Bankruptcy is the New Old Thing

Bankruptcy has always been a way for consumers to dip out of their obligations with creditors. It used to be so that anyone could file for a Chapter 7 when way over their head in debt and be free of worry. When filing for a Chapter 7, your assets are dissolved and given to your creditors as compensation, then whatever other debts you have became null and void. So if you had a student loan, mortgage or credit card debt, they would easily disappear, giving you a new beginning. But since 2005, this has since changed thanks to the Bankruptcy Abuse Prevention and Consumer Protection Act.

This means that the law has to work harder to ensure that consumers aren’t abusing their rights to file for bankruptcy, by making is very inconvenient. The goal is to prevent consumers from running up their debts and using bankruptcy as a shield from having to pay them. There are new requirements for consumers who’d wish to file for bankruptcy, such as mandatory credit counseling, audits, “means tests”, which make sure that you aren’t hiding wealth, high filing fees and a ban that prevents consumers from filing for bankruptcy again within 8 years. If these terms are met, then the consumer will have to file for a Chapter 13, which means you won’t get away squeaky clean from your debts. This will require you to set up a 5-year payment plan with your creditors .

Since these new rules have taken place, there has been a slight cut back in bankruptcy filings by consumers. To give you an idea, between 2001 and 2004, there was about 1.5 million people in the U.S. filing for bankruptcy annually. But since the economic disaster we’re facing, the numbers of filings have been increasing again. Here is a visual of how things were looking during 2010:

What Happens After Bankruptcy?

Once you have filed for bankruptcy, you will have to endure the long process of rebuilding your bad credit. You don’t really have many choices, except for secured credit cards, which is a good option after filing a Chapter  or 13. With the secured credit card, you will be required to put upfront collateral, usually around $300-1000, allowing you a credit line that is equal to your collateral. The card issuer holds on to your money until you’re ready to close your account with them. You are responsible for paying your bill monthly, or you’ll face interest rates like with a regular credit card (putting you back in debt).

If getting a secured credit card sounds good to you, we recommend that you consult with your local credit union or bank, since they are more likely to give you more affordable fees and rates than those you’ll find on the Web (take a look at our wall of shame for an idea of what to stay away from). Top banks like Wells Fargo and Citibank allow you to trade in your secured credit card for an unsecured credit card after 1-1.5 years of doing well. The popularity of prepaid debit cards have surged, but we don’t recommend them for your credit building. But if worse comes to worst, you can opt for them to help get you out of your bad credit pit.

If you’re trying to stay out of bankruptcy, it’s important to have good financial habits. This includes bargain shopping. You can find deals from Groupon to shop at places like American Eagle, JCPenney and Nordstrom.

Should You Go For a Reloadable Debit Card?

Before you know it, the holiday season will be upon us, and you’ll be scrambling to purchase the latest toy or gizmo for your loved ones. If you’ve got to shop for gifts, it’s best to do it online because you’re far more likely to save money in the long run. You can take advantage of a wealth of coupon and discount codes that will offer you big savings at your favorite stores, and there are many sales and specialty items you just won’t find in person, thus limiting your ability to save on a range of items.

Some retailers also offer second hand and homemade items that are also much cheaper than alternatives, so it’s a good idea to keep an eye out this holiday season so that you’re not going into debt. The holidays can be a magical time for everyone, but it’s best that you don’t let the grab of consumerism envelop you or you might find yourself digging hard into your pockets for extra money to spend that you can’t really afford. You can have a wonderful Christmas without spending your last on exorbitant gadgets that your friends and family don’t really need.

Instead of using a credit card, it’s also a good idea to order a reloadable debit card if you don’t already have one. It’s all too easy to overspend on a credit card, and if you don’t have the money to pay it back you can easily accrue debt that will hurt your credit score. A debit card will resolve this issue while still giving you freedom to make orders online.

You can also set up your debit card to receive direct deposits from your workplace so that you don’t have to manually deposit money each week.

Youth Unemployment And The Spiral of Debt

The forecast for the UK economy is not looking positive, with tepid growth predicted for the forseeable future. Businesses will remain cautious when hiring new workers during this difficult  period, casting a long shadow over unemployment figures. The effects of joblessness at any age can be a source of considerable anxiety; none more so than among the younger generation.


