Bankruptcy Resource Group

February 26, 2009

Top Celebrity Financial Mistakes & How To Avoid Them

Filed under: Budgeting, Online resources, Uncategorized — Tags: , , , , , , — C.Welch @ 11:45 pm

Looks like an icebergNo matter how many palaces they show on Cribs or how many lightening-fast sports cars they drive, celebrities often make the same mistakes as average consumers.  In fact, many celebrities who come into sudden, fabulous wealth make more mistakes.  I like to think of this as the iceburg syndrome.  When celebrities make a mountain of ice (money), they often assume it’ll last as long as the icecaps.  Newly rich and newly famous, they spend like Midas, not noticing how fast the ice is melting, until one day they find themselves facing bankruptcy.

Econ4U.org has a great list of the top celebrity financial mistakes, and what we can learn from them.  Gary Coleman and Britney Spears are listed as stars who lost their icebergs through poor financial planning.  Despite raking in more than $700,000 a month in 2007, Britney saved nothing for investment or education.  Gary Coleman let his handlers manage his $8.3 million dollar trust fund.  He filed for bankruptcy in 1999, claiming his handlers had squandered his fortune.

So, today’s lessons:

  1. Track your expenses
  2. Save for a rainy day

All you really need to start tracking your expenses is a notepad and pencil.  Whip it out of your pocket and jot down any amount you spend during the day.  Add everything up daily, weekly, or monthy, and you might be surprised to learn where your money really goes.

As for saving, a basic rule of thumb is that you should save at least 10% of your takehome pay.

If Britney and Gary had followed these simple, timeless financial rules, they could have avoided financial meltdown altogether.

Top photo by Nick Russill

February 25, 2009

How to Avoid Healthcare-Induced Bankruptcy

Filed under: Budgeting, Financial News, Health Care, Politics, Rebuilding Credit, Uncategorized — Tags: , , , , , — C.Welch @ 5:52 am

StethoscopeIn his first speech to both chambers of congress, Barak Obama mentioned a fact that probably perked up the ears of all Bankruptcy Survivors.  In his call for health care reform, the President pointed out that every 30 seconds, another American files for bankruptcy due to  sky-high health care bills.

While the President used this fact as a rhetorical device meant to drive home his cry for reform, Bankruptcy Survivors knew one powerful fact:  life goes on, even after a bankruptcy.  Sure, filing for bankruptcy is difficult.  It’s nearly impossible to avoid a span of constant worry just before and during a bankruptcy.  But once it’s over, there are ways to rebuild credit, and even rebound.  After all, how else would we explain second bankruptcies?

Still, we woudn’t wish bankruptcy on anyone.  So, for those who wish to avoid a first or second bankruptcy, here are a few tips to help you save costs on healthcare.

1) Prevent Your Way To Health. I hate to sound like the world’s oldest broken record on this one, but many Americans suffer from preventable health problems.  So, take care of yourself.  Eat well.  Exersize.  Don’t smoke.  Avoid stress.  Do what makes you happy.  If every American followed these dictums, we would cut our national health care costs by millions.

2) Choose Generic. Sometimes you can’t avoid getting sick.  Airplanes, classrooms, and hospitals are unavoidable institutions for most Americans.  Still, when you do get sick you can cut costs by choosing less expensive treatments.  One way to cut treatment costs is to buy generic drugs.  Seriously, they have the same ingredients in exactly the same portions.  Why should a brand matter?  Does your body really know the difference?

3) Make a Bargain and Pay in Cash. The costs associated with collecting health bills is astronomical.  If you’ve been scanning the classifieds lately, you’ve probably noticed the abundance of positions in health care adminstration.  Ok, perhaps not an abundance, but most colleges say health care is one of the fastest growing fields in the American economy.  If you pay in cash, the doctor gets more profit, since he doesn’t have to pay for the collection services.

And don’t be afraid to bargain for a lower price, especially if you’re paying in cash. Contrary to popular belief, hospital costs aren’t set in stone.  Some thrifty consumers even call their insurance company to ask what they charge doctors, and then ask their doctor for the same price.  This sometimes acts to deflate the inflated sticker price of most hospital costs.

If you’ve already been through a bankrutpcy and eager to rebuild your credit, you may consider taking out a car loan.  Making regular payments on a vehicle shows creditors you’re resonsible and deserving of a higher credit rating. Bankruptcy Resource Group can help you find a local car dealer who specializes in post-bankruptcy credit.  Call Bankruptcy Resource Group today to learn more, or fill out their easy online application.

Top photo by Chris Farrugia.

February 22, 2009

Rebuilding Credit Through Collateral Credit Cards

Filed under: Online resources, Rebuilding Credit, Uncategorized — Tags: , , , , , , — C.Welch @ 5:18 am

Credit Cards by Andres RuedaJust a few months ago, banks were handing out credit like candy. Borrowers could easily find funding for their next big purchase. And banks were happy to extend credit, since it added to their long-term income.

