How to Navigate Your Way Through Bankruptcy

how to navigate your way through bankruptcy

When you’re in over your head with debt, everything seems overwhelming. It takes over your life in many ways. In fact, according to Health.com, it affects both your physical and mental health. In a 2014 article by Amanda MacMillan, those with greater debt were shown to have higher blood pressure, which can lead to heart disease, as well as anxiety and depression. In addition, because of the stress that comes with debt issues, it is thought that it could possibly be a contributing factor to a suppressed immune system, the article adds. Declaring bankruptcy can be a solution to a clean slate, but it does not come without consequences. If you feel this is the route for you, you’ll need to know how to navigate your way through bankruptcy.

In today’s article, I discuss what you need to know about the process so you can determine if it’s the right choice for you.

How to Navigate Your Way Through Bankruptcy:

  • Understand what filing means. Before looking into this as an option, you should understand what filing for bankruptcy implies along with what type of debt you have. For instance, your credit card debt may be wiped clean, but your student loans and secured debts would not qualify.
    • Note: Only in cases of extreme hardship will your student loans even be considered, and even then, it is highly unlikely.
  • Determine what brought you here. If you do need to file for bankruptcy, think about what actions have brought you to this point. From paying monthly bills late to using credit cards to pay off other credit cards, you need to be able to recognize where the problem stems so that you can take steps to avoid this situation in the future.
  • Contemplate filing when facing home foreclosure. Filing for bankruptcy when facing home foreclosure can actually help protect you from foreclosure proceedings. And, as reiterated in this AllLaw.com article, you will want to do so before foreclosure rather than after. This will save up some time for you to work with your mortgage company to work out a loan modification or refinance so that you do not lose your home. If you file after, the article states, you run the risk of not having your tax debt eliminated, not to mention it won’t prevent creditors from pursuing collection activities.
  • Consult with a personal bankruptcy attorney. It is best to always consult with a professional when possible, and many provide the first meeting at no charge. By doing so, you should at least obtain enough information to know what will be best for you or how they may even be able to help file in the case of a home foreclosure threat (as mentioned above).
    • Although paralegals are well-educated and professional, they cannot give legal advice legally, which means you may not get the answers you need. This is why an attorney will be a better choice.
  • Be leery of information from bill collectors. Some bill collectors may try to steer you in the wrong direction by telling you that regardless of your filing for bankruptcy, you’ll still have to pay them. However, they are likely misleading you in an effort to be paid. Most of your bills will be covered depending on the bankruptcy option you file.
  • Stop paying bills that will be eliminated (but don’t run up all your credit cards). While you should stop paying on the debt that will be discharged, you should not exhaust all the money on your credit cards during this process. This looks bad to the judge working on your case and will hurt you in the long run. Instead, save money from the bills you’ll no longer have to worry about and pay toward the other bills that will remain.
  • Immediately start working on building your credit. Depending on the type of bankruptcy you file for, your credit may or may not be affected for up to ten years. When you file Chapter 7 bankruptcy, it likely will stay on your record for ten years; however, you can still work on reestablishing your credit. Pay bills on time or in advanced as up to 35% of your report is calculated based on payment history. There are other ways you can put yourself in good standing, which you can read about here. Additionally, make sure after then ten year mark that you contact the credit reporting agencies with your discharge notice to ensure they remove this from your record at that time.

The above are just a few ways how to navigate your way through bankruptcy, but hopefully, you only consider this route as a last resort. Make sure you reach out to friends and family to explore your options as it will be important to have a strong support system during this time, especially with how financial stress can affect an individual in more ways than one.

Have you ever had to file for bankruptcy? What was your experience? 

5 Easy Tips for Simplifying a Home Budget

tax breaks for 2016Preparing a home budget can be an uphill task especially if you haven’t done it before. In fact, this is one of the main reasons that most people avoid developing a budget. But it could also be because they do not really know what budgeting means and therefore they cannot develop one efficiently. The truth is, making a budget is not about using complex formulas or tedious calculations. Like other things in life, budgeting becomes easy to do when you keep it simple. Here are some easy tips that you can use to simplify the budget making process in your home:

  1. Create a schedule

Making a schedule and sticking to it can really simplify your work when it comes to creating a budget for your home. For instance, you can opt to make a monthly schedule that includes specific dates when you make certain payments. Create drafts from the checking accounts so that the bills get paid automatically. Decide how often you want to buy groceries in that month as well, one day each week or once every two weeks works best. Pick a day when your children are not around to demand for things that you have not included in the budget. Knowing to you expect and at what point you expect it can rid you of much stress.

