bankruptcy http://www.wisebread.com/taxonomy/term/8767/all en-US Are We Headed Toward a Bull or Bear Market? http://www.wisebread.com/are-we-headed-toward-a-bull-or-bear-market <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/are-we-headed-toward-a-bull-or-bear-market" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-485863805.jpg" alt="Learning if we&#039;re headed toward a bull or bear market" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The stock market has been on a roll over the last year. Since the winter of 2016, investors have enjoyed a delightful bull market that has seen the S&amp;P 500 index rise by more than 25 percent.</p> <p>Whenever there is a lengthy run-up like this, investors always want to know how long it can last. Are we due for a big correction or even a record-breaking crash? Or will we see the markets continue to rise?</p> <p>Trying to time the market's movement is a fool's game, but it's always smart to look at the various indicators that may foreshadow future performance. With the current market, there is evidence to back up both bullish and bearish predictions.</p> <h2>Indicators of a bull market</h2> <p>The good times won't end anytime soon.</p> <h3>Most economic indicators are strong</h3> <p>For the most part, the American economy is stable. Unemployment is at its lowest point in a decade. Inflation is not out of hand. Manufacturing output is up, along with consumer confidence. There are some concerns about overall growth and productivity, but nothing that spells immediate doom for American investors at this point. Generally speaking, if the underlying foundations of the economy are sound, a sudden drop in stock prices is unlikely.</p> <h3>Interest rates are still historically low</h3> <p>We've seen interest rates creep up a bit, but they are still very low by historical standards. If you're placing money in a bank account, don't expect to receive much in the way of income. Bond yields are also very low. Thus, there's a good chance we'll see people continue to invest in stocks, as they have recently offered much better returns than most other options. As long as interest rates remain low, demand for stocks will be high.</p> <h3>Technical analysis supports it</h3> <p>Many analysts and financial planners prefer to examine a technical analysis of the stock market's performance, which looks at long-term trends that have historically repeated themselves. Most observers of these trends believe we are halfway through a growth cycle that began around 2010 and will continue another five to 10 years.</p> <h3>Corporate earnings are good</h3> <p>The stock market has been known to take a dive when stock prices are high, based on the underlying earnings of companies. In other words, when stocks are overvalued, the market will eventually find out, and you'll see a big correction. Recent earnings reports suggest that the stock market growth is justified. Earnings reports for the first quarter of 2017 look to be among the best in more than five years, so there's no indication that stocks are generally overvalued as a whole.</p> <h3>Lawmakers are pushing pro-business policies</h3> <p>President Trump was elected in part because of promises to lower corporate taxes and reduce business regulations, and he has the majority support of Congress. These are policies that are generally favored by the business community, and investors have responded positively. As long as businesses remain optimistic about policy changes, the stock market will be propped up.</p> <h2>Indicators of a bear market</h2> <p>On the other hand, maybe the good times are about to end.</p> <h3>Companies are heavily leveraged</h3> <p>U.S. companies have more debt than ever, and a lot of it comes due in the next few years. Moody's Investors Services estimated that a record $2 trillion corporate debt will come due between now and 2021, and warned that the market's ability to absorb all of these maturities is &quot;below average.&quot; Few analysts are predicting a massive wave of corporate bankruptcies, but an inability to refinance debt could curb corporate profits and cause stock prices to fall.</p> <h3>There's a possible epidemic of auto loan defaults</h3> <p>When the stock market last suffered a big crash in 2008, it was largely due to a flurry of defaults on mortgage loans. Many Americans obtained home loans that they ultimately could not afford, and ended up in foreclosure when home values dropped.</p> <p>These days, it appears that there may be a similar concern facing the quantity and quality of auto loans. It may not be as big a crisis as the housing bubble, but Americans ended 2016 with a record $1.2 trillion in auto loan debt, an increase of 9 percent from the previous year. Nearly one-fourth of these outstanding auto loans are considered subprime, and the delinquency rate from these loans is at its highest in seven years. This doesn't pose the same systemic risk as the mortgage crisis, but the auto industry is a key part of the American economy.</p> <h3>Europe is facing uncertainty</h3> <p>The United Kingdom is in the process of leaving the EU. There are rumors that other countries (France?) may follow suit. There are lingering concerns over terror attacks in the region. On one hand, economic trouble in the EU may benefit U.S. companies, but many American firms operate in Europe and are impacted by geopolitical uncertainty anywhere.</p> <h3>Political concerns</h3> <p>President Trump and members of Congress have been pushing pro-business policies, but eventually, they will have to deliver the goods. Their struggles in passing a repeal of the Affordable Care Act has been viewed as a sign that they may not have the wherewithal to accomplish big things, such as tax reform. A failure to follow through on any of these major promises could eventually cause a pullback in the markets.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/are-we-headed-toward-a-bull-or-bear-market">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-does-the-stock-market-keep-going-up">Why Does the Stock Market Keep Going Up?