My, what a difference six months makes. After last September’s stock market tumble, banks became much more selective. It became harder to get credit for large purchases. Now, even those with high credit ratings may find it difficult to find willing lenders.

Even before the economic meltdown, bankruptcy survivors often faced additional challenges when hoping to borrow. And yet, this is exactly what consumers should do after a bankruptcy in order to rebuild their credit. BankruptcySurvivor has often pointed to car loans as one way to rebuild credit after a bankruptcy. A collateral credit card is another such method.

When opening a collateral credit card, the borrower puts up a certain amount as collateral.  This amount is equivalent to or higher than the amount that may be borrowed.  Savings accounts, cash, stocks, and jewelery may all be used as collateral.  If you fail to repay what you borrow, the lender will keep your collateral.  Such collateral-backed loans are usually for less than $1,000, and they may be a good way to slowly but surely rebuild your post-bankruptcy credit.  Tomorrow, we’ll review considerations and cautions for collateral credit cards.

If you’re rebuilding your credit following a bankruptcy, Bankruptcy Resource Group can help.  Bankruptcy Resource Group specializes in partnering Bankruptcy Survivors with car dealerships that specialize in helping consumers with less-than-perfect credit.  Thanks to an extensive nation-wide network, Bankruptcy Resource Group can find a friendly car dealer near you.  Apply today to take advantage of Bankruptcy Resource Group’s resources and connections.

Top photo by Andres Rueda.

February 20, 2009

When will the Creditors stop calling? When they get the disharge.

Filed under: Attorneys, Rebuilding Credit, Uncategorized — Tags: , , , , — C.Welch @ 12:09 am

the red phone One of the most irritating aspects of personal bankruptcy is the nagging calls from creditors. Even if you make it clear that you’re unable to make payments, many lenders continue to call. These calls can lead to constant, nagging stress as you realize just how far in debt you are.

Fortunately, if you’re planning to file for bankruptcy, you can expect the calls to stop soon. How soon? Here are a few tips to remember on how creditors decide when to stop calling.

Following bankruptcy proceedings, lenders are required to stop all collection efforts, including telephone calls.

In legal terms, this is called a discharge. A discharge is the legal method for debt forgiveness following a bankruptcy. Once the judge puts a discharge on a loan, the lender is legally barred from seeking payment on that loan. (There are certain niceties and examples, like liens, that we’ll talk more about later.)

After your bankruptcy case, the court mails notices to all of your lenders. These notices inform the creditors that they must stop collecting on your debts, since you have filed bankruptcy. It can take a couple of weeks for all of these notices to be received. If an especially annoying collection company is getting on your nerves, ask your bankruptcy lawyer to contact the company and tell them that you’ve filed for bankruptcy. If the collector continues to hound you after they’ve been informed of your bankruptcy, they could face legal fees or court sanctions.

Bottom line: you may have to wait a couple of weeks for the calls to stop, but they will end after your bankruptcy. Once they do, be sure to maintain healthy spending habits like tracking your expenses.

Even though you probably came to detest those credit companies, it’s likely that you’ll be needing their help again sometime in the future. To get credit for larger items later, you’ll need to start rebuilding your credit after your bankruptcy. One great way to do this is to buy a car on credit. By making regular, on time or early payments on a car, you’re telling the credit agencies that you’re a responsible consumer who deserves a higher credit rating. After a few years of this kind of behavior, the credit agencies are usually happy to agree with your message.

Bankruptcy Resource Group can help set you up with a local dealer who specializes in working with people after a bankruptcy. Apply today to tap into their web of friendly auto dealerships.

Via FindLaw & CreditInfoCenter


Top photo by Nicolas Nova.

February 18, 2009

How to Talk to Kids About Finances

Filed under: Family Finances, Uncategorized — Tags: , , , , , — C.Welch @ 8:19 pm

boy with five bucksThe depressed economy is hard enough for adults. After all, thousands of people have lost their jobs, thousands more may lose their homes, and all Americans are probably feeling a little scared and stressed out in the face of the economic melt down. A friend of mine commented the other day, “I’ve never been through a depression. I don’t know how to act. I have a job, but I’m still worried.”

Even though you might be as concerned as my friend, that doesn’t mean you need to pass it on to your kids. Childhood only rolls around once, so let them enjoy it without worrying too much about the economy or your personal finances. To talk to your kids about money, make positive statements about managing expenses.

Here are a few more tips on talking to kids about money, from NPR’s Day to Day:

1) Don’t complain to your kids. Avoid passing on your worries to them. Kids under 6 or 7 won’t understand anyways, but they’ll sure be affected by your attitude. Older kids might have a better understanding of world events, but worrying about your family’s finances will only keep them awake at night. Even if you’re concerned about paying the bills or making the mortgate, leave your kids out of this discussion.

