Alternatives To Bankruptcy

Author: Natalia Kobseva

As anyone who has seriously examined Chapter 7 bankruptcy protection knows all too well, filing bankruptcy may be the absolute worst thing that borrowers can do to improve their financial position. For desperate folk suddenly realizing that there is little they can do on their own to achieve debt relief, bankruptcy might seem like an attractive possibility. After all, from our earliest memories, Americans are taught to respect bankruptcy as the (for whatever reason) dignified end to debt crises. Whether playing board games or watching cartoons, we’re taught that bankruptcy is just what is supposed to happen once any borrower has debts that they can no longer responsibly manage. In our culture, bankruptcy is simply expected to be the final debt solutions to personal economic strife. Even as the nature of consumer debt changes from hospital bills and department store accounts to the burdens of credit cards too easily granted and too quickly filled to their limits, bankruptcy maintains a mythic allure as an all-inclusive cleanser for financial woes.

Much as the debt protection of bankruptcy may have seemed a godsend for the generations that came before, there are now any number of new bankruptcy alternatives available for those debtors who have faced financial misfortune. More to the point, once a consumer takes time to fully analyze the Chapter 7 bankruptcy program, they may very reasonably wonder whether or not bankruptcy would be the correct choice for any debtor regardless of their own situation. Successfully filed and discharged, bankruptcy protection could indeed offer consumers new beginnings. In the best scenario, the fortunate borrowers could even start their financial lives over from ground zero, but that is only after they have suffered a harrowing ordeal that risks the utter ruination of their credit rating as well as the potential loss and seizure of any even vaguely valuable possessions.

The relief that people may feel when entering the bankruptcy program is understandable, really. Given that most borrowers seriously considering bankruptcy have already had to deal with (the sometimes hourly) harassment from bill collection agencies and watch their mailbox fill to bursting with past due notices from credit card companies, it is not that surprising that the average consumer – struggling to pay their credit cards and other debts – would jump at the chance to have a specialist take over their affairs. The very idea that debtors would no longer be held responsible for their actions alone comes as a sort of salvation that impels otherwise cautious heads of household to essentially hand over the reins of their economic futures. Certainly, the bankruptcy lawyers charging more and more outrageous fees are not going to argue against what may as well be thought of as their own product. Despite the amount of time the lawyers may spend with their clients (they are paid by the hour, as you probably know), very few attorneys will spend even five minutes counseling borrowers about exactly what they are getting themselves into. Eliminating unsecured debts (credit cards, primarily, as these things tend to go) should be a priority, but wise debtors must recognize the limitations of bankruptcy protection under the current statutes. Above all else, they should know not to trust their attorneys for advice beyond their specialty.

To learn more about Federal Debt Relief Program and how to get started, please visit DebtRelief.bz

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The first rule of making a personal budget – keep it simple

Author: Thomas Berten

Rules. No-one likes rules. But we all realize that if we didn’t follow traffic rules and stop at a red light, our streets would be chaos. If you want to have a successful personal budget, you have to follow the rules (in this case one simple rule).

Many people believe that there are a lot of rules to follow when making a personal budget. People believe you must work on your budget every day, and keep track of every penny you spend, or else your budget won’t work. Most people think budgets are a lot of work.

Most people also believe that budgets are hard. They think you need to be an accountant to be able to create and maintain a personal budget.

Budgets can be a lot of work, but they don’t need to be, if you follow the First Rule of Making a Personal Budget: Keep it Simple. Yes, like a lot of things in life, the KISS rule applies to your personal budget.

Don’t try to create a complicated series of linked spreadsheets with fancy graphs and tables. Don’t try to master the most complicated personal budgeting software. Don’t believe that you have to go to school and study bookkeeping and accounting to make your budget work for you. Keep it simple.

Start with a blank piece of paper, or a blank spreadsheet, and make a list of what you spend money on every month. That’s right, you are not making a budget; you are making a list – how easy is that?

Most people can’t even make a list of what they spend each month, because they have no idea what they spend their money on. No problem. Keep it simple. Get a pencil and a piece of paper, and carry them with you everywhere. Whenever you spend money, write in down. At the end of a normal week, you will have a good idea of where you spend your money.

You could then take your week’s worth of notes and make a monthly budget. But, to make your budget even simpler, do a separate budget for every pay check, or make a separate column on your spreadsheet for every paycheck. That means if you get paid every week, have a column for every week.