Photo courtesy: xJason.Rogersx (Flickr)

The damage will last for a generation

Studies carried out by the Office for National Statistics show that unemployment among the young is on the rise again, with nearly 1 million young people currently out of work in the UK. Youth organisations such as the Prince Trust have expressed their concern that the recession has left a vacumn in the skillset of the younger generation. The fear is many young people will experience the recession without gaining meaningful and lasting employment.

According to the Prince’s Trust:

  • Young people not in employment are twice as likely to feel unable to cope as their peers
  • More than 1 in 4 young people believe their prospects have been permanently damaged by the recession
  • Almost 1 in 5 young people feel they have no future due to the recession.

Young people and the spiral of debt

Martina Milburn, chief executive of The Prince’s Trust, said:

“A frightening number of unemployed young people feel unable to cope – and it is particularly tough for those who don’t have a support network in place. Life can become a demoralising downward spiral – from a challenging childhood into life as a jobless adult. But, with the right support, we can help get these lives on track.”

The number of 18 to 24-year-olds out of work increased by 48,000 to 993,000.

The situation is further compounded by the rising statistics for young people to falling into debt. Analysis carried out by the Insolvency Service have warned young people to stay away from services such as payday loans. The biggest take up in debt solution services has been those aged between 25 -34.

The vulnerable economic position of the young

The correlation between rising youth unemployment figures and rising debt levels among the young is not difficult to comprehend. A lack of consistent employment leads to insufficient and irregular levels of income, leaving young people to seek inadvisable methods to make up for any perceived deficit, such as unsecured credit deals.

September – November 2012 – 957,000 unemployed 16 to 24 year olds


Youth unemployment statistics have stated that in the period November 2012 – January 2013 there were 993,00 young people unemployed, an increase of over 48,000 on the previous quarter.

For those aged 16-24 the unemployment rate rose by 0.9% to 21.2%. The unemployment rate  for 18-24 year olds is 19.2%. For 16-17 year olds the rate is 37.3%.

The effect of youth unemployment has wider implications, particularly in relation to debt. Many young people state that unemployment is a trigger for their debt problem and those seeking debt relief are more likely to be out of work, compared to other age groups.

Help for those who are struggling to pay off debts.

If you have run into financial difficulties and you cannot afford to pay your debts, you may be able to apply for a Debt Relief Order.

1)What is a debt relief order?

A Debt Relief Order (DRO)  is a legally binding document granted to those who cannot pay off their debts. They were initiated to help those on a low income who have relatively small amounts of unsecured debt.  The order is granted through the Insolvency Service and costs £90 to set up.

You can apply for a DRO if your assets do not exceed £300 and your debts total £15,000 or less. You will have to have been resident in the UK for the last 3 years and not had a DRO granted in the previous six months.

There are many types of debt that can be included such as payday loans, credit cards and overdrafts, hire purchase agreements and rent. However, student loans and child support cannot be included, as well as secured fines and mortgage repayments .

During the debt relief order

  1. Your creditors will not be able to take further steps against you without first applying to the courts.
  2. You will not be able to obtain credit over £500
  3. You will not be able to run a business without stating your previous involvement with a debt relief order

A New Beginning

The duration of the debt order is usually 12 months. When it has run its course you will be free of your debts and able to make a fresh start.  If you are experiencing financial difficulties and would like more information on debt relief orders, then make sure you use an authorised debt advisor.

Rosie Percy writes for a diverse range of topics and industries including education, health and finance. Rosie has written for the Guardian and other lifestyle blogs, and now lives and works in Brighton. For more information on debt consolidation click here.

Coming to Terms With Debt

When you’re faced with mounting debt problems making that first step to regain control of your finances is often the most difficult part of the whole process.

It’s similar to getting up in a morning, it hurts, it doesn’t get any easier and you have to live with it every day, but within a few minutes you’re awake and ready for the day ahead.

Dealing with debt can be similar, it needs to be managed every, needs to be worked work at, but once you’ve made those first steps it gets easier.