2) State limits positively. When little Mariya or Jacob asks for that shiny new toy or mouth-watering candy at the supermarket, use positive phrases to say no. Instead of saying, “We can’t afford that. Put it back,” try saying something like, “As a family, we’re working hard to budget our money to save for a vacation later this year. That’s not in the budget, so please put it back.” Not only will this approach keep your kids calm, it will teach them the value of careful money management.

3. Encourage them to save for themselves. Sometimes, kids have strong desires that just won’t disappear. When I was a kid, I dreamed about a certain drumset every night. No matter how many times my mom said she wouldn’t buy it for me, my mind kept returning to that drumset, like a mental boomerang. So, I saved money and earned it. Mom paid me a dime for every chore I did, so I saved that. I baby sat. I raked leaves. I washed cars. I did anything I could to make money for that drum set. And in the end, I bought it, fair and square, with my own money.

That drum set is long gone, but the sense of accomplishment from earning something with my own work is still in my heart. Let your kids find this marvelous feeling for themselves– encourage them to take on little jobs and start saving their money.

Top photo by Nate Ritter.

February 13, 2009

Be fearless this Friday the 13th

Filed under: Budgeting, Rebuilding Credit, Uncategorized — Tags: , , , , , , — C.Welch @ 7:39 pm

34584848_6d8826a2f5_mThe Stress Management and Phobia Institute in Asheville, NC estimates that as many as 21 million people suffer from paraskavedekatriaphobia, or fear of Friday the 13th. Some are unable to function normally on this day; their fear traps them at home, or prevents them from executing business decisions. It has been estimated the $800 to $900 million is lost on Fridays that fall on the 13th, perhaps due to superstitious would-be consumers.

Statisticians are conflicted on whether Friday the 13th is actually more accident-prone. The Dutch Centre for Insurance Statistics says fewer accidents occur in the home and on the roads on Fridays that fall on the 13th, since people are more likely to stay at home. People may also be more cautious on Friday the 13th, to offset the unluckiness of the day. However, the British Medical Journal has stated that traffic accidents are more likely on Fridays the 13th.

Personally, I dismiss superstitions like this as poppycock. Sure, I might slip into a lucky pair of socks today, but I know at my core that I create my own destiny, and my circumstances are thanks to my own actions, especially when it comes to money. As Tracey Piercy points out, financial stability has little to do with luck, and everything to do with planning. We may see a burned down house and lament the unluckiness of the homeowners, but isn’t that what home insurance is for? We can create our own luck by carefully monitoring and planning our finances.

If you’re exiting a bankruptcy, you’re probably eager to create good habits for financial health, such as budgeting your expenses, using credit wisely, and tracking expenditures. What you may not be as gung-ho about is finding ways to rebuild your credit. After a bankruptcy, your credit is fragile. Like an infant, it must be lovingly cared for until it grows big enough to sustain you, the parent. One way to rebuild credit after a bankruptcy is to take out a new car loan. By making consistent payments every month, you’re telling the credit agencies that you are a responsible, thoughtful consumer. After a string of consistent on-time payments, you could see your credit score increase.

Bankruptcy Resource Group can help you reach your goals. They’ve compiled a network of car dealerships that work specifically with people who have been through a bankruptcy. Check out their website to learn more, and best of luck! (Not that you’ll need it– careful planning is all the luck you need.)

Top photo by Andreas Cappell.

February 11, 2009

Debts That Bankruptcy Won’t Erase

Filed under: Uncategorized — Tags: , , — C.Welch @ 7:58 am

By alkruse24 at Flickr.

Bankruptcy wipes most of your credit slate clean.

Although the idea of filing for bankruptcy fills many consumers with dread, it can be the best option, especially when your heavy debts are unlikely to ever be repaid without a significant change. Filing for bankruptcy can be that much-needed change. After bankruptcy, you have a clean financial slate. Your assets have been distributed by the bankruptcy judge, and most of your debts have been settled.

However, even bankruptcy can’t erase all of your debts. Here’s a list of debts that will still remain after your bankruptcy:

  • money owed for child support or alimony, fines, and some taxes;
  • debts not listed on your bankruptcy petition;
  • loans you got by knowingly giving false information to a creditor, who reasonably relied on it in making you the loan;
  • debts resulting from “willful and malicious” harm;
  • student loans owed to a school or government body, except if:– the court decides that payment would be an undue hardship;
  • mortgages and other liens which are not paid in the bankruptcy case (but bankruptcy will wipe out your obligation to pay any additional money if the property is sold by the creditor).

Via BankruptcyInformation.com.

February 9, 2009

What qualifies as an asset in personal bankruptcy?