  1. Allocate some cash for miscellaneous expenses

Include a small amount to cater for unexpected expenses in your budget. This helps ensure that in case of eventualities like a birthday invitation or an invitation to give a baby-shower gift, you will not be forced to use cash allocated for grocery or other items required in the home. Be sure to track your miscellaneous public storage Portland expenses on a frequent basis so you know when you have exhausted or are almost exhausting them. With time, you may want to consider making this budget item permanent on you budget.

  1. Involve family members

If you have other people living with you like a spouse, involve them when you making the budget. Things can get problematic if one person is doing the planning and all the other person is doing is spending. It helps to have a sitting each month to discuss the budget. Find a way to make this interesting. For instance, you could have some favorite snacks and drinks to keep the discussion focused. Most important is that you all read from the same page, this will certainly make your money and life easier to manage.

  1. Track your expenses

Find an easy way to track your expenses and be intentional in allocating some time each day to do so. Rather than stacking your receipts, world news tools like EveryDollar Plus to help you stream your transactions from the bank instead of keeping a bunch of receipts.

  1. Avoid using credit cards

Opt for debit cards rather than credit cards. Since debit cards come direct from your account, you will not incur a 15% interest. When you do away with credit cards, you will not attract additional bills that add to your budget. Most importantly, you will not live worried about high interest rates and fees.

Tips to Avoid Being Ripped Off by a Life Insurance Plan

Tips to Avoid Being Ripped Off by a Life Insurance Plan

As much as we want to refrain from thinking about death, the fact of the matter is that life is unpredictable. What we can predict, though, is what will happen to our assets and how our families will be taken care of through life insurance. While not an easy nor enjoyable task, you need to research a policy that will work for you. As with anything, there are many companies out there looking to swindle you, so you need to be careful. But, don’t worry; we’re here to help. The following are tips to avoid being ripped off by a life insurance plan:

Tips to Avoid Being Ripped Off by a Life Insurance Plan

Prior to starting your search, it needs to be decided whose life or lives will be covered in a plan and what types of coverage will be available in the case of death. Here’s how you can navigate the process of life insurance shopping:

  • Think about supplementing pension and social security income. A dual-income home no doubt helps to make things easier, but when one spouse passes, you have to live on much less. Life insurance can help alleviate some worry and serve as a partial income replacement for the surviving spouse. In this case, term life insurance is a great choice due specific time frames, but whole life insurance, which is a type of permanent life insurance that assures financial certainty, is even better due to the increasing cash value it provides. The downside, of course, is that it does cost more money. But, with guaranteed growth, it may be worth the investment.
  • Know how the agent gets paid before meeting with him or her. Before even setting up a meeting to look at different policies, find out how your potential agent is paid. Are they compensated through commission or are they salaried? The last thing you need when shopping for life insurance is to be treated like a paycheck. Make sure you’re making decisions that are best for you and not for the agent’s bank account.
  • Use an online calculator. An online calculator, like this one from New York Life, can help you see where you stand and how much your spouse will need to cover expenses. Look for calculators that actually provide information on the numbers and not just try to direct you to an agent.
  • Be open and honest with your agent or broker. It is imperative that you are open and honest with your broker. Be as clear as possible and as open as possible about your current situation and your needs. This will prevent you signing up for a plan that is not right for you, or, worse, an unexpected increase in rates.
  • Know your health history. Often times, you’ll need to have a medical examination when applying for life insurance. Be as prepared as possible by having a list of past surgeries, treated conditions, accidents, medications, and so on. This will make the entire process simpler and quicker for everyone including you.
  • Research the different types of life insurance. Two different main types of life insurance plans were discussed previously (term and whole life), but the two other main plans include universal and variable. Don’t go into a meeting with an insurance agent without having some background knowledge of the specifics of these plans. You’ll be able to make wiser decisions by doing so. This may be one of the more important tips to avoid being ripped off by a life insurance plan.

While we should always remain positive, we should also be prepared for the worst in life. It is an unfortunate thought. However, by taking the steps to protect your family for the future now, you’ll have peace of mind and truly be able to live life the fullest.

What tips would you add to the list?