Sunday, September 21, 2014
The reason this decision is not that simple is that there are serious repercussions to choosing bankruptcy, and even if that is the only logical option, there are a number of bankruptcy chapters under which debtors can file. Increasingly, a Chapter 13 bankruptcy plan is becoming the preferred option, but other chapters are 7, 11, 12, and are just as efficient in ridding oneself of debt.
However, while debt settlement is more expensive and less damaging to credit histories, they do not always turn out to be the saving grace that applicants would like them to be. So, when clearing existing debts, which of the two is the right one to choose?
Check Your Own Status
The first step in ascertaining the best choice is not to look at the options, but to look at yourself. Depending on your credit and financial status, either bankruptcy or a debt settlement program will provide the most effective solution. And reading your credit report is the starting point.
Once the true extent of your debt problem is confirmed, it is possible to work out what the right debt relief option is, based on what kind of deal is affordable. When debts are slightly greater than income, then a Chapter 13 bankruptcy plan is likely to be the right choice. When it is very much greater, Chapter 7 might be the most plausible choice.
However, if there is still some income more than debts, then a settlement deal is likely to be affordable. The complication is that, while a settlement involves clearing existing debts for a fraction of their worth, it still requires a lump sum payment to complete the deal. Saving up that lump sum is the problem.
Terms of Bankruptcy Chapters
There are four chapters to the Code of Bankruptcy that any bankruptcy case can be filed under: chapters 7, 11, 12, and 13, The key differences between them relate to the extent of the poor financial situation an applicant has, and the likelihood that a debt settlement program cannot be approved.
Chapter 7 is filed by those seeing liquidation or straight bankruptcy where debts are completely written off. The other options relate to reorganizing debt, with Chapter 11 filed by businesses seeking to reorganize their debt, but not to liquidate. Chapter 12 is applicable to family farmers seeking to reorganize.
However, a Chapter 13 bankruptcy plan is sought by individuals who earn the average income or higher in the state the case is filed in. The court decides on the terms of the debt reorganization, and continuously monitors the repayment progress. So, clearing existing debts is done under strict conditions.
Bankruptcy or Settlement?
The basic deciding factor is cost, with the fees associated with a debt settlement program almost double that of the costs of filing for bankruptcy. But there is also the matter of monthly repayments and other terms associated with the type of bankruptcy. If the Chapter 13 bankruptcy plan is more affordable than the settlement plan, it makes sense to choose the former.
But the consequences of the decision need to be considered too. For example, clearing existing debts through a settlement plan will reduce a credit score by around 50 points, but bankruptcy cuts it by a minimum of 200 points. And it will be on your record for 10 years, while with a settlement plan, credit is returned after 2 years.
Wednesday, September 17, 2014
The challenge of clearing existing debts, and lifting the weight that can cripple even the hardest working of us, is no light matter. It usually requires great discipline to take control of debts, making it extremely difficult to achieve independently.
A precisely tailored consolidation plan can make a real impact, and a debt consolidation loan provides the means to restructure the money owed into something that is manageable to handle. But how is this possible, and what are the terms that should be sought?
How Consolidation Is The Answer
Applying for a debt consolidation loan with bad credit is a good decision, but it may seem strange that a new loan can actually make your debt situation better. Knowing how consolidation works is the best way to ascertain the effectiveness of the strategy. In its simplest form, consolidation replaces multiple debts with a single loan, thereby removing the complexity and lessening the burden.
The biggest problem with multiple loans and debts is that they each have their own terms. So, 5 loans will have 5 different interest rates and 5 different repayment dates. That means the amount of interest is higher than it needs to be, but clearing existing debts with a single loan means a single interest rate is paid.
And even the principal if the debt consolidation loan is $50,000 to buy out the individual loans, the terms can be much better than those original debts combined, making it much more affordable than the original deals.
What Terms Should Be Sought
Of course, applying for a debt consolidation loan with bad credit is one thing, but securing terms that make it worthwhile is another. By and large, lenders offering consolidation packages are willing to offer very flexible terms, but the key issues are the interest rate and the loan term.
The interest rate can be quite low, but what is most important is that the rate is significantly lower than the average rate charged on the existing loans. That way, clearing existing debts and replacing them with a new loan can be accomplished while making savings - as much as 50% on monthly repayments.
Crucially, however, it is the size of the loan principal that makes the biggest impact, and this is where the loan term comes in. With 5 loans to pay each month, the total sum could easily reach $1,500, but even a $50,000 debt consolidation loan repaid over 10 years could be half that amount. The longer the lifetime of the loan is, the lower the required monthly repayment.
Considering a Consolidation Company
When it comes to applying for a debt consolidation loan with bad credit, there are two chief options. The first is to approach a lender (traditional or online) and apply for a loan large enough to clear existing debts. While securing a large loan might be difficult usually, if the purpose is known to be debt consolidation, approval is more likely.
However, there is no guarantee of approval and this means that the problems might only persist. Another option is to approach a debt consolidation company, professional service providers who will buy out your debt and then receive monthly repayments directly.
Of course, this option is a little more expensive as there are fees to pay on top of interest on the debt consolidation loan. Still, the cost is manageable, and progress in lifting the debt is certain to be made.