With this in mind we’ve decided to explain what you should do when you’re coming to terms with debt.

It doesn’t matter why or how you’ve landed yourself in debt, there will come a time when you think enough is enough and it’s time for a change.

Unfortunately it’s not something that can be done overnight as you’re usually at the mercy of others as to how quickly you can begin clearing your debts. Whether that’s waiting for your next pay check, negotiating with creditors or dealing with a debt management company – these things can take time.

Therefore, the first thing you should do is prepare for what’s ahead. Set aside a few hours one day and lock yourself away in a quiet room. Arm yourself with enough tea and biscuits to sink a ship, a calculator, your bank statements, a computer and take those first steps to becoming debt free.

To begin with you will need to calculate exactly how much you owe and who you owe this money to. This allows you to build up a picture of exactly what you’re dealing with.

Most people find it useful to create a spreadsheet or list of what they owe as you need to know:

  • who you owe money to
  • how much you owe
  • the current interest rate
  • your current monthly repayment

If you can work it out, or know the figures, it’s worthwhile stating when each debt will be paid off and the total amount that you’ll have to repay, including any interest.

Once this spreadsheet is complete you should have a clearer indication as to the amount of debt you’re facing. Don’t worry if your debts seem unmanageable, no debt problem is too great to fix.

You’re next task is to work out your monthly income and expenditure. Again a spreadsheet or notepad can help as you’ll need list all of the following:

  • the money coming into your accounts including your monthly pay and any benefits or other income you receive
  • your monthly direct debits including utility bills, council tax, TV, broadband and mobile subscriptions and anything else you may have
  • any other regular expenditure spent on essentials such as the weekly shop and fuel for any vehicles you have
  • the current repayments you are making on your debts (if you’re currently defaulting on payments you still need to include the amount that you should be paying)

Once you’ve done this simply subtract your expenditure from your income.

Ideally the figure you’ll be left with is positive. If this is the case then you’re able to tackle you’re debt yourself. You may want to take out a consolidation loan to make your debt more manageable, but in general, with a lot of hard work you can deal with your debt head on.

Unfortunately, many people will find that the number they’re left with is negative. This means that you don’t have enough money coming in to repay all of your debts and continue living the lifestyle you currently have – something has to change.

If you’ve found yourself in this situation and have mounting debts a professional debt solutions company could help.

These firms have been created to help people like you. They offer simple, professional advice and can provide financial products that make your debt more manageable.

Remember, no matter how large your debt is there is always help available. You just need to ask for it.

Valuable Tips to Keep Your Finances Under Control

Living a good and problem free life has a lot to do with effective finance management. Whether your income is a small or a big one, proper management of finance will surely save you from a many financial trouble and worries. You need to have good knowledge of managing finance efficiently.

Tips on Keeping Finances under Control

  • Set Your Priorities– You need to plan about your finances carefully. It is important for you to be clear about your needs and wants. If you really want to make some big purchases such as a car or a home, then careful planning is of utmost importance.
  • Prepare a Budget– It is extremely useful to prepare a guide on your expenses for the coming few months. It is extremely important to have a plan on your expenses. A proper plan will help you to chalk out how much amount you can spend in one month. You need to prepare a list when you go for shopping or to a grocery. You need to keep telling yourself that you must stick to your list. Sticking to the budget is always a good way in which you can stay away from financial concerns and troubles.
  • Your Spending Must Not Exceed Your Earning– It is never wise to spend in excess of your earning. You should not spend in excess with the credit card you have if you are not sure of getting payment for it in the month to come. It is utterly foolish to spend huge amounts thinking that you will be having a job in the next month.
  • Managing Your Debts– You need to pay the credit card with a lot of promptness. It is never wise to go over the credit limit. Late payments will cost you in excess. When the credit card providing companies are providing you with low rates of interest, it might happen that you end up paying higher fees at the end. Overspending and late payment will most likely put a stain on the credit report. Knowing the trick of managing a debt is truly a huge step that you need to take for managing your finances.
  • Know How to Save– You must make saving a habit. Infact, savings should be included in your budget. A certain percentage from your income should be kept aside as savings. Having sufficient amount of savings will always provide you with the confidence you need in the future and will help you to stay away from financial crisis.
  • Be as Informed as You Can– When you are making an investment or borrowing money, you need to be informed about the terms and the rates of interest. This will help you to keep yourself away from the financial troubles in the future.