Filed under: Attorneys, Mortgages, Taxes — Tags: , , , , , , — C.Welch @ 5:45 am

415534472_6ed594a861_mFiling for personal bankruptcy is a good idea for consumers who can’t keep up with the bills. If you’re wondering whether bankruptcy is a good idea for you, read our article to help you decide. As you prepare your files for filing for bankruptcy, you may have questions about common terms.

One term that will come up frequently as you move through your bankruptcy proceedings is asset. In simple terms, an asset is anything of value that is owned by an individual or business. Depending on your state of residency, you may be required to allow the judge to use property and other assets to pay off your debts. There are two categories of assets: tangible and intangible. Nearly all of the assets listed in a personal bankruptcy case will be tangible; intangible assets, like goodwill, copyrights, and trademarks, are generally carried by businesses. For your reference, here’s a list of common assets.

  • Your house. If you’re paying off a mortgage, your house could be the largest asset on your books.
  • Your car. Even if you’re still paying off your car, it is considered an asset by the court.
  • Cash, savings accounts, and checking accounts. Even though you may not have much in these accounts if you’re going through a bankruptcy, their contents are considered assets.
  • Other property. Real estate holdings, material goods, and sometimes even edibles may be included in your list of assets.
  • Stocks and other investments. Savings bonds, stocks, mutual funds, and other investments are assets.
  • Amounts you are owed. As we recently discussed, even your tax refund may be considered an asset, as it is an amount that the government will pay you.

To be sure you’re including the right assets, and keeping as many as possible for life following your bankruptcy, find a good bankruptcy attorney.

And if you’ve already emerged from your bankruptcy, and are looking for an easy way to obtain new assets, give Bankruptcy Resource Group a call. They can help you find a local car dealership that specializes in helping consumers who have been through a bankruptcy.

Top photo by PAM.

February 6, 2009

Exempting Tax Refunds from Bankruptcy Proceedings

Filed under: Attorneys, Mortgages, Taxes — Tags: , , — C.Welch @ 8:01 am

If you went through a bankruptcy in 2008, you might be wondering how your bankruptcy could complicate your taxes, and for good reason. The state certainly considers your bankruptcy a significant event. Otherwise they wouldn’t require you to keep it on your record for ten years. Although it’s always a good idea to be careful when filing your taxes, it’s crucial following a bankruptcy. Starting today, Bankruptcy Survivor will examine issues surrounding bankruptcy and taxes.

Some Americans are lucky enough to look forward to a tax refund. If you happen to belong in this elite group, congrats. The government effectively owes you money. In this sense, your tax refund is an asset. And as you know if you’ve been through one, the bankruptcy trustee could decide to use assets may to pay debts.

Some states allow people to “exempt” their tax refunds, meaning that they are beyond the reach of bankruptcy suits. If you’re lucky enough to live in one of those states, you won’t have to give your upcoming tax refund up during your bankruptcy settlement.

We’ll keep digging up information on just which states allow exemptions, and how to file for them, but until then, consult with an experienced bankruptcy attorney to make sure you get to keep the most money for living expenses following your bankruptcy.

If you are up for a refund this year, and you’re considering applying for a car loan, here’s a tip: rather than researching, calling, and being rejected by nearby car dealerships, just give Bankruptcy Resource Group a call. They’ve already built a nation-wide network of car dealerships that specialize in working with people who have been through bankruptcy.

Via JD Supra.

Top photo by Michael Karshis.

February 5, 2009

How to Make Bad Credit Look Better, Part II

Filed under: Rebuilding Credit, Uncategorized — Tags: , , , — C.Welch @ 6:19 am

2678307443_76ede25042_mYesterday, we dove into the procedures for reviewing and correcting your credit report. Today we continue with a few steps to take after you’ve checked your reports for accuracy, submitted disputes to the credit agencies, and attempted to negotiate with your lenders.

Ask your creditor to vouch for you. Ask the collection agency or creditor to write you a letter vouching that once you’ve paid the full amount due, they will remove negative marks from your credit. They’re usually more than happy to do so, since in the end, they just want to be paid.

Remember the Rule of Seven. Bankruptcies stay on your record for ten years. After that point you may have your record expunged in many states.

Just as you would keep track of the passing years to be sure to have your record expunged, you want to keep an eye on the age of your debts. If all else fails, time is on your side. You have the right to a clean slate every seven years. The credit agencies may still claim that you owe them after that time. Simply dispute their claim, highlight that it has been more than seven years, and your record should soon be cleared.

As you practice self-discipline in sticking to your new payment arrangements, remember to pay bills early, use credit wisely, and budget your expenses. It may take a few years of work, but you can improve your credit score.

As I mentioned yesterday, Bankruptcy Resource Group can help if you’re looking for a way to re-establish credit following a bankruptcy. Check out their website to learn more.

Top photo by Michael “Mike” L. Baird, bairdphotos.com.

Older Posts »

Powered by WordPress