Loans and Mortgages Blog

3 Common Debt Solutions

So you’ve been through some debt consultation and you now know that you have a few options for solving your debt conundrum. First, you can consolidate. This doesn’t really eliminate your debt, but it may make it easier for you to pay your debt down and ultimately off. Second, you can liquidate assets. If you have an expensive car, you can sell it and buy something used or more economical. You can sell some jewelry or liquidate any collections you have on eBay. Finally, you can consider declaring bankruptcy. Bankruptcy really should be your last resort because it will continue to plague you for seven years. Either way, there is light at the end of the tunnel, and there is a debt solution that will ultimately work for you.

Debt Help Resources for Anyone

Many people wait until they are buried under debt before they seek real debt solutions. The best way to maintain your credit score and a reasonable stress level is to seek debt consultation before your creditors are beating down your door. If you’re wondering how to start seeking help with the debt you have, first, try your creditors. Depending on your income and credit score, many credit card companies will negotiate a lower interest rate. If you have 4 student loans sitting out there, consider calling FAFSA or Fannie Mae and getting your options for a student loan consolidation. Not only will you reduce the number of payments you’re making to separate lenders, you’ll usually get a better interest rate. Finally, if you are having trouble with your mortgage or your HELOC, talk to your mortgage company. See what refinancing solutions may be available. Asking for help is not admitting or accepting failure, it’s taking the first steps towards gaining control of you debt.

Finding Debt Solutions Available to You

Financial planners and debt analysts get paid to do their work for a reason, and that reason is knowledge and experience. This isn’t to say that you should follow their recommendations blindly – it’s crucial that you understand your alternatives and make smart decisions accordingly. Still, speaking to a professional debt consultant will most likely result in several options you haven’t come across in your own research and even some debt solutions that you hadn’t considered at all. If you’re lost, worried or scared about your financial situation and you’re ready to seek debt help, call a professional and listen with your head – not your queasy stomach.

Patience + Time = Your Debt Solution

Don’t jump from the debt frying pan into the debt fire! Educate yourself on all of your options before you do something really drastic, like filing for bankruptcy. The best thing for you to do is talk to a few debt consultants and financial advisors to get a full picture of your options. Read online and take some self help financial books out of the library. Get your own credit report and score and see where you are and what you need to do to improve your financial situation. When you are armed with as much knowledge as you can get, then make your decision. Ultimately, bankruptcy may be the best option for you – but make sure you know the pros and cons before you make the decision.

Let Debt Consolidation Help You Avoid the Unthinkable

Debt consolidation can prevent you from needing to declare bankruptcy and in reality it’s a much more responsible decision to make. When someone declares bankruptcy their creditors don’t ever get the money they are owed and you or your business will have a credit blemish that will follow you for years. If you consolidate your debt by paying off your creditors and taking on one new loan, you alleviate yourself of those many burdens, phone calls and bills to pay and you are left with only one. You may think this doesn’t really solve anything because you still have debt to pay off – but it is your debt and your responsibility. While it may seem easier to just throw your hands up in the air and declare bankruptcy, you’re really just setting yourself up for more wasted money as you wait for your credit to repair.

Debt Consultation Costs & Benefits

Like a home equity loan, with which there are closing costs associated, some debt solutions or debt consolidation plans come with fees. Now, if you are paying 1% and you are saving 10% the savings are a no brainer – but don’t be lazy! Calculate the costs and really figure out what you are putting out vs. what you are getting back. Generally, individual debt consultation is not fee based and will be free of charge as they create a debt solution for you. Business debt consultation, because it’s more complicated, often does have a fee structure or some outlaying of money. If you’ve educated yourself about your debt solution alternatives, you won’t be surprised by the options laid out by your debt consultant and you’ll be able to make an educated decision about your plan of action.

Will Debt Help a Company?

Strangely, debt can actually help some individuals and professionals. When you’re afraid of losing your company, your home or your job, you’ll often work twice as hard to bring in more revenue and therefore be able to resolve the debt. Debt can help you focus your energies on making your company or your personal life more efficient, streamlined and within a budget. For instance, if a professional debt consultant came in, would he or she immediately point out that you are spending too much on your home or office space? On your car? On commuting costs? Are you putting enough revenue into your real assets like your home or your employees? Debt and the pressures it brings can force us to look reality squarely in the face. Don’t be afraid of it – use it as an opportunity to grow your business or your personal finances.

Bankruptcy – A Last Resort Debt Solution

Nowadays, with new laws being passed, bankruptcy is less attractive than ever as a debt solution. Not only is it harder to be eligible for bankruptcy, it still takes seven years to get it off your credit and it can keep you from getting a car loan, a mortgage or even a credit card. Don’t rush into a debt solution like bankruptcy without seriously weighing all of your options beforehand. And don’t depend on the attorney or bankruptcy specialist with whom you are working to suggest alternatives. Remember that this is how they support themselves so they have very little motivation to help you find alternative debt solutions. A great tip – try to find a financial planner or analyst you trust and let them help you identify all of your options. You’ll make a better decision in the long run.