On a concluding note, it can be said with certainty that the tips mentioned above will help you a lot in managing your finance. If you follow them seriously, it will not be a problem for you to live a life that is free of financial concerns.

This is a guest post by Alisa Martin who is a freelance writer, professional blogger, and social media enthusiast. Her blog Foreign Currency Exchange Rates focuses on Finance bloggers.

Guidelines to Consider When Appointing a Chapter-13 Attorney

When you are fully troubled with your huge debt accumulation, you are always advised to think about taking professional services from an authorized chapter 13 attorney to help you in registering for the much-needed bankruptcy.

If you make-up your mind to take this particular step, you will certainly be saved from a possible financial disaster.By making effective use of this specific strategy,rather than selecting another type of bankruptcy or attempting to make unfeasible reimbursements, you can quite easily reorganize your accumulated debt into a new one, which you can afford to repay.

How Should You Go About It?

In most cases, when you make use of this particular approach for handling your debt, it will include producing a proper plan of doing regular payment that will generally last for only few months, and at the completion of that schedule, all your accumulated debts will be cleared. However, you have to take aid from a professional chapter 13 bankruptcy attorney to help in formulating the most appropriate of decision regarding which particular kind of bankruptcy you need to file.


In case, you are not very certain about which recovery option you should consider to prevent an impending financial disaster, due tomassive debt accumulation, go through the following sections where we are discussing in detail about why it is recommended to register for chapter 13 at times of financial difficulties.

Cases When You Can’t File Under Chapter-13

To start with, it is always possible to adopt the trouble-free process of assessment, and elimination. In some instances, when you own a debt of specific kind, your bankruptcy lawyer/attorney may recommend you not to file for chapter-13 since you may end up in a worse position. A few of the normal debts against which, your chapter attorney may counsel you not to file for chapter-13 include criminal fines, study/student loans, alimony, child support, and so on.Such types of debt are characteristically immune to the defense of this particular kind of bankruptcy, and for that reason, you actually fail to reorganize your debt in those cases.

When Is It Effective?

On the other hand, there are other kinds of debts that can be quite effectively streamlined. In general, an experienced chapter 13 attorney will usually suggest you to carry on with the chapter 13 bankruptcy filing only in case of a slew of genuine reasons.

One among the major reasons for filing under chapter 13 of bankruptcy is that the accumulated debt is a resultof merely tax liabilities or specific mortgages. For instance, if you decide to register under chapter 7, it would probably result in immediate liquidation of all the assets, and properties that you own. However, this is actually not the scenario when you select to file under the standard chapter 13.

Seeking Help from a Professional Attorney

Normally, this kind of bankruptcy offers you a chance to repay all your debts by generating a fresh repayment schedule. In addition, you will be prohibited to file under chapter-7, if you are under a specific income level. Due to all these reasons, it is always recommended to hire a chapter 13 bankruptcy attorney, who has in-depth knowledge of all these aspects to assist you in taking the right decision at the right time.

Negotiating Your Business Debts On Your Own And Saving Your Dollars

Since the economic recession in the US, the small and the large business organizations are the worst-hit and most of the organizations are still trying to recover from the sluggish financial state. Debt can mar the growth of a business and therefore unless you take rock-solid steps to let go of your debt burden, you won’t be able to get back on the right financial track. Businesses are formed to generate revenue within the nation and boost the economy at the same time but when such business firms drown in debt, it becomes a burden for the nation’s economy. Although there are debt negotiation services that offer professional help to the financially distressed business firms, you can even save your dollars by negotiating your debts on your own. Are you aware of the steps that you have to take in order to pave your way out of debt through debt negotiation? If answered no, here are some tips that you might consider.