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-invest-if-youre-worried-about-a-stock-market-crash">How to Invest If You&#039;re Worried About a Stock Market Crash</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-stocks-to-buy-before-black-friday">6 Stocks to Buy Before Black Friday</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/this-one-mental-bias-is-harming-your-investments">This One Mental Bias Is Harming Your Investments</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-the-dow-will-hit-a-million-eventually">Why the Dow Will Hit a Million, Eventually</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment bankruptcy bear market bull market businesses corporations crash Crisis Economy Europe politics predictions stock market Mon, 15 May 2017 08:00:09 +0000 Tim Lemke 1942751 at http://www.wisebread.com 5 Things You Should Know About Debt Relief Lawyers http://www.wisebread.com/5-things-you-should-know-about-debt-relief-lawyers <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-things-you-should-know-about-debt-relief-lawyers" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/lawyer_justice_gavel_57824452.jpg" alt="What you should know about debt relief lawyers" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Is your combined monthly debt so high that you can't afford to pay your mortgage, utility bills, and car payment?</p> <p>If so, a debt relief lawyer might help. These legal professionals specialize in relieving the debt problems of their clients. And while hiring one won't make your money problems magically disappear, it could be the first step to easing your financial pain.</p> <p>Hiring a debt relief lawyer should not be a quick decision, though. These attorneys usually don't work cheap. Here are five facts you need to know about debt relief lawyers, how they operate and how much working with one will cost you.</p> <h2>1. What They Do</h2> <p>Debt relief lawyers take on a number of tasks for their clients &mdash; tasks that will vary depending on how much debt these clients face.</p> <p>An attorney might negotiate with credit card companies, auto lenders, and other creditors, hoping that these creditors will forgive some of the debt their clients owe. They might work with creditors to set up a payment plan in which their clients only pays an amount that they can realistically afford each month.</p> <p>In more severe cases, debt relief lawyers will help their clients negotiate the bankruptcy process, helping them close either a Chapter 13 or Chapter 7 bankruptcy filing.</p> <h2>2. Chapter 7 versus Chapter 13</h2> <p>If you and your debt relief attorney determine that bankruptcy is the best solution to your debt woes, you'll then have to decide whether to file for Chapter 7 or Chapter 13 bankruptcy.</p> <p>In a Chapter 7 bankruptcy filing, most of your unsecured debt is simply eliminated. Because most debts disappear, many consumers facing debt problems prefer this type of bankruptcy. But a Chapter 7 bankruptcy isn't pain-free. You might lose some of your most valuable assets. Say you have a car, the bankruptcy trustee &mdash; the individual who is overseeing your bankruptcy on behalf of the court in which you file &mdash; might order that car sold. The profits from the sale would then be passed out to your creditors.</p> <p>In a Chapter 13 bankruptcy, a judge sets up a repayment plan that allows you pay back your creditors at a pace and payment level that you can afford. Depending on your bankruptcy agreement, you might have to pay back less than what you owe, but your debts won't be eliminated. You'll have to pay at least a portion of them back.</p> <p>On the positive side, you will be able to keep your possessions &mdash; such as a home and car &mdash; during a Chapter 13 bankruptcy filing.</p> <h2>3. Bankruptcy Won't Resolve All Your Debts</h2> <p>Debt relief attorneys can provide you with a way to ease the burden you face because of your debt. But even if you work with one to file for bankruptcy, they can't magically make all of your debts disappear.</p> <p>The National Association of Consumer Bankruptcy Attorneys says that bankruptcy, even Chapter 7, won't eliminate student loan debts, alimony debt, tax debt, and any debt obtained through fraudulent activities.</p> <h2>4. Debt Relief Lawyers Don't Negate Bankruptcy Consequences</h2> <p>Working with a debt relief attorney to file for bankruptcy could leave you with a fresh financial start. But it won't come without consequences.</p> <p>Both Chapter 13 and Chapter 7 bankruptcy filings will cause your three-digit FICO credit score to plummet, often by more than 100 points. This is significant because lenders rely on this score to determine who qualifies for mortgage, auto, and personal loans. They also rely on the score to determine the interest rates they charge to borrowers.</p> <p>If you have a low score, you'll be stuck with a far higher interest rate, which will make your monthly payment higher, too. The negative pull that bankruptcies have on your credit score will lessen over time. If you pay your bills on time each month, your credit score will gradually recover. Doing so, though, can take years.</p> <p>Even worse, bankruptcy filings remain on your credit report for a long time. A Chapter 13 bankruptcy filing will remain on your credit report for seven years. A Chapter 7 filing will stay there for 10. Every time a lender pulls your report during this time, it will see your bankruptcy filing.</p> <h2>5. Debt Relief Attorneys Aren't Cheap</h2> <p>How much a debt relief attorney charges you depends on the amount of money you owe and what services this lawyer tackles on your behalf. The legal website Nolo says that you might spend from $700 to $2,500 if your debt relief attorney files Chapter 7 for you, but $2,500 to $6,000 if your attorney instead has to file a Chapter 13 bankruptcy on your behalf.</p> <p>If you are paying an hourly fee for the services of a debt relief attorney, you can expect to pay from $125 to $350 an hour, according to Nolo.