Online Debt Consolidation Help in Minutes

How can you prepare for a debt consolidation consultation? After finding the right debt consolidation lender or service, you’ll need to prepare some documentation to get your loan going. First, get your own copy of your credit report. Make sure it’s accurate and any accounts that have been paid off or closed are properly reflected on the report. Next, gather all of your current bills. Make sure you have balances, phone numbers and addresses of all your creditors. Also, gather your current interest rate information and identify what your average payment has been. By giving all of this information to your professional debt consultant, they’ll come up with the right consolidation loan for you.

Posted at 08:16 PM | Permalink

When to File Bankruptcy — The Last Resort

Bankruptcy is an option for your personal finances or your business finances but this is a last resort option. There are thousands of people who have chosen bankruptcy over a bankruptcy alternative simple because they lacked information about their options.

Here is how you can tell if no bankruptcy alternative is right for you:

1. If you have personal debts that are well beyond what you can pay. Clearly you should examine alternative options like refinance loans, debt consolidation loans, and other debt solution services. If you get smart professional advice that there is no alternative, then bankruptcy is probably the right option for you.
2. If your business is not generating the revenue to support its bills and you have too much overhead and too many debts, bankruptcy may be an option for you. You business doesn’t even have to close since bankruptcy will shield the business until it can get up and running financially again.
3. If you need to use bankruptcy, then by all means use the option — but don’t be afraid of taking the time to explore and learn about bankruptcy alternatives.

Out-of-Court Settlements as a Bankruptcy Alternative

An out of court settlement is often a better option than filing for bankruptcy. You may have begun the bankruptcy process and have been referred to arbitration or out of court negotiations or the opportunity may present itself to you, but these negotiations can yield results that make everyone happy.

Out of court negotiations are tough to deal with on your own. It is recommended that you hire an independent company to help you negotiate with your creditors. Make sure you hire a reputable company or counselor. Ask for references and make sure that they have no consumer complaints filed with the Better Business Bureau or any other consumer advocacy agencies.

If your out-of-court settlement is conducted improperly, it can hurt your credit. The right help is out there, with the right bankruptcy alternative, it’s up to you to find it.

Filing Bankruptcy with the Help of an Attorney

If you must declare bankruptcy, then make sure you hire a reputable bankruptcy attorney. Bankruptcy attorneys are specially educated about the laws of the state in which they practice and they have the experience to make sure you file correctly. You will pay a fee for a good bankruptcy attorney, but the up front cost is well worth the long term results.

To ensure that you end up with a good attorney, get a referral from your local or regional bar association. They will only refer you to attorneys in good standing. Many bankruptcy lawyers will also see you for a free consultation before they take your case. They will let you know if you are a good candidate or not and whether they can take you on as a client.

Make sure you feel comfortable with the attorney you choose and make sure you understand the fees associated with the bankruptcy and when and what you need to pay. Again, filing for bankruptcy is really a last resort, but if you must file, make sure you hire a professional to help you through the process.

Debt Consolidation as a Personal Bankruptcy Alternative

If you have too much debt, or too many debts, debt consolidation may be a better alternative than bankruptcy for you. If your credit is still in good shape, you can get a great interest rate and you can consolidate all of those creditors.

Here is how a debt consolidation loan can help you get in control of your finances and avoid bankruptcy:

If your problem has been making monthly payments on time, a debt consolidation loan can be a great personal bankruptcy alternative — it will simplify your bill paying. Rather than eight credit card or loan payments, you’ll be making one which is far more manageable. Rather than worrying about payments of different amounts, you’ll have a fixed payment. If you want to learn how to manage money, start small.

In many instances, one of you existing creditors can help you with a debt consolidation loan. Remember, they have a large stake in your avoiding bankruptcy. They want their money back and they may very well be willing to lend you more to pay off credit cards and the like.

Consult with a lending expert to assess whether debt consolidation is the right bankruptcy alternative for you.

Finding an Alternative to Filing Bankruptcy

Filing for bankruptcy seems like an easy way to eliminate debt but it can cost you far more money in the long term. Because the long term damage of bankruptcy is very serious you need to find as many potential bankruptcy alternatives as possible. How do you start?

1. Why are you considering filing for bankruptcy? Do you have a mountain of debt and creditors beating down your door? You do have options including speaking with a debt or credit counselor about getting your finances and your spending back under control. Control and better spending habits are the keys to avoiding bankruptcy, so start now.
2. Look online! If you found this tip, there is more information out there online or in your local bookstore. There are thousands of lawyers, service providers and counselors who will take the time to help you find a bankruptcy alternative.
3. Get a professional to help you traverse the rapid waters of financial instability. They will help you calculate the short term and long term effects of a bankruptcy or an alternative.