By: Mark Venite
Monday, September 15, 2014
The first thing you should understand about bankruptcy is there are two types: reorganization and liquidation. Filing for Chapter 7 bankruptcy falls in the liquidation category. With this solution, you can sell your items in order to knock off some of your debt. You will be permitted to keep certain items as mandated under state laws which provides protection for specific valuables. If you apply for Chapter 13 bankruptcy in Connecticut, you’ll be filing for reorganizational bankruptcy. Chapter 13 is probably the most well-known of the reorganization bankruptcy. You’ll be able to keep everything that you own and instead of selling off your assets you will make monthly installments over the next three to five years to either repay all of the debt you owe or some of it.
Chapter 7 bankruptcy generally lasts three to six months, and any debt that remains after you’ve sold your property becomes unsecured debt. That unsecured debt will then be wiped out. Based upon your equity level, items you're able to possibly keep include clothing, furnishings and any vehicle you own. If you have any secured debts, like car loans, you can either let the creditor repossess them, keep paying for the item, or give the creditor enough money to equal the actual replacement value of your secured debt. For those who do file for Chapter 7 bankruptcy, there are particular secured debts that can be eliminated. When it comes to Chapter 7 bankruptcy however, something to bear in mind is not everyone is able to qualify. If your disposable earnings are enough for you to qualify for Chapter 13 bankruptcy, you won’t be allowed to file for Chapter 7. Chapter 7 bankruptcy also won’t do you any good if you owe tax debt, child support, or spousal support.
Before being allowed to file for Chapter 13 bankruptcy in Connecticut, you’ll have to have a reliable source of income. A repayment schedule will have to be established that spans a three to five year period. Minimum monthly amounts is decided by how much your debt is, the amount of money you make and the amount of money you would have paid your unsecured creditors had you filed for Chapter 7 bankruptcy instead. There are federal limits set in place for Chapter 13 bankruptcy. Right now, you can’t have more than roughly $1,011,000 in secured debt and about $337,000 in unsecured debt. Before your creditors are permitted to take action against you, you will be allowed to make up any missed payments for your secured debts.
Look into bankruptcy options if you want to get a handle on your finances. It can definitely be worth considering even if it is not your very first option. Carefully look into your finances, research your options and think about the amount of debt you owe when attempting to make the best decision possible for any kind of bankruptcy.
Friday, September 12, 2014
The chief problem for anyone with financial difficulties is cash flow, with repayments falling behind only because the cash was not available at the required time. The logical solution, therefore, it to restructure debts to ensure the repayment schedule is simpler. This can be done by clearing existing debts with a single loan, then repaying it.
And that is exactly what a debt consolidation loan is for – buying out the balances of existing debts to allow the overall debt to be restructured into something more manageable, and more affordable. But is the deal really as viable a solution as it seems?
Consolidation As A Solution
The good news when seeking debt consolidation loans for bad credit management is that opting for consolidation offers more benefits than simply buying out existing debts. In reality, the chief motivation when seeking these loans is to clear debts, but there is also an opportunity to set things up for a better financial future.
For example, since all of your debts have been brought together and bought out, it means they have been paid off in full. This fact is noted in your credit report, thus ensuring that your credit score is increased. So, as well as clearing existing debts, consolidation ensures better loan terms in the future.
Also, while all debts are basically replaced by a debt consolidation loan, the new structure should mean that the size of monthly loan repayments falls significantly compared to the combined repayments of the original loans. This means that the debt-to-income ratio is improved too.
The Consolidation Terms To Seek
So what are the terms that should be secured to make the whole exercise worthwhile? Actually, besides the usual interest rate concern, there is only one real issue when applying for a debt consolidation loan for bad credit borrowers to consider carefully.
The term refers to the lifetime of the loan, with the basic idea being the longer the term the smaller the size of the repayment each month. For example, the number of repayments in a 3-year loan is 36 (36 months), to the principal borrowed is divided by 36. If the term is 5 years, the principal of divided by 60.
If the debt consolidation loan sum is $10,000, the difference is $110, which is a significant sum to free up, thus lowering the pressure to make the necessary repayments. So, clearing existing debts and saving money can actually be done simultaneously.
Where To Get A Consolidation Loan
A key part to securing the maximum benefits from a debt consolidation loan for bad credit borrowers to enjoy is to approach the right lender. Like all financial products, there are different terms available from different lenders.
Most lenders offer some kind of debt consolidation loan, but the interest rates are usually quite high and the loan limit is fairly low. This is because the applicants are bad credit borrowers. Online lenders will offer better terms than a traditional lender, but the same restrictions apply.
A professional debt consolidation company is ideal when the size of the debt is very high. They take the task of clearing existing debts into their hands, and in return they withdraw set payments from your account over an agreed period of time. They will charge a fee, but they also take control of finances, so the risk of failure is practically nil.