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" data-pin-save="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F5-things-you-should-know-about-debt-relief-lawyers&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F5%2520Things%2520You%2520Should%2520Know%2520About%2520Debt%2520Relief%2520Lawyers.jpg&amp;description=5%20Things%20You%20Should%20Know%20About%20Debt%20Relief%20Lawyers"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/5%20Things%20You%20Should%20Know%20About%20Debt%20Relief%20Lawyers.jpg" alt="5 Things You Should Know About Debt Relief Lawyers" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/5-things-you-should-know-about-debt-relief-lawyers">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-times-bankruptcy-is-the-right-move">3 Times Bankruptcy Is the Right Move</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-you-need-to-know-the-difference-between-secured-and-unsecured-debts">Why You Need to Know the Difference Between Secured and Unsecured Debts</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/11-steps-to-take-when-bankruptcy-is-your-only-option">11 Steps to Take When Bankruptcy Is Your Only Option</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-debt-management-questions-youre-too-embarrassed-to-ask">5 Debt Management Questions You&#039;re Too Embarrassed to Ask</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/heres-how-debt-settlement-can-make-your-debt-worse">Here&#039;s How Debt Settlement Can Make Your Debt Worse</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Debt Management assets attorneys bankruptcy chapter 13 chapter 7 court credit score debt relief lawyers legal help Tue, 25 Oct 2016 10:00:13 +0000 Dan Rafter 1819828 at http://www.wisebread.com Best Credit Cards to Rebuild Credit After Bankruptcy http://www.wisebread.com/best-credit-cards-to-rebuild-credit-after-bankruptcy <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/best-credit-cards-to-rebuild-credit-after-bankruptcy" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/100525051.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>After filing for a bankruptcy, it might feel like your finances can never recover. The first step to <a href="http://www.wisebread.com/how-to-use-credit-cards-to-improve-your-credit-score?ref=5x">rebuilding your credit</a> is to add on-time payments and responsible use of credit to your credit report. And even though your <a href="http://www.wisebread.com/best-credit-cards-for-bad-credit?ref=5x">credit score is low</a>, you can still find good credit cards available to help those like you rebuild credit even with a previous bankruptcy.</p> <h2>Should I Get a Credit Card After Bankruptcy?</h2> <p>If you have gone through a bankruptcy, then you need to be on guard before applying for a credit card. Many credit cards prey on those with bad credit, charging high fees based on your credit score. Also, if your previous financial troubles were due to overspending and overcharging, it simply may not be wise to jump back into the credit card pool. Begin your road to recovery by making wise financial choices.</p> <h2>What Type of Card Should I Look for After Bankruptcy?</h2> <p>Even though your options for credit cards are limited with a bankruptcy on your record, it doesn&rsquo;t mean you have to settle for a card with high interest and fees. There are good cards tailored for those with bad credit. See below for our recommendations.</p> <p>Once you&rsquo;ve used one of these cards responsibly for about six months, check your credit score again to see if it&rsquo;s gone up. Moving from a &ldquo;bad&rdquo; score to an &ldquo;average&rdquo; score could open up more credit card options for you. Once you&rsquo;ve established a good habit of using credit cards, you can move on to credit cards that offer rewards, benefits, and even cash back. (See also: <a href="http://www.wisebread.com/the-5-best-credit-cards-for-people-with-fairaverage-credit?ref=5x">Best Credit Cards for Average/Fair Credit</a>)</p> <h2>Consider a Secured Credit Card</h2> <p><a href="http://www.wisebread.com/a-secured-credit-card-can-repair-your-credit-score-heres-how-to-pick-the-best?ref=5x">Secured credit cards</a> are a good choice for those recovering from bankruptcy. Many don&rsquo;t run credit checks, which mean one less ding on your score while you&rsquo;re trying to rebuild it. They also require a security deposit which determines your credit line. This means that the opportunity to charge more than you can pay for is diminished. It&rsquo;s the perfect training wheels card for those learning to manage their finances responsibly. At the same time, your on-time payments will be reported to the credit bureaus and your score will begin to recover. We&rsquo;ve listed the <a href="http://www.wisebread.com/the-5-best-secured-credit-cards?ref=5x">best secured credits cards</a> below.</p> <h2>Best Credit Cards After Bankruptcy</h2> <h3>Capital One&reg; Secured Mastercard&reg;</h3> <p><img style="float:right;margin:0 5px 5px 10px;" class="img-exempt" alt="" src="http://www.imgsynergy.com/191x120/capital-one-platinum-and-secured-071515.png" width="154" height="97" border="0" /><a style="border:none;float:right;clear:right;margin: 0 5px 5px 10px;" target=" rel=" href="http://ct.wisebread.com/click.php?pg=229&amp;pid=29&amp;pp=1&amp;uv=xcardbutton"><img alt="" class="img-exempt img-button" src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/apply-now.png" /></a>The <a href="http://ct.wisebread.com/click.php?pg=229&amp;pid=29&amp;pp=1&amp;uv=xname">Capital One&reg; Secured Mastercard&reg;</a> is one of the few secured cards that do not have an annual fee and may extend you a credit line in excess of your deposit. Like all Capital One credit cards, this card has no foreign transaction fees and comes with unlimited access to your credit score along with tools to help you monitor your credit profile. Its variable APR is 24.99% which is high, so it is best to pay off your balance each month on time.</p> <p><a href="http://ct.wisebread.com/click.php?pg=229&amp;pid=29&amp;pp=1&amp;uv=xend"><strong>Click here to learn more and apply for the&nbsp;Capital One&reg; Secured Mastercard&reg; today!</strong></a></p> <h3>OpenSky&reg; Secured Visa&reg; Credit Card</h3> <p><img src="http://imgsynergy.com/product_creatives/40c7232ceaf1df8c2c14e9036c52f363.png" class="img-exempt" style="float:right;margin:0 5px 5px 10px;" alt="" width="154" height="97" border="0" /><a href="http://ct.wisebread.com/click.php?pg=229&amp;pid=24&amp;pp=2&amp;uv=xcardbutton" style="border:none;float:right;clear:right;margin: 0 5px 5px 10px;" target="_blank" rel="nofollow" alt="OpenSky&reg; Secured Visa&reg; Credit Card" title="OpenSky&reg; Secured Visa&reg; Credit Card"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/apply-now.png" class="img-exempt img-button" alt="" /></a>The <a href="http://ct.wisebread.com/click.php?pg=229&amp;pid=24&amp;pp=2&amp;uv=xname">OpenSky&reg; Secured Visa&reg; Credit Card</a> offers a credit line between $200 and $3,000 secured by a refundable security deposit. Its 18.39% variable APR and $35 annual fee is reasonable among secured credit cards. It&rsquo;s a solid option for those struggling to get approved for other cards.