Debt Control - How Not To Spend
7:58 AM, 2007-Sep-2
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When you've got yourself into debt you have to change your mindset if you're ever going to pay that money back.One of the causes of your debt burden is because you've always thought of yourself as well off. Rich even. You've probably earned good money and you've been in the habit of always being able to afford what you want to buy.
Your friends and family probably all have this lifestyle,too: abundance, conspicuous consumption, easy living.
Well, if you've cranked up more debt than you can afford to pay back, you're not rich, you're poor. No matter how well paid you are, if you're up to your neck in debt, your money isn't your own, it's your creditor's.
So you have to get out of the mindset of being rich and get into the mindset of being poor.
Which means budget control, frugality and self-control. Do as your parents or grandparents did: buy only what you need, go without anything that isn't essential and waste nothing.
Just try living a few days pretending to be poor. Just buy only what you absolutely have to have. Pay for it in cash. Leave your credit cards at home. If it isn't essential, don't buy it. Practice this for a few days and you'll get the hang of it.
Welcome to debt control.
Debt Care - It's All In The Mind
2:59 AM, 2007-Aug-30
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There's a mindset about money that can lead people into debt. In our lives there is an abundance of goods to spend our money on and we want it all. We want instant gratification and we use the abundance of credit to pay for it.Our mindset tells us that that is OK because we'll easily pay it back. If we can't pay for something outright it's just a cash-flow problem. The cash will flow.
Sooner or later the cash doesn't flow. There's not enough cash to meet the obligations. Interest rates mean that the debt gets bigger and before too long it's out of control. Time for a change of mindset.
Debt can lead to stress, anxiety, depression. People who have been on the financial precipice report that the pressures of debt can lead to thoughts of suicide.
You can get out of debt many ways: debt consolidation, debt relief, bankruptcy - even just getting another job and paying it down. But when you've done that, the secret is not to repeat the spending patterns that got you into debt in the first place. Be honest with yourself. Recognise your spending mistakes and resolve not to repeat them. That's the route to being debt-free.
Debt Care
Debt Advice - The Real Debt Trap
11:11 AM, 2007-Aug-28
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Debt consolidation is a big step towards getting out of trouble with debt, but it can actually be a trap that gets you deeper into debt.How come?
Well, it's a sad truth that the majority of people who consolidate their debt find themselves owing more two years later than they did before they took out their debt consolidation loan in the first place.
This isn't because debt consolidation was a bad idea. It's because they kept on spending. They stayed with the same habits that got them up to their neck in debt in the first place. Buy now, pay later. I want it now - I'll put it on the plastic.
This is the real debt trap. If you take out a debt consolidation loan but you don't have a budget plan in place you'll end up in more debt. And the options open to you get fewer. It's going to be harder than you think to get another debt consolidation loan once you've already got one.
If you genuinely want to pay off your debts you've got to vow to use all your spare money paying down your debt consolidation loan and not to buy anything on credit unless it's a genuine emergency. This debt advice is tough but it's necessary. Cut up all your charge cards. Cut up all your credit cards but one and don't carry that one around with you. Use that one only for essential expenditure.
When you see your debt consolidation loan amount going down, month by month, you'll know it's worth it.
Clear Debt - How To Avoid The Debt Trap
8:03 AM, 2007-Aug-25
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Money can make you feel good, and money can make you feel bad.When you spend the money and you get something you really, really want, you feel good. It's great to be acquisitive and materialistic: it's good to own things and show off stuff and parade your lifestyle to the world. But if you've bought the goods on plastic, on borrowed money, there comes the day when the spending has to stop. And that's when money makes you feel bad.
If you can't control your spending then you're heading for the debt trap. The debt trap is when the money you owe is greater than your capacity to repay it. You've got more credit card bills than you remember. The mortgage has just gone up. Your car is still costing you a bomb. And the household expenses only ever go up. How can you get out of the debt trap? If you can only pay the minimum on your credit cards, your debt is getting bigger not smaller, and you're not even buying anything...
Here's where debt consolidation is a sensible way of getting back into control. Rolling all the debts into one big loan where the repayments would be less than paying them all off separately - that's debt consolidation.
But don't believe the ads that promise 'debt elimination'. Consolidation won't 'eliminate' your debt: you've got the same debts as before, but you've rescheduled the payments to make it easier to pay.
And that's where the next trap lies in wait: You've got your payments under control, you're set to clear debt, but without a budget you're going to carry on spending. More on this next time.