Sunday, September 7, 2014
Instant approval personal loans are capable of offering instant cash assistance to the populace, as these loans take a very short duration to complete the entire approval process. Moreover, these loans have low and reasonable rate of interest that the borrowers can easily afford with their basic expenses. Hence, if you are also looking for a quick supply of funds to repair your home or to pay your child's higher education fees, then consider the convenient solution of instant approval personal loans and get rid of your financial worries. However, those who have maintained a bad credit history so far, may find some difficulties in utilizing this loan assistance, as their repayment ability is doubtful. But fortunately, with the extensive expansion of finance market and growing rate of competition, they too can enjoy this financial aid under certain limitations, such as a high interest rate or strict repayment schedule.
Since every field is enjoying the facility of technological changes, the finance industry is also ready to serve its consumers with this amazing service. Now, every borrower is allowed to draft the loan application from the comfort of his home and this has become possible just because of the online services. All you need to have is a computer and an internet access and then with just couple of clicks, you can initiate the loan processing. Thankfully, all finance companies of today are well equipped with the option of online application processing facility. Hence, if you are also looking for an urgent monetary assistance, then do not vacillate any more on the decision of instant approval personal loans, as it promises to offer cash in the shortest possible duration.
Instant approval personal loans are not only easily accessible but they are also very efficient in solving all sorts of personal financial problems. The loans are tailored by keeping the hectic schedule of the customer in mind. Perhaps, for this reason only, all borrowers, including the category of extremely busy professionals, who do not have much time to visit various finance institutions and banks, are opting for these loan plans to satiate their personal financial needs. With this easy-to-execute procedure, these loans have successfully managed to offer good financial solutions to the loan seekers, who like to walk shoulder to shoulder with technological advancements.
Saturday, September 6, 2014
If you're self-employed and work by yourself you need to make sure you organize the correct insurance for you and your business. This will be insurance that covers you against any unforeseen and unexpected set backs or accidents that befall you and your company. If not protected you could face serious losses or even the closing of your business.
A lot of insurance companies offer something called Public Liability Insurance for the self-employed. If you search the internet you will be able to see a number of different quotes and policies. This is the most important type of insurance for your business. It covers you and your business for claims made against you by customers, clients and third parties, including members of the public.
The exact type of insurance you need depends on your type of self-employment, and one policy will vary from another. In addition, and depending on the nature of your career and your dealings with the public, you may well need to combine Public Liability Insurance with other kinds of insurance. For example, financial advisors may need to have both public liability and also professional indemnity insurance because of the nature of their profession and because of the position of trust they take when dealing with the general public. In addition their may be insurances that their own industry require they take out, related to financial advice, for example.
There are, then, a number of specialist insurances that self-employed workers should check if they need. The following are the most common insurance policies for the self-employed:
Public Liability Insurance
Public Liability Insurance protects you and your company from claims against you by members of the public, customers, clients and is advisable for almost all businesses.
Professional Indemnity Insurance
Professional Indemnity Insurance gives you insurance cover for the services and advice you might give to your customers or clients. Should that advice or service be incorrect or wrongly performed and cause damages to your customer, they would have redress in the courts. Professional Indemnity Insurance covers you.
Employer's Liability Insurance
Essential insurance for all self-employed people who have reached a stage with their business where they need to employ other people.
Commercial Vehicle Insurance
If you use a commercial vehicle for your work then you need to get commercial vehicle insurance.
Business Buildings Insurance.
Business Buildings Insurance is essential if you work from home or rent or own a site - it covers both the building and any of the business equipment inside.
To find a suitable self-employed insurance policy for your business seek out brokers who specialize in self-employed and contractor mortgages, tax solutions, umbrella companies, pensions and insurance policies. They will give you a better rate than most general brokers and financial institutions.
Thursday, September 4, 2014
Denver home loans are available with Beacon Financial Mortgage lenders who are reputed in the field and offer low interest rates and various options for customers. If you are cautious about taking mortgages and require discussing your options with a counselor you can call them and they will offer their best customer service.
Denver home loan rates are available for people who are credit worthy and maintain a high credit score. They can get better interest rates with mortgage companies. If your credit score is low, some companies like Beacon Financial Mortgage will make an individualized decision to help you with a proposal. The advantages with selecting a company such as Beacon Financial is that they are accredited and do not charge any lock fee, application fee or other such fees. They have streamlined the mortgage process and have the ability of closing your loan in 15 days.
Try to get the best Denver home loan when you wish to purchase property or a home. You will want to ensure that the home becomes your own after many years of paying the mortgage loan interest rates. You may pay the same amount of interest rate every month when you decide on a fixed rate mortgage. You can either take the fixed rate for a period of 15 to 20 years or you can use the option for a five and seven-year fixed rate loan with balloon payment at the end. This is different from adjustable rate of interest.
If you are interested in finding the best options then you should log on to the websites of several mortgage companies and read the types of loan interest rates to find out which one will benefit you in the long run. Do not hesitate to contact the customer service support and ask them to answer your queries. You should have no doubts when you are paying out money in order to purchase a dream home that you are living in currently.
Most of the popular and reputable sites offer tools and calculators and set up track sheets to let you see the current rates of interests especially when you plan to purchase properties. Make sure you are well informed about Denver home loan rates and make the right decision when you visit the mortgage company. You have the option of deciding on the loan program that you wish to take and the mortgage counselor will help you to select the right option.