</p> <p><a href="http://ct.wisebread.com/click.php?pg=229&amp;pid=24&amp;pp=2&amp;uv=xend"><strong>Click here to learn more and appy for the OpenSky&reg; Secured Visa&reg; Credit Card today!</strong></a></p> <h3>primor&reg; Secured Visa&reg; Gold Card</h3> <p><img src="http://imgsynergy.com/product_creatives/5a524790337ceab31824066a7aa58e85.png" style="float:right;margin:0 5px 5px 10px;" class="img-exempt" alt="" width="154" height="97" border="0" /><a style="border:none;float:right;clear:right;margin: 0 5px 5px 10px;" href="http://ct.wisebread.com/click.php?pg=229&amp;pid=69&amp;pp=3&amp;uv=xcardbutton" title="primor&reg; Secured Visa Gold Card" alt="primor&reg; Secured Visa Gold Card" rel="nofollow" target="_blank"><img alt="" class="img-exempt img-button" src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/apply-now.png" /></a>While it&rsquo;s not optimal, if you need to keep a balance on your card, the <a href="http://ct.wisebread.com/click.php?pg=229&amp;pid=69&amp;pp=3&amp;uv=xname">primor&reg; Secured Visa&reg; Gold Card</a> is the best option, because it carries a low 9.99% fixed APR. It does have a $49 annual fee, which only makes sense if you are taking advantage of the low APR. If you can pay off your balances in full each month, get a card with a lower annual fee.</p> <p><strong><a href="http://ct.wisebread.com/click.php?pg=229&amp;pid=69&amp;amp;pp=3&amp;uv=xend">Click here to learn more and apply for the&nbsp;primor&reg; Secured Visa&reg; Gold Card today!</a></strong></p> <h3>Indigo&reg; Platinum Mastercard&reg; (Unsecured)</h3> <p><img style="float:right;margin:0 5px 5px 10px;" class="img-exempt" src="http://imgsynergy.com/product_creatives/2b6c8b99980b041fdb20f4efc96c4d74.png" width="154" height="97" border="0" alt="" /><a style="border:none;float:right;clear:right;margin: 0 5px 5px 10px;" target=" rel=" href="http://ct.wisebread.com/click.php?pg=229&amp;pid=131&amp;pp=4&amp;uv=xcardbutton"><img alt="" class="img-exempt img-button" src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/apply-now.png" /></a>Even with a bankruptcy, you may be able to qualify for an unsecured card like the <a href="http://ct.wisebread.com/click.php?pg=229&amp;pid=131&amp;pp=4&amp;uv=xname">Indigo&reg; Platinum Mastercard&reg;</a>. This card allows you to go through prequalification without hurting your credit score. The APR is 23.9% fixed. The annual fee is based on your credit score, ranging from $0 to $75 for the first year.</p> <p><strong><a href="http://ct.wisebread.com/click.php?pg=229&amp;pid=131&amp;pp=4&amp;uv=xend">Click here to learn more and apply for the&nbsp;Indigo&reg; Platinum Mastercard&reg; today!</a></strong></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/ashley-eneriz">Ashley Eneriz</a> of <a href="http://www.wisebread.com/best-credit-cards-to-rebuild-credit-after-bankruptcy">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards">The Best 0% Balance Transfer Credit Cards</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/top-5-travel-reward-credit-cards">The Best Travel Reward Credit Cards</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-best-cash-back-credit-cards">The Best Cash Back Credit Cards</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-5-best-secured-credit-cards">The Best Secured Credit Cards</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/credit-cards-that-make-scoring-free-airfare-easy">Credit Cards that Make Scoring Free Airfare Easy</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards bankruptcy best credit cards Fri, 02 Sep 2016 10:30:08 +0000 Ashley Eneriz 1764117 at http://www.wisebread.com Still Without Health Insurance? Here’s How Much the Penalties Will Cost You http://www.wisebread.com/still-without-health-insurance-here-s-how-much-the-penalties-will-cost-you <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/still-without-health-insurance-here-s-how-much-the-penalties-will-cost-you" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/piggy_bank_medical_74187691.jpg" alt="Here&#039;s what it will cost you to live without health insurance" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Health insurance is something we all need. While it may seem like an unnecessary expense at times, not being prepared for a medical disaster can completely devastate your finances. In fact, being plagued by enormous medical bills is the number one cause of bankruptcy filings. There are financial, medical, and psychological costs associated with having no health insurance. Here are just a few:</p> <h2>Steep Penalties</h2> <p>If you <a href="http://www.wisebread.com/heres-when-you-should-switch-to-your-partners-health-insurance" target="_blank">don't have health insurance</a>, the Affordable Care Act (ACA) dictates that you pay a fee or penalty called the &quot;individual shared responsibility payment.&quot; Any Americans who fail to have <a href="https://www.healthcare.gov/fees/plans-that-count-as-coverage/">minimum essential coverage</a> will be charged this penalty.</p> <p>The penalty is <a href="http://obamacarefacts.com/obamacare-individual-mandate/">calculated in two ways</a>, and you will pay whichever of the figures is higher: It amounts to either 2.5% of your total household adjusted gross income, or $695 per adult and $347.50 per child, to a maximum of $2,085. This fee has steadily risen since 2014, so it only makes sense to remain covered. For 2017 and beyond, the percentage will remain at 2.5%, but the flat fee will be adjusted for inflation. If you have health coverage for part of the year, you will only need to pay 1/12 of the annual fee for each month you weren't insured.</p> <p>The penalty is equivalent to the national average cost for a bronze-level health plan, so you would be paying the same amount whether you have health insurance or not. Therefore, it likely won't save you any money to avoid getting health insurance.</p> <h2>What If You Don't Pay the Penalty?</h2> <p>If you don't pay the penalty during tax time, you will not be subject to jail time or any additional fines. However, the IRS can withhold money from your tax refund at the end of the year.</p> <h2>Possible Exemptions</h2> <p>There are <a href="https://www.healthcare.gov/exemptions-tool/#/">certain health coverage exemptions</a> to the individual mandate charged when you file your federal tax return. For instance, certain life events or financial status may qualify you for an exemption.