3 Questions to Answer When Choosing a Bankruptcy Alternative

How do you decide if bankruptcy is right for you? Here are some tips on what you should think about before you file for bankruptcy:

1. Have you spoken to a financial advisor or credit counselor? Seek information before making your decision to file for bankruptcy. Speak with a professional and make sure you really need to file before you do. They may have a better bankruptcy alternative for you.
2. What are the long term consequences? Bankruptcy can destroy your credit and linger for up to seven years.
3. Have you considered all of your options, really? So many people today are so desperate to get out of their financial troubles that they will take the first option thrown at them. That may be bankruptcy or a bankruptcy alternative. Being desperate can lead you down a path of bad decision making. Review all of your options and speak with different professionals for alternate opinions. Taking your time to make the right decision is better than making a quick bad one and living with the consequences.

The Information You Will Need to File Bankruptcy

How do you decide if bankruptcy is right for you? Here are some tips on what you should think about before you file for bankruptcy.

1. Have you spoken to a financial advisor or credit counselor? Seek information before making your decision to file for bankruptcy. Speak with a professional and make sure you really need to file before you do. They may have a better bankruptcy alternative for you.
2. What are the long term consequences? Bankruptcy can destroy your credit and linger for up to seven years.
3. Have you considered all of your options, really? So many people today are so desperate to get out of their financial troubles that they will take the first option thrown at them. That may be bankruptcy or a bankruptcy alternative. Being desperate can lead you down a path of bad decision making. Review all of your options and speak with different professionals for alternate opinions. Taking your time to make the right decision is better than making a quick bad one and living with the consequences.

Steps to Filing Bankruptcy in Florida

Filing bankruptcy is different from state to state but there are some basic steps that typically must be followed everywhere. Here is a sample bankruptcy process:

1. Gathering Paperwork — You’ll need a listing of all of your income and assets. This includes all income, and big financial transactions and any property or assets you have. You also need to gather all of your living expenses (typically one month’s worth) and all of your debts. You’ll need supporting documentation like tax returns and the like to support your stated income.
2. Filing Bankruptcy — Your property may or may not be exempt from your bankruptcy petition, but once all of the documentation is prepared, you will usually fill our several forms. In many cases, it’s easier to pay the money for an attorney at this point. They can ensure that you complete the documentation properly and that you haven’t missed any reported debt or assets.
3. Automatic Stay — In some states, after filing your petition for bankruptcy, something called an automatic stay will take effect. This stops any foreclosure proceedings, creditors from calling you directly and any activity in terms of loan repayment.
4. Assignment of a Bankruptcy Trustee — A trustee will be assigned to your bankruptcy as once you file your petition, the court assumes legal control of your debts and property. The trustee will review the paperwork you submitted and they may challenge any aspect of your petition if it seems incorrect or improper.
5. Meeting of Creditors — About one month after filing for bankruptcy, the trustee will call a meeting of your creditors, which you will have to attend. If any of the creditors object, there will be a negotiation between the filer or their attorney and the creditor. The judge will render a decision on any matters that are not decided by negotiation.

Using Credit Counseling to Find a Personal Bankruptcy Alternative

If you’re looking for credible bankruptcy alternatives, the best place to start is with a consumer credit counselor or consumer credit counseling service. These services offer credit counseling free of charge and accompanying services. They can include budget counseling, educational programs about credit and money management, housing counseling and debt management assistance.

It is very important that you make sure your credit counseling service provider is reputable. Check with your Better Business Bureau or consider Consumer Alerts — whatever you do, don’t trust anyone with your private information unless they are reputable. Just because they are at the top of Google, doesn’t mean they are the best company to go with. By seeking help you will learn about the alternatives that you have and you’ll learn what you need to do to avoid getting into this situation again.

Liquidation as an Alternative to Filing Bankruptcy

If you are in over your head with debt or creditors, you may want to consider liquidating some assets in order to get cash and pay off your debts. Obviously, there are some things that you can’t part with, but if you have two cars when you really only need one, or if you have extra “stuff” around that has significant value, why not sell it and pay off some debt. One of the most important financial concepts to grasp in money management is that stuff is just that, stuff. Brand name purses, jeans, travel, fancy cars are all just things that don’t mean much anyway. And those things, if they are furthering your financial progress are just hindrances to your future anyway. Start by prioritizing your assets. Are you living in a condo that is too expensive for you? Are you driving a new car when you could buy used? Before you walk down the road of bankruptcy, consider liquidating as an option. You probably didn’t need all that stuff anyway.

Posted at 03:58 PM | Permalink