Then, make a plan for how you will spend every paycheck. It’s much simpler to decide how to spend your paycheck this week than it is to try to budget for the next six months.

Read that sentence again: make a plan for how you will spend your money. That’s the only reason for making a budget. By keeping track of where your money goes, you can make a plan to spend your money where you want to spend it.

If you keep it simple, your budget will be a success. And remember, if you don’t follow this simple rule, your personal finances will be a mess, and you could have to declare personal bankruptcy. So keep it simple, because proper budgeting is the best personal bankruptcy alternative.

Article Source: http://www.articlesbase.com/finance-articles/the-first-rule-of-making-a-personal-budget-keep-it-simple-41946.html

About the Author

Jay Lewis writes about personal finance topics, including budgeting, debt, and bankruptcy alternatives. More information can be found on how to make a personal budget and bankruptcy alternatives at http://www.bankruptcy-alternatives-information.com

For some reason many Americans choose to ignore a pending personal debt problem. Possible many people believe that there is no escaping their debt situation, so they sit by while their debts deepen.

For most people the situation is not quite as bad as they may imagine. If you are feeling like debts are weighing you down, and you think that you cannot possibly escape the financial problems that are burdening you. Perhaps the solution would be t take out a debt consolidation loan.

A debt consolidation loan is suitable for all kinds of people, in all kinds of financial difficulties. It is most helpful for people who cannot make all the multiple monthly debt payments that they have accumulated.

It is a very easy situation to slowly add loans over several years. Without really paying too much attention as to how much the total is, that you will have to pay each month for all of those loans. At some point most people through no fault of their own find that they are unable to meet one, or all of their debt payments each month. The answer to the many people is to just hope that somehow the situation will improve. Or at least will not deteriorate any further, this is not a good way to plan how to get out of financial difficulties.

The road that some other people take is to start to miss one of their debt payments. In the hope that at some point in the future, they will be able to make up for missing two or three monthly due dates. The problem with the strategy there is that, not only are you not paying off your debt. You are also adding additional fees and interest, not to mention that this kind of non payment is extremely bad for your credit history. You will also find that in all probability you will never actually start to catch up with these missed payments. This kind of action and only end with a more serious financial situation.

The most likely outcome in the end will be either that you are forced, or you choose, to enter into bankruptcy. This is rarely a good solution, and should only be used in the most extreme circumstances. Bankruptcy will follow you around for many years to come, and will always cause serious problems when searching for finance especially on important loans, like a mortgage.

Finance providers tend to have a very long memory when it comes to people who have previously declared bankruptcy. You should never consider going into bankruptcy without first having a serious conversation with a qualified professional. Choosing bankruptcy when it is not suitable for your situation can be financially disastrous. A far more suitable proposition for most people with debt problems is to consolidate all the outstanding payments, debts and bills. And pay them all off at one time, with a low interest, debt consolidation loan.

Debt consolidation is simple and works by paying off all your existing debts. All your multiple debts will then be replaced by one single loan and one single monthly payment The first step you need to take is to locate a qualified online debt consolidation loan broker. This broker will be able to give you advice you about the steps you need to take to acquire a good quality loan, at a reasonable rate of interest. He will ask you to gather together all of the paperwork you have regarding your outstanding debts, as well as any current bills such as utilities, that you are struggling with a at the moment.

The broker will carefully go through all the paperwork to discover exactly how much you owe, and compare that to how much income you have. He may then be in a position to not only acquire a suitable loan for you. He will possibly negotiate with the companies you owe money to, and may be able to reduce the debts even before they are paid off. He will be very familiar with quality finance companies and banks that will be in a position to help you with a new low interest debt consolidation loan.

This is not an additional debt that will weigh you down; this new loan will be used to pay off all of your existing debts. Leaving you with just one new loan that will have a lower rate of interest. It will also be payable over a much longer period. These factors will greatly reduce the amount that you have to pay each month. The difference will be extremely noticeable on a month to month basis.

You should find that you will have sufficient funds to meet all your outgoings, without struggling to find the money to meet all those debt payments you had previously.