</p> <p>With the <a href="https://www.healthcare.gov/exemptions-tool/#/results/2015/details/short-gap">short gap exemption</a>, if you have health insurance throughout the year, but neglected to have coverage for only one or two months, you may be exempt from the fee. However, even if you only missed one day of coverage in a month, the government will deem that you did not have coverage for that whole month. For instance, if you are insured all year, but didn't have coverage June 30 through July 1, the government declares that you missed two months of coverage.</p> <h2>The Statistics</h2> <p>According to the NY Times, a person between the ages of 25 and 34 has a 5% chance of <a href="http://www.nytimes.com/2013/11/20/your-money/weighing-the-risks-of-going-without-health-insurance.html?_r=2">incurring medical bills</a> of at least $27,000 and a 10% chance of incurring medical bills that exceed $13,000. For Americans under the age of 65, there is approximately a 10% chance of incurring more than $30,000 in medical bills in only one year. A very unfortunate 1% of the population incurs more than $115,000 in medical bills in a single year.</p> <p>This is a significant risk and can spell financial ruin and a potential bankruptcy filing. According to the Harvard Medical School, &quot;Unless you're a Warren Buffett or Bill Gates, you're one illness away from financial ruin in this country.&quot; Having health insurance will not necessarily prevent these startling statistics, but they can help protect you from certain catastrophic medical events.</p> <h2>The Psychological Aspect</h2> <p>There is a very defined psychological benefit of having health insurance. Dan Bailey, a consulting health care actuary and a fellow of the Society of Actuaries, found that people who have health insurance are more likely to pursue necessary services than those who don't have health insurance.</p> <p>You are also more likely to take advantage of preventative medical services if you have health insurance. After all, if you're already paying for it, why not take advantage of the free annual physical? In fact, most people don't have health insurance because they can't afford it, not because they think they're invincible.</p> <h2>Cost vs. Value</h2> <p>The <a href="http://kff.org/interactive/subsidy-calculator/">Kaiser Family Foundation</a> found that a young man between the ages of 28 and 32 can buy a typical silver plan for about $2,800 in annual premiums. While this may end up costing you more than the penalty would, it's not by much. When you consider how much you may end up spending out-of-pocket for something as simple as a back injury, you can clearly see how imperative health insurance really is.</p> <p><em>Do you know of any other monetary or psychological costs of not having health insurance? Please share your thoughts in the comments!</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/andrea-cannon">Andrea Cannon</a> of <a href="http://www.wisebread.com/still-without-health-insurance-here-s-how-much-the-penalties-will-cost-you">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-sign-up-for-health-care-in-2018">How to Sign Up for Health Care in 2018</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-one-question-you-need-to-answer-to-choose-the-best-health-care-plan">The One Question You Need to Answer to Choose the Best Health Care Plan</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-ways-to-spend-your-last-minute-health-care-fsa-funds">8 Ways to Spend Your Last-Minute Health Care FSA Funds</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-one-time-short-term-health-insurance-makes-sense">The One Time Short-Term Health Insurance Makes Sense</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/new-job-dont-make-these-7-mistakes-with-your-benefits">New Job? Don&#039;t Make These 7 Mistakes With Your Benefits</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Insurance affordable care act bankruptcy fees health care health insurance medical bills obamacare Mon, 11 Jul 2016 09:30:35 +0000 Andrea Cannon 1746124 at http://www.wisebread.com 5 Debt Management Questions You're Too Embarrassed to Ask http://www.wisebread.com/5-debt-management-questions-youre-too-embarrassed-to-ask <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-debt-management-questions-youre-too-embarrassed-to-ask" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/couple_stressed_laptop_000070731367.jpg" alt="Couple with debt management questions they&#039;re too embarrassed to ask" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>There are some questions that we're too embarrassed to ask anyone, particularly friends or family. We certainly don't like the idea of letting others know that we have financial hardships. And all too often, we avoid asking the questions at all, preferring to bury our heads in the sand.</p> <p>This, of course, is never a good idea. So here are five of the most common questions about debt that people are too embarrassed to ask, with answers that shed a little light on the subject.</p> <h2>1. When Do I Declare Bankruptcy?</h2> <p>It's a word that strikes terror in our hearts: bankruptcy. It is interpreted as failure. Destitution. The end of the line. However, bankruptcy is not as bad as it sounds. Many famous and wealthy people have declared bankruptcy, and they do just fine. It provides a means to restructure your debts, working with creditors to pay what you owe whilst getting a level of protection that won't leave you penniless.</p> <p>When to declare bankruptcy? Well, that's different on a case by case basis. But, if you can only make minimum payments on credit cards, and are using them to pay minimums on other cards, that's a big warning sign. If you are living paycheck to paycheck, can't pay bills, are about to be evicted, and have absolutely no savings, you're in trouble.</p> <p>However, a simple test is to add up all of your assets, and compare them to all of your debts. If you have way more debt than assets, and creditors are hounding you day and night, it may be time to declare bankruptcy.</p> <h2>2. How Do I Declare Bankruptcy?