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Recent Blog Posts
A Brief Guide to Managing Credit Card Debt
Although most Americans have some form of debt, many could have avoided financial hardship by responsibly managing credit cards. Having funds instantly available is a great convenience, but overspending can put a person in a world of trouble.
Minimizing expenses is the first step for getting debt under control. Then, develop a budget that incorporates personal income, assets, and expenses. This can be a difficult task, which is why you should consider consulting a financial advisor or an attorney. If the debt amount is too great to pay off in a reasonable time period, consider discussing the situation with a bankruptcy lawyer.
Reasons and Alternatives to Canceling Credit Cards
According to one source, the most common reason for a person to close a credit card account is to achieve greater financial control. However, closing an account can actually harm your credit score.
How to Deal with the Debt of a Deceased Family Member in Texas
A death in the family is always a difficult time for loved ones. Add to that the financial costs of a funeral, and times of mourning can become even more challenging.
If the deceased has debt, it is important to know if relatives are responsible for paying creditors. When a person leaves behind debt from credit cards and other sources, it may be wise to contact a bankruptcy attorney for guidance.
No two debt cases are alike. If the debt was from an account that a living relative owned, the debt will be theirs to pay regardless of the situation. Debt from joint accounts and co-signed loans may also transfer to living relatives.
Selling Off Assets
When a person dies, it is common to sell assets to pay for debts. In some cases, though, the value of the deceased’s assets is not enough to cover the debt. In these cases, it may be wise to consult a bankruptcy attorney to discuss the options.
Is Taking Out a Loan a Smart Way to Get Out of Debt?
No one wants to be in serious debt, however, carrying some form of debt is unavoidable. To start, everyone needs to build credit, and one of the most effective ways to accomplish this is by taking on “good” amounts of debt and paying it off in a timely fashion.
While credit can be a luxury for some, for others—especially those in a low income bracket—credit becomes a way to help with bills, groceries, and other daily expenses. Unfortunately, even a small amount of debt can be a precursor to bankruptcy if a person falls on hard financial times.
The truth is that filing bankruptcy is a smart decision in many cases. However, there may be other ways to solve debt problems. One method that many people consider is consolidating debt by taking out a loan. This often is an effective strategy, but it is important to understand a few basic aspects about debt and loans.
Tips for Homeowners Who Are Struggling with Mortgage Payment Difficulties
Owning a home is one of life's great accomplishments, and mortgages help people achieve this dream. Home loans, however, can become burdensome when an individual or family enters difficult financial circumstances.
Some homeowners face bankruptcy or foreclosure as a consequence of struggling to meet mortgage payments. Fortunately, experiencing tough economic challenges does not always mean debtors will lose their homes or declare bankruptcy. Here are some helpful tips when monthly payments become difficult to afford:
1. Review Your Mortgage and Contact Your Loan Provider
Understanding the type of mortgage a person has is key to responsible financial planning. According to Bankrate.com, there are three main types of mortgages: fixed-rate, adjustable rate, and a hybrid between the two. These categories may influence the best approach to debt management.
Understanding the Different Forms of Debt
Many Americans are aware different types of debt exist, but may not know some forms of debt are more manageable than others. The type of debt also can affect an individual’s options when trying to file bankruptcy.
According to Investor Place, the average American citizen carries $225,000 or more in debt. This accounts for America’s total debt in credit cards, mortgages, and various loans, as well average interest rates and the percentage of citizens with more than $500 put away in a savings account.
Credit Card Debt
Debt from credit cards is incredibly common. As an unsecured form of debt, banks and lenders consider an individual’s credit score when determining eligibility for credit cards and their credit limits. Unfortunately, high interest rates can make credit card debt escalate quicker than most people realize. Also, having too much debt on a card—even if the card has not reached its limit—can reflect poorly on one's credit score.
What Does Bankruptcy Really Do to Your Credit Score?
Many Americans have a limited understanding of bankruptcy and credit in general. For this reason, financial crises can seem overwhelming and hopeless.
One topic that concerns many debtors who are considering bankruptcy is how the process will affect their credit scores. While bankruptcy will most likely have some impact on a credit score, debtors should not view this option as a financial death sentence.
One of the truest statements about bankruptcy is that it is different for everyone. Sometimes, it is the most appropriate way out of debt; other times, there may more effective alternatives. A helpful way to get a firm understanding of one's financial situation is to sit down with a legal expert who can offer a firm understanding of the law surrounding debt relief options.
Yes, Bankruptcy Will Harm Your Credit Score
Qualifying for a Mortgage after Bankruptcy
Many people who are considering filing for bankruptcy hesitate because they fear their credit will be ruined for years to come and future plans, such as qualifying for a mortgage to purchase a home, will be almost impossible. The good news is that most people who file for bankruptcy are able to repair and build their credit back up within a few years and are able to fulfill that dream of owning their own home.
Most mortgage lenders have certain guidelines they follow when it comes to credit issues such as bankruptcy, foreclosure history and short sales. The following is a standardized list that lenders around the country follow and include conventional lender guidelines, Federal Housing Administration (FHA) guidelines and Veterans Administration (VA) guidelines.
Federal Rules Debt Collectors Must Follow
When a person owes a defaulted amount on an account, such as a credit card or prior utility bill, the company who the original debt is owed to will often “charge off” that debt after a certain period of time has gone by. Someone who is struggling with overwhelming debt may have multiple accounts which have been declared charge offs by the original creditor.
There are certain guidelines a creditor must follow before they can charge off an account. If the account is an installment loan (such as an auto loan or mortgage), then the delinquency must be at least 120 days past due. If the account is a revolving credit account (such as a credit card), then the delinquency must be at least 180 days past due.
At this point, the creditor has three options for debt collection for the account. The company can continue to pursue collection themselves; they can hire a third-party collection agency to continue collection activity; or they can sell the debt to a debt buying company. Debt buying companies purchase debt portfolio from creditors and any funds then collected on the debt belong to the debt buyer.
Bankruptcy Filers Can Now Use Rental History to Rebuild Credit
When a person files for bankruptcy, it takes time for their credit history to “heal” from the painful ordeal of overwhelming debt that caused the bankruptcy filing. As long as person is careful not to overextend themselves, they are usually able to qualify for credit cards, auto loans and even mortgages within several years of filing.
Having taken control of their debt and filing for bankruptcy, a person can also take control of their credit history. Applying for a secured credit card and making the payments on time every month, as well as any other accounts that were not charged off in the bankruptcy, such as a mortgage or auto loan, will increase a person’s credit score enough that they may be able to qualify for unsecured credit within two years following the bankruptcy.
There is now a new way for people to help increase those credit scores and that is with their rental history. In the past, a person’s rental history was never included on credit history reports. If a person has a long history of making on-time rental payments, they never received the credit benefit for that good history like a person who pays their mortgage on-time.
Three Proven Methods to Improve Your Credit Score
To say that a person's credit score is important is an understatement. Your score not only affects your ability to take out loans and successfully apply for credit cards, but it also plays a role in applying for insurance, leasing a car, and even getting an apartment. More than just three numbers, a credit score is a measurable value of how trustworthy a person is with money and payments.
For these reasons, you should make every attempt to raise your credit scores as high as possible. Here are some helpful ways to boost and maintain a respectable credit score:
1. Start with What You Have
As mentioned before, it helps to think of a credit score as an indicator of financial responsibility. That said, the road to a better credit score begins by analyzing one's own financial situation. While this may require sitting down with a professional, here are some basic strategies to get started:
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