Many people want to know how they can avoid bancruptcy, it can be a difficult question to answer, especially when you have to consider the individuals unique circumstances. This article is going to try to give you the ten best ways to help you avoid filing for personal bankruptcy. This advice is just that, it’s not legal advice and it certainly shouldnt be relied upon. You should seek qualified legal advice before making any decisions about your debt.

1. Idealy you need to increase the amount of money you have available to you every month. The best, and fastest way is to get a second job. You will only be able to take a second job if your full time job allows this. Even if the part time job only gives you two hundred dollars a week, that mounts up to 800 dollars a month, this will go a long way to reducing your debt. Write down all of the debts that you have, put the ones with the highest interest rate at the top as you will aim to pay these off first.

2. You must stop using your credit cards, they are the source of your trouble. If you can bear it then cut the cards up so that they can never be used again. Failing that you could give them to your wife. A credit card is however good for emergencies, you should keep one, just one mind!

3. Take a look at all of your assets and decide which ones are worth the most. Normally people dont realise just how much the things they own are worth.Houses are scarce goods and so appreciate in value, this appreciation may help in reducing your debt.If you cannot cover all of your debt by taking out a second mortgage then dont consider using this step, it’s only worthwhile if you can pay everything off.

4. Unfortunatly cars are not like houses, 99% of cars depreciate in value. If your car is still worth something then would you consider selling it? Of course you will need a car, so buy a cheaper car. Just remember that you do get what you pay for. Paying for something too cheep could be a really big mistake. For more info see http://www.filingpersonalbankruptcyhelp.com/Bankruptcy_ExemptionsBankruptcy Exemptions.

This is by no means a concise guide to reducing your debt, these are simply a few possible solutions to your debt.

Take a close look at all of your assets. You may be able to assess the equity in your home or other asset so that you can pay off the other debt you owe. Don???t do this though if it is not realistic for you to maintain both your current mortgage and a second payment on the home. You don’t want to end up losing it. Your vehicle many have equity in it as well that you can take advantage of. There is also the option of trading your vehicle in for one that comes with a lower payment. Just make sure it is reliable so you aren???t constantly paying for repairs on it.

Many events may drive you to bankruptcy. Actually, except in certain situations, bankruptcy is nothing but the result of a buildup of unfortunate financial decision and unexpected events. Nevertheless, there are ways to prevent it and to keep debt at a reasonable level in order to maintain a healthy financial situation.

Planning Ahead

Unless you are a fortune-teller, you can not foresee what is going to happen in the future. Therefore, you should start preparing for the unexpected. It may sound pointless but the truth is that if you have enough savings you will be able to avoid getting in debt most of the time.

In order to be prepared for what may happen, you should always make a budget and stick to it as tight as possible. Within the budget you need to include all your income and expenses, including your debt installments and an average of credit card payments.

You should make a plan for reducing your debt progressively. If you can take a low interest loan to pay off your credit card debt, then you should make payments above the minimum in order to keep reducing your debt. You need to always pay at least a little more than the interest charged for financing.

An excellent idea is to leave round numbers in your balance. For example if the overall debt is $2423.15 and the minimum payment is $380.57 then, you can pay exactly $423.15, so the amount you owe would be $2000, which is an amount easy to trace in the budget.

Order Your Payments According To Importance

Even though the above idea is useful, you should always pay more than the minimum in your credit card balances. Moreover, you should pay as much as possible since credit cards carry the highest interest rates. First of all you should pay for essential services and expenses. But immediately after that you should try to cancel the highest interest debt.

Though you should check the interest rates charged along with any other costs and fees. The usual priority order according to the interest rate charged is: Payday Loans and Cash Advance Loans, Credit Card Balances, Personal Loans, Car Loans, Home Equity Loans and Mortgage Loans. If feasible, you should try to get rid of the first ones as soon as possible without neglecting paying the others, especially those who are guaranteed by an asset such as mortgage loans and home equity loans.

Consolidation Loans

If you can request and get approved for a consolidation loan, the main problem would be solved. You will use the money to cancel high interest debt like payday loans and credit card balances. Afterwards you should avoid incurring into more debt and you should always keep your budget balanced.

After Debt Reduction

After you get rid of your debt, or even when you have it under control you need to start putting some money aside in order to save for any unexpected event. This way, you will be able to avoid getting yourself into the vicious circle of debt again. If you ever need to use that money, make sure to rebuild your savings fast as soon as the unexpected event