</h2> <p>If you have decided that, yes, bankruptcy is the only option, the next logical step is to go and do it. But again, that can be a daunting prospect. You first need to know <a href="http://bankruptcy.lawyers.com/consumer-bankruptcy/choosing-the-type-of-bankruptcy-chapter-7-or-13.html">what type of bankruptcy</a> to declare. You hear talk of Chapter 11, but that's a very complex solution usually reserved for businesses. You will most likely want to file a Chapter 7 or Chapter 13 bankruptcy, instead.</p> <p>Chapter 7, also called a straight bankruptcy, is the simplest. This plan liquidates your current assets, if you have any, to pay off as much of the debt you owe as possible. The remaining debt is then haggled over. Some can be forgiven, and the remainder is put into a repayment plan that you can handle. The big drawback with Chapter 7 is that you may lose almost everything you own, including your home, car, and possessions of value. It's a fresh start, but it really does rip the Band-Aid off.</p> <p>Chapter 13 is therefore a better choice for anyone with property. This option is known as a reorganization bankruptcy, and you may well need to do this, anyway, if your annual income is too high to qualify for Chapter 7. Both options have many rules and regulations.</p> <p>Once you determine the type of bankruptcy you prefer, the process begins by filing a two-page petition to your district bankruptcy court, alongside supporting forms and a fee of about $300. The best thing to do is search for a bankruptcy attorney in your area, as you likely don't want to navigate these waters alone.</p> <h2>3. How Do I Deal With My Massive Credit Card Debt?</h2> <p>Credit card debt can be crippling. Sadly, many people take on more and more credit cards to help cover costs, and before they know it, they are buried in minimum monthly payments they cannot make. If you find yourself in major credit card debt, you have options.</p> <p>First, do you have any way to take that debt and <a href="http://www.wisebread.com/when-to-do-a-balance-transfer-to-pay-off-credit-card-debt?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">transfer it to loans or other cards</a> with significantly lower rates? A HELOC usually has a much lower rate than a typical credit card, and the repayment terms are much easier, too. Some credit cards offer <a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">zero percent interest on balance transfers</a>, with a small fee (2%&ndash;3% of the balance), or sometimes, <a href="http://www.wisebread.com/5-best-credit-cards-with-no-balance-transfer-fees?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">no fee at all</a>. Shop around.</p> <p>Can you cut costs elsewhere to apply more money to your credit card payments? Is your gym membership being used? Do you need all those cable channels? Can you cut down on meals out, or subscriptions to magazines? Find ways to cut everywhere, and apply all of that to your debt.</p> <p>Finally, try the <a href="http://www.wisebread.com/a-comprehensive-guide-to-the-debt-snowball-method-0">snowball method</a>: Apply as much money as you can to pay off the card with the smallest balance, while making minimum payments on the others. Once that balance is at zero, take all of the payment and apply it to the next card down the line. You get a feeling of accomplishment, and the payments get bigger and bigger on each card, snowballing to create a huge payment by the time you get to your last card.</p> <h2>4. How Can I Improve My Poor Credit Score?</h2> <p>Having a low credit score is not only a little embarrassing, it's also very costly. Your credit score directly influences the kind of financial deals you are going to get. If you want to see better percentage rates on loans and credit cards, or avoid being turned down for any kind of credit, you'll need to address the issue.</p> <p>Now, this is not something you can fix overnight. A low credit score takes years of behavior into account, and it will take more than a few weeks to reverse your past misdeeds. But, you can start taking steps to improve it immediately. (See also: <a href="http://www.wisebread.com/7-ways-to-increase-your-credit-score-quickly?utm_source=wisebread&amp;utm_medium=seealso&amp;utm_campaign=article">7 Ways to Increase Your Credit Score Quickly</a>)</p> <p>First, get a copy of your credit report from <a href="https://www.annualcreditreport.com/index.action">AnnualCreditReport.com</a>. It's free, and you can see exactly what you're dealing with. Ensure there are no mistakes. And as mistakes do happen to a lot of people, you can begin correcting those errors. Any faulty late payments or delinquencies can be addressed, and your credit score will rise when they're removed.</p> <p>Next, look at all your credit card balances. Do you have small amounts spread over lots of cards? If so, you'll want to consolidate those debts onto just a few cards, and use only those cards going forward. However, DON'T close out the other cards. That can actually hurt your score. Leave them open; they are a history of good credit and they improve your credit utilization ratio, which measures how much of your available credit you have free to use.</p> <p>In the future, you will want to make sure you pay every single bill on time. Technology is a wonderful thing, so use it. Create a calendar on your phone or computer that lets you know when bills are due. And, use auto-pay when you can to avoid any kind of late fees.</p> <h2>5. What's the Difference Between Good and Bad Debt?</h2> <p>Some people even wonder, &quot;How can debt ever be a good thing?&quot; Well, there is a significant difference, and if you know what it is, it can have a real impact on what you spend your money on, and how you spend it. (See also: <a href="http://www.wisebread.com/8-signs-youve-crossed-from-healthy-debt-to-problem-debt?ref=seealso">8 Signs You've Crossed From &quot;Healthy&quot; Debt to &quot;Problem&quot; Debt</a>)</p> <p>Let's start with good debt. This is anything that creates value over time. Most people consider buying a home good debt, because the investment will grow in value, and will ultimately lead to more money at the end of the day. Other examples include student loans, which are an investment in yourself and future income, and business loans, which should ultimately lead to greater revenue. Of course, all of those examples have been marred by things like the collapse of the housing market, or the lack of well-paying jobs after graduation, but as a general rule, they are still considered good debt.