  1. Calculate the total debt amount: The foremost step to take is to calculate the total debt amount so that you know where you stand exactly. Take out all the documents and receipts of the financial account or the credit card accounts and make sure you don’t miss a single thing. Jot down the interest rates that you’re paying on each account, the total outstanding principal balance and the due dates on which you’re supposed to repay your debts.
  2. Checking your savings amount: No matter how sooner your principal balance is waived off by your creditors and lenders, you still require a solid savings account from which you can make the payments towards the remaining amount. Keep on saving a portion of the revenue that you earn so that you don’t have to take resort to the professional options for borrowing money and repaying them with the interest rates and the other fees. Don’t withdraw funds from your savings account unless you’re going through an emergency.
  3. Negotiate with your lenders: The most important step that you have to take as a business owner is to negotiate with your lenders on your own so that they know the financial hardship that is barring your business from making huge returns and make timely payments. Explain your present financial situation in a very humble manner so that they believe you and agree to waive off a certain portion off your outstanding principal balance.
  4. Write a debt negotiation letter: Draft a debt negotiation letter formally mentioning the reason behind the loan defaults, the total amount that you owe, the total amount that you can afford to pay back and your affordability. Maintain a formal, yet humble tone while writing the letter and try to accompany the letter with a business budget that can help prove your future success.
  5. Start making the payments: Once the creditors agree to waive off a portion from the principal balance, you should immediately start making the payments, either in a lump sum or through easy and affordable monthly payments.

So, when you wish to save your dollars by negotiating your debts on your own, you can take the above mentioned steps. Manage your finances and as soon as you’re debt free, start opting for credit repair as debt negotiation might hurt your financial records.

5 Tips to Obtain an Auto Loan Without Making a Down Payment

Just like having, a house of one’s own is a long-cherished dream, one wish to own a car quite as badly. When, you come across a showroom of some leading car seller brand, your eyes must have desperately tried to look through the glass panes to find out your favorite model. Many times when your friend or relative has bought a car, you have felt hopeful that someday even you would own one. But, the true fact is that purchasing a car is quite a considerable investment. For a middle class man it might just become quite tough to meet the necessary expenditures. But, it would be a great news for people to note that obtaining a guaranteed auto loan without having to make any down payment is possible today.

This article offers some useful information on how to ensure the availability of such a loan. If one can follow these tips there is no doubt that he would be able to obtain auto finance without having to make a down payment of a single penny. Moreover, you will also get lower rates and instantaneous processing.

Maintain a Clear Credit History

It might happen that the applicant possesses a very poor credit history. However, if you wish to come out of such a situation, you will need to follow some essential step. As a result the lender would have a positive opinion about you, since he would notice that you are willing to improve your credit score. The ‘trust’ factor would increase automatically.

Reduce Debts

Auto loans without any requirement for down payments, increase the risk factor for lenders. Thus, if you have a high debt-to-income ratio, you wouldn’t be able to receive an auto loan. All you have to do is do away with older debts and achieve a better DTI ratio.

Make a Wise Selection

Before you decide upon obtaining an auto loan for a car, you would need to chalk out a budget in your head at first. If you have decided to buy a car, the cost of which is well within your financial ability, then there is no issue about you being able to pay off the loan regularly. Moreover, the lower the amount of the car is, the lesser will be the amount of loan you would need to borrow. As a result, there would be better chances of your loan application being accepted quickly.

Go for Trade-ins

You can always use your previous car, in order to lower the amount you would need to borrow as a loan. This is a trade-in process.

Get a Co-Signer if Possible

A co-signer will increase the confidence level of the lender. He would be ensured of receiving regular payments. Thus, try to find out some individual with a good credit score who will be ready to be your co-signer.

It is not quite possible to follow each and every one of these suggestions. However, if you keep in mind even the majority of them, you would see guaranteed results.


5 Must Haves That a Financial Plan Should Carry

The term financial plan might be known to you, if not, you might ask some consumers who are aware of it. Well, the answer is going to vary greatly. And if you ask advisors instead of consumers then the answers might shock you.

The advisors are there on the one end of spectrum and are a popular tool to analyze the financial situation of their clients. On the other hand there are people who use it as a way to sell their financial products.

The truth lies in the fact – A financial plan is a special tool to point out those areas where you may be lagging in finances and you need to address them immediately. If you have ever thought about a plan or created a similar one then this article is a must read.