Bankruptcy Alternatives
10:03 AM, 2007-Aug-18
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Bankruptcy is a very serious step, and you should only use it as a last resort. Bankruptcy stays on your credit report anywhere from seven to ten years, companies can legally refuse to hire you, and you could be denied security clearances or licenses. Investigate your alternatives first.The type and amount of debt you have are important in determining the alternative to bankruptcy best for you. It may be that you will have no choice but to file bankruptcy, but explore your options first. A financial advisor can help you decide the best course of action.
Which Bankruptcy Chapter Should I File?
You are in financial trouble and have already investigated the alternatives to filing bankruptcy. There doesn't seem to be any other solution to your financial woes. Now you are wondering what chapter of the Bankruptcy Code to use: would chapter 7 be better than chapter 13? It all depends.The new bankruptcy law has narrowed the ability to pick bankruptcy chapters. You may find you really don't have any choice at all about which chapter to use. To be sure you know all the options available and what's best for you, consult a specialized bankruptcy attorney or financial advisor.
Why You Need A Bankruptcy Attorney
If you need to file bankruptcy, or even if you're just considering it, you need legal help. Why?The 2005 bankruptcy laws have made it much more complex to file bankruptcy by yourself. It is now very much more involved than filling in a few forms and having your debts rubber-stamped away.
And, because it is now more complicated, the risks of getting it wrong are greater. If you make one mistake in the filing process it could cost you dear. You could unwittingly break the law and be worse off than you would have been if you'd had an attorney.
There is now a scheme where people facing bankruptcy can be put in touch with an attorney near them for an initial, free, consultation. The attorney can advise you whether you should file, whether there are alternatives, and how you should proceed.
Avoid more trouble by finding a bankruptcy attorney here >>
Can Debt Consolidation Eliminate My Debt?
Can I get debt consolidation to eliminate my debt?NO, YOU CAN'T! The only thing debt consolidation can do is to RESTRUCTURE your debt, not make it disappear.
Debt consolidation doesn't eliminate debt, it simply moves the debt from one place to another. The debt is still there and you still have to pay it back.
What debt consolidation can do is to remove the pressure. If you have maxed-out credit cards, unpaid bills, creditors bothering you, then debt consolidation can make all that go away.
If you have a house with some equity this is the easiest way to restructure your debt. You can refinance your mortgage to borrow more so that you can pay off your debts. Then you have a slighly bigger mortgage to pay but your debts have cleared.
But don't use that as an excuse to let your spending get out of control again. You will only eliminate your debt (and that includes your mortgage) by not spending more than you earn and by using any surplus income to pay off what you owe.
Chapter 7 Bankruptcy
You've considered the alternatives and now you're thinking about filing bankruptcy. Here is some general information that will give you an idea of what to do and what happens under chapter 7 bankruptcy. For advice for your particular situation, it's always a good idea to consult a bankruptcy attorney.This gives you a general outline of what happens in chapter 7 bankruptcy. You may find that under the new bankruptcy law, chapter 7 is not available to you. If this is the case, you probably need to look into how chapter 13 bankruptcy works and see if that's what you need to do.
Bankruptcy For Marrieds
Even though bankruptcy isn't a walk in the park if you're single, it gets even more complicated when you're married. If you're married and think you know who owns what, you may need to think again in the event you file bankruptcy.My advice? Get an attorney. You can usually get a free initial consultation with a bankruptcy attorney.
Whether you're married or an ex-spouse, this information should convince you that you are better off to hire a bankruptcy attorney to help file bankruptcy. You may think you know who owns what and who's responsible for which, but you may be unpleasantly surprised if you don't have legal advice.
Too Many Bills, Not Enough Income
Debt can creep up gradually. All the while it doesn't hurt, you don't notice. But then, one day, the money has all gone before the bills have been paid. And somehow, you never can catch up.Slide down this slope too far and you could be heading for bankruptcy.
Consolidating your debt could be a good one-time fix to get you back into financial balance. A good place to try for a debt consolidation loan is your bank.
An unsecured debt consolidation loan is just signature a loan like any other. Since it doesn't have collateral, you can't lose your house or car if you have trouble making payments.
This is mostly for people that have decent jobs, good credit and just got careless with their debt. The bank is just repackaging their debt for them. Since it isn't secure, you pay a higher interest rate for the privilege.
This is also a good option for young people that just graduated college with good jobs and realize that five credit card payments are too much.
Rebuilding Credit Score After Bankruptcy
You completed your bankruptcy filing and now you are concerned about how you are going to reestablish your credit. Whether you used chapter 7 or chapter 13, you are now between a rock and a hard spot. Read on and you'll see here how to rebuild credit after bankruptcy.After going through the hassle and trauma of bankruptcy, it's natural to be attracted to an offer of a quick fix for your credit rating. Resist the lure of the advertisements. No one but you can repair your credit by handling your finances with care, promptness and patience.