</p> <p>Bad debt, on the hand, doesn't create any value. It's money spent on disposable items, high-interest rates, and anything else that contributes to &quot;spending without eventual financial gain.&quot; For instance, putting a $1200 clothes spending spree on a credit card is bad debt. A new car loan is actually bad debt, because cars depreciate in value. Even dining out is bad debt if you keep ringing it up on the credit card, and only pay off the interest each month. So, be careful. You may think it's good debt to put a new suit for work on your credit card, but if it isn't leading to a legitimate financial payoff, it's actually bad debt.</p> <p><em>What are you too embarrassed to ask about debt reduction?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/paul-michael">Paul Michael</a> of <a href="http://www.wisebread.com/5-debt-management-questions-youre-too-embarrassed-to-ask">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-secrets-to-mastering-the-debt-snowball">6 Secrets to Mastering the Debt Snowball</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-you-need-to-know-the-difference-between-secured-and-unsecured-debts">Why You Need to Know the Difference Between Secured and Unsecured Debts</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/pay-these-6-bills-first-when-money-is-tight">Pay These 6 Bills First When Money Is Tight</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/prioritize-these-5-bills-when-youre-short-on-cash">Prioritize These 5 Bills When You&#039;re Short on Cash</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-times-bankruptcy-is-the-right-move">3 Times Bankruptcy Is the Right Move</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management bankruptcy bills credit score embarrassing questions snowball method Tue, 10 May 2016 10:30:04 +0000 Paul Michael 1703948 at http://www.wisebread.com 11 Steps to Take When Bankruptcy Is Your Only Option http://www.wisebread.com/11-steps-to-take-when-bankruptcy-is-your-only-option <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/11-steps-to-take-when-bankruptcy-is-your-only-option" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/000021941715.jpg" alt="Learning steps to take when bankruptcy is the only option" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Filing for bankruptcy can provide a welcome solution for anyone who simply cannot keep up with their debts and credit obligations. But it's never something that should be taken lightly. Bankruptcy can remain on your credit for up to 10 years, making it nearly impossible to apply for credit in the meantime. Having a bankruptcy on your record can even affect your ability to get a job.</p> <p>That's why we've covered the main steps you'll need to take if you're filing for bankruptcy. Consider them before deciding whether bankruptcy is right for your situation.</p> <h2>1. Get Serious About What Bankruptcy Means</h2> <p>Before making the decision to file for bankruptcy, make sure you've explored all other options, like debt consolidation or credit counseling. You will also need to determine if Chapter 7 bankruptcy is right for you (as opposed to Chapter 11, 12, 13, or 15). Most individuals choose Chapter 7 bankruptcy, which will release the debtor from some, or all, financial obligations.</p> <p>According to LegalZoom, the entire bankruptcy process should take four to six months to complete. However, keep in mind that a discharge is not guaranteed. Even after filing your petition in bankruptcy court and going through all the motions, your creditors can still object to your discharge. You might also not receive a discharge if you don't fill out all the necessary documents correctly and on time, if you fail to attend any required credit counseling courses, or if you did not fill out the paperwork truthfully.</p> <h2>2. Complete the Means Test</h2> <p>It is important that you complete what's known as the <a href="http://www.uscourts.gov/forms/means-test-forms/chapter-7-means-test-calculation">means test</a>. This standard test will compare your income to your debts to help you determine if you should file for Chapter 7 or Chapter 13 bankruptcy.</p> <h2>3. Hire an Attorney, if Necessary</h2> <p>A bankruptcy lawyer can be invaluable when you're filing your case. A lawyer can explain your options, answer your questions, make informed recommendations, and even fill out the forms for you and make sure they are filed before the court deadlines. At the very least, call a bankruptcy attorney for a free consultation. You will definitely have questions throughout the process and probably need some form of advice.</p> <p>But you don't necessarily need a bankruptcy attorney for the entire process, and many people are able to successfully file for bankruptcy on their own. Filing on your own can save money on attorney's fees, but first consider whether it's the best course of action in your case.</p> <p>Filing for bankruptcy on your own can be very difficult and confusing. There are a number of complicated legal concepts and terms, as well as regular court requirements that you need to keep up with. A bankruptcy attorney can help you get through the process in far less time and stress. Use a free consultation to determine whether you'd benefit from hiring a bankruptcy attorney.</p> <h2>4. Pay the Fees</h2> <p>While bankruptcy can help to eliminate your debt, it can be an expensive process in and of itself. For starters, you'll be responsible for filing the application fees. On average, debtors who file for bankruptcy on their own can expect to spend approximately $300&ndash;$500 filing for bankruptcy. On the other hand, debtors who file for bankruptcy with an attorney usually spend around $2,000 total. Once you schedule your free initial consultation, you can get more information on the fees and when you would be responsible for paying them.</p> <h2>5. Assemble Your Information</h2> <p>Regardless of whether or not you hire an attorney, you'll need to have all of your financial information gathered and organized. You need to analyze your income, expenses, assets, and debts, and determine your property exemptions. You will also need to have basic information like your average monthly income during the previous six months.</p> <p>In order to have a debt discharged, it needs to be listed on your bankruptcy forms. If it is not listed, you may still be responsible for it after the bankruptcy. This is why it's so important to carefully assemble your financial information before you ever file paperwork or attend any credit counseling programs.