How Much Lump Sum Will You Need To Have During Your Retirement?

One of the most important question, which your financial plan should tell you. If your retirement income is less than the expenses, then you need to withdraw for the investments. What should be the size of your nest egg? This what a financial plan must-have or must suggest.

Is There Any Probability Of Running Out Of Money?

There are different kinds of uncertainty in life and if you are able to understand the probability of running out of money at various age is most important. Can you say that you will be comfortable at 20% probability running out of money at you late eighties? And to refer most plans will utilize Monte Carlo simulation, to imitate the real life situation. But remember there are variables in which simulation is not used and this is sure to give a false sense of security.

What Should Be The Rate Of Return To Meet All Your Goals?

If you are able to determine the rate of return, then you will need to fully fund your golden years and this a financial plan should be able to calculate. If you need to earn around 9%, but what if you are 100% invested in CDs. You will fall short of your returns and if you only need to earn 4.0% to realize your goals, then why will you take more risk? Once you are able to grab this then you get a  desirable portfolio of your kind.

What Is You Net Value Of Income?

If you are able to calculate the net income then you need to compare the plans and their updates. If you see that the total net value is declining, from one year to the next year, then it could be a warning sign and the action needs to taken.

What Are Your Debt Ratios?

Debt has an important role to play. Do you know that without it you will not be able to buy a car or a house. But, yes there are limits and that could jeopardize your future lifestyle. So it is must for a financial plan to carry the debt ratios.

Well, you can find many types of financial plan that are designed to begin and finish quickly facilitating the sale of financial product. Now you have to be a little careful out there. The true planners will charge you a fee for the kind of work they will offer and it will be unique from any product offerings. So, whenever you think to buy, be alert! Do a little shopping on the internet.

Author’s Bio: Jeff Hall, a financial advisor, who imparts financial updates based on her experience of helping business and consumers. He has worked with reputed outbound contact centers for past ten years and shares her experience and the lead generation services offered by them.

Is It Possible to Live Without Borrowing Money?

borrow moneyEven though, a modern society is built upon the principle of borrowing money, a logical question arises if it possible to live without debts? Plenty of crises have taught us that an enormous variety of credits and debits may influence money flow in a radical way.

If we have got everything necessary, why do we still require more money?

What do people usually borrow money for?

Basic reason why people have tendency to borrow much money is their wish to get richer.A desire of enjoying life, a wrong perception of money that with its help we will be able to get anything we want is completely false. Thus, try to teach your children that process of enjoying life does not necessarily involve money. Result of such thinking may occur to a long debt-list that is no good at all. What is the point of purchasing things that you may not even need? Still the consequences will show all the importance of every spent penny.

Is a habit of borrowing money changeable?

Spending an entire life on borrowing money is not a radiant opportunity at all. Though there are some people who do not care about a moral side of an issue. With time flowing they just lose a sense of guilt and they end up judged by society, still they do not feel anything wrong about it. Having a debt-free life is not teachable if a person does not realize a chain of credits in the contemporary world.

Have you ever thought what your life would look like if you had debts during your entire life? It will be full of thrills and threats, stresses and nerves. While a life with wholesome needs will be much more satisfying and to some extend absorbing. For example, if you lead a debt-free life, you will not have any wish to get a credit or a loan, as your firm financial position may change and turn upside-down.

Put aside from every paycheck

If you would like to make a bug purchase, try to save some money for it. If you take out a loan, you will automatically get a debt even if you still have time before a deadline. Therefore, save some money from every salary and this will be very helpful if you decide to buy some piece of furniture for your house, or a Christmas purchase.

Nevertheless, if you are aware of your inability to pay the entire sum in full, then you have a good option for borrowing money with a term of month. The so-called no fax payday loans online are absolutely hassle-free, fast and faxless, which means without any paperwork.

With that being said, think carefully before making a decision of taking out any kind of a loan or credit. Become more organized with your everyday spending. Get a new habit- not to buy things that you do not really need. Would like to learn how to budget? You are more than welcome to look up hundreds of quality advices on Internet!