Positive Or Negative Cash Flow?
All of us incur debts from time to time. It is normal to purchase items on account and pay for them at a later date. The point where we run into trouble is when we overextend ourselves and owe our creditors more than we can repay.Do You Have A Positive Or Negative Cash Flow?
The definition of a break-even point is when the amount of money you are paid every month covers your expenses exactly. The two numbers would be equal in this case. When you end up with more money than you have in expenses, you have a positive cash flow for that month. Otherwise, you have a negative cash flow, and you may be borrowing money to make up the difference.
You probably have a good idea of your salary, or take home pay every month. You need to add up the total of your credit obligations and compare it to your salary. Hopefully, you are bringing home more money than you have outstanding in credit card debt. If this is not your situation, you need to get professional help from a debt counselor immediately.
If you have a negative cash flow, you may also be headed for trouble financially. You should seek help with debt before you borrow yourself into deep debt.
Getting A Mortgage After Bankruptcy
Just because you had to file for bankruptcy, you don't have to give up the dream of owning your own home. Bankruptcy in your credit history can make it harder and more expensive, but that doesn't mean it will be impossible for you to get a home loan.See here for some advice on getting a mortgage after bankruptcy.
All hope of owning a home is not lost if you have filed bankruptcy. You can work to rebuild your credit. There are mortgage lenders who will work with you. You may have to save longer, pay more, and wait a while, but you can eventually own a home.
Filing Bankruptcy Protects You From Creditors
One of the nice things about filing bankruptcy, if anything at all nice can be said about it, is that your creditors have to leave you alone. When you file under any chapter of the bankruptcy code, a stay against any action by creditors immediately goes into effect.The automatic stay granted when you file bankruptcy does not mean you are free of your creditors forever. Some debts may not be discharged, and some debts may not be covered when the stay expires. It's always a good idea to have an attorney to help you with your bankruptcy.
Preparing For Chapter 7 Bankruptcy
If you know what paperwork is required and have it available, you will save your bankruptcy attorney's time and keep your legal fees down. The information provided here may not be a complete itemization of what you need to file bankruptcy and/or what your attorney may require but it should help you prepare for chapter 7 bankruptcy.If you fail to submit required documents, your bankruptcy case may be dismissed by the court. You are free to file bankruptcy without the help of a lawyer, but even if you prepare all the documents yourself, it would be a good idea to have a bankruptcy attorney review them.
Preparing For Chapter 13 Bankruptcy
Just as with the documentation required for bankruptcy chapter 7, you save the attorney's time and yourself money by having information and/or documents available when you consult a bankruptcy attorney. You can either complete the documents yourself and have the attorney review them or have the attorney complete them.Even though preparing for chapter 13 bankruptcy is more complicated than chapter 7, you can still save money by doing as much of the paperwork as you can. If you are really strapped and unable to afford a bankruptcy, check around for free or low cost legal aid to assist you.
Costs Of Filing Bankruptcy
The old saying is that there is no such thing as a free lunch. It even holds true for filing bankruptcy. At the minimum, you will have to pay the court filing fees which depend on which chapter you file under. Other costs such as legal counsel, or bankruptcy aids vary.See here for information about costs of filing bankruptcy.
If you can't find a way to pay the bankruptcy filing fee, the court may let you pay in installments. If your income is less than 150% of the poverty level defined in the Bankruptcy Code and you can't even pay in installments, the court may waive the fee.
Minimize the Debt In Your Life
The goal of debt consolidation is to, eventually, minimize the amount of debt in your life. There will probably be some debt that you cannot remove, like your mortgage. That's okay.By reducing the number of bills you have to pay each month, you may be able to decide what you want to do with your money.
Working out your financial standing and making that into a plan is not a quick process. It takes hours.
Debt consolidation without this process will not help your monthly predicament, so it is worth the time.
Debt consolidation without consideration is just another loan. Debt consolidation with careful planning can be your ticket to financial freedom...
Bankruptcy - Will I Lose Everything?
One of the biggest fears people have about filing bankruptcy is that they will loose everything they own: house, car, retirement fund. What you can keep if you file bankruptcy varies a great deal. It's one reason it's a good idea to consult a financial advisor and/or bankruptcy attorney.Don't dig your financial hole any deeper because you are afraid to lose your house or car. It's more than likely you will be able to keep your property, but keep in mind that filing for bankruptcy doesn't mean that you won't ever have to make any more payments.
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