</p> <h2>6. Determine Which Debts Are Excusable</h2> <p>Bankruptcy can wipe the slate clean when there is simply no way you can pay off your obligations. However, there are still some debts you may be responsible for, such as student loans, child support, and tax debt. It is also important to keep in mind that anyone who cosigned or guaranteed a loan for you will still be obligated to pay.</p> <h2>7. Attend a Credit Counseling Program</h2> <p>Within six months before filing your petition, you will need to attend a credit counseling program at a court-approved agency. The counseling can usually be completed online or over the phone and will only take about an hour or so. There is a fee for credit counseling, but it is usually under $100. When you file your petition, you will need to provide proof that you have completed this program.</p> <h2>8. File the Forms</h2> <p>There are a number of <a href="http://www.uscourts.gov/forms/bankruptcy-forms">bankruptcy forms</a> that need to be correctly filled out and filed on time. Once the packet of forms (also known as a bankruptcy petition) has been filled out, the debtor will normally receive a discharge of their debts approximately a few months later (if your petition is accepted).</p> <h2>9. Automatic Stay</h2> <p>Once you have filed all the necessary paperwork, an automatic stay will go into effect. This prohibits almost all creditors from continuing collection actions against you.</p> <h2>10. Attend the Meeting</h2> <p>Chapter 7 bankruptcies rarely go to court. However, you will need to attend a mandatory meeting (also known as a 341 meeting) with the creditors and court-appointed trustee. During this meeting, your trustee will ask questions pertaining to your bankruptcy petition and finances. Your creditors may also choose to attend the meeting to question you or the trustee, but this usually doesn't happen. If all goes well, you can expect a bankruptcy discharge within approximately 60 days after the meeting.</p> <h2>11. Post-Bankruptcy Obligations</h2> <p>Once you have successfully filed for bankruptcy, you will need to attend post-bankruptcy credit counseling. This is to help you more successfully manage your debts going forward so that you are not in the same position again. They can also help you rebuild a healthy credit history. Once you have completed the debtor's education course, you will get your discharge. At this time, the automatic stay will end and your case will be closed.</p> <p><em>Do you have any other advice for debtors considering filing for bankruptcy? Please share your thoughts in the comments!</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/andrea-cannon">Andrea Cannon</a> of <a href="http://www.wisebread.com/11-steps-to-take-when-bankruptcy-is-your-only-option">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-things-you-should-know-about-debt-relief-lawyers">5 Things You Should Know About Debt Relief Lawyers</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-a-single-mother-in-debt-over-200k-is-fixing-her-finances">How a Single Mother In Debt Over $200K Is Fixing Her Finances</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-times-bankruptcy-is-the-right-move">3 Times Bankruptcy Is the Right Move</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/whats-the-best-way-to-get-out-of-debt">What&#039;s the Best Way to Get out of Debt?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/uk-banks-are-blocking-customers-credit-cards-will-the-usa-be-next">UK banks are blocking customers&#039; credit cards. Will the USA be next?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance bankruptcy chapter 13 chapter 7 credit debt fees means test Fri, 11 Mar 2016 10:30:33 +0000 Andrea Cannon 1660233 at http://www.wisebread.com 3 Times Bankruptcy Is the Right Move http://www.wisebread.com/3-times-bankruptcy-is-the-right-move <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/3-times-bankruptcy-is-the-right-move" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/000008502739.jpg" alt="Learning when bankruptcy is the right move" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Filing for either Chapter 13 or Chapter 7 bankruptcy will cost you, lowering your credit score by 100 points or more. This will make qualifying for new credit cards, a mortgage loan, auto loan, or personal loan nearly impossible, at least for several years after you file. But that doesn't mean that filing for bankruptcy is never the right decision.</p> <p>&quot;We look at bankruptcy as a last resort,&quot; said Leslie Tayne, a debt-relief attorney and founder of Tayne Law Group in Melville, New York. &quot;But sometimes I do advise people to file for bankruptcy. When paying off debt would leave you with no money left over to put food on the table, if it means you can't pay your mortgage, if there is nothing left over, that's catastrophic, and then it makes sense to file for bankruptcy.&quot;</p> <p>But Tayne warns that <a href="http://www.wisebread.com/8-of-your-childhood-heroes-filed-for-bankruptcy">filing for bankruptcy</a> shouldn't be taken lightly. Doing so will damage your credit for up to 10 years. But if there are no other options? There are three times when filing for bankruptcy protection does make sense.</p> <h2>Chapter 13 or Chapter 7? Know Before You File</h2> <p>Before you do file for protection, you need to know the consequences. There are two main types of bankruptcy protection that consumers can typically access: Chapter 13 and Chapter 7.</p> <p>In Chapter 7, you don't repay your debts under a payment plan. Instead, a bankruptcy judge handles the selling of your nonexempt assets to raise enough money to pay back at least some of your debts. Your home might be protected under Chapter 7 bankruptcy, but it's important to check with an attorney first.</p> <p>Under Chapter 13, a bankruptcy judge sets up a repayment plan. Under this plan, you pay back some or all of your debts, but at a rate &mdash; and with monthly payments &mdash; that you can afford.</p> <p>Both forms of bankruptcy will usually drop your credit score by 100 points or more. But Chapter 7 bankruptcy stays on your credit report for 10 years, while Chapter 13 falls off after seven.</p> <p>Lenders will see your bankruptcy filing every time you apply for a credit card, mortgage, car loan, student loan