However companies should always try and improve their financial situation prior to filing for bankruptcy.

This can be done by devising a plan and looking into your outgoing payments. Making sacrifices is a must if you want to dig yourself out of a financial mess. For example do you really need that super sports car sitting in the drive? Selling an expensive object can release some needed funding that can be used elsewhere.

As well as secured debts such as your home and your car, another factor that often leads to bankruptcy are interest rates. Then there are the mandatory incidentals such as power to the home, phone bills, mobile phone bills, essentials and insurance cover.

All of the above are generally a must; however looking around at different interest rates and providers can make all the difference to your outgoing payments.

Credit cards are another reason many people often fall into debt. In affect you are spending money you don’t actually have and getting used to this can be easy. However not making the repayments can cause trauma to your bank accounts.

Cutting on your expendables is a must if you wish to get yourself back on track. These are generally the items many of us desire yet don’t actually need!

It may be know fault of your own that you are heading down the bankruptcy road; it could quite simply be the current day’s climate. There are however always steps that can be taken in order to make sure you make the best of a bad situation!

Having debts and not being able to afford paying them is difficult for an individual; in order to help you find a suitable way to manage your debts, log in to www.debtinfocentre.com and find a debt solution that will work for you.

Desperate times cause people stop to paying attention to details and they can be very easily be deceived by advertisements and promises regarding debt solutions that might seem appealing. In order to be safe from scams, people should always be well-informed before signing debt management agreements.

Common Debt Myths

When trying to pay their debts, people consider they are alone, but many people with different social status are in the same situation, selecting the solution which best fits their needs.
Myth: Many people consider that their only options for handling their debts are debt settlement and bankruptcy.

Truth: Besides bankruptcy and debt settlement, you can benefit from Individual Voluntary Arrangements – IVA, loans, remortgage, debt management, debt consolidation, debt consolidation loans, managed bank accounts and budget planning. In order to be able to choose the perfect option, you should first search for debt advice.

Myth: People who apply for IVA believe that up to 90% of the debt can be written-off.
Truth: Beneficiating from IVA means 0% interest and charges for up to 5 years; however, the purpose is to help you afford to pay your debts and a part of the debt is written-off, but the average is 50% and the highest is 75%.
Myth: People who have debts believe they will not be able to borrow money again.

Truth: If you manage to be responsible in solving your debts, your credit rating will improve and you will be able to borrow again. However, debt solutions like IVAs and bankruptcy stay in your credit file up to 6 years. If you have a debt management plan, you are eligible for borrowing money, but with higher interests.
Debts are necessary in life due to family’s needs or circumstances we cannot control. If you feel overwhelmed, you should visit www.debtinfocentre.com/loans for useful information and guidance.

Getting out of debt can be difficult to do, especially when you already accumulated quite a number of debts, paying your creditors can seem a daunting task. However, getting out of debt and being debt-free is not impossible to accomplish.

One step to getting out of debt is to not increase it. Stop adding more debt to the ones that you already have. One way to do this is to cut your credit card use, or cut them up altogether. If you are already in a lot of debt, one credit card can be used only for “emergency things” and those items that you are sure to pay off in a short time. This will be one way to control your spending.

Another thing that you can do is to record the money that you have spent and the things that you bought with your money. Having an accounting of your expenses helps you become a responsible spender. This will also help you be reminded of any debts that you have so that money can be allocated to pay for them.

In your record of expenses, it would be better to categorize them. Make a list of the things that are considered as “should have,” “must have,” and “would like to have.” Always prioritize those expenses that are under the “must have” category, which would include food and rent.

These are just some basic tips that can help you get out of your debts. Sticking to even one of these tips will be very helpful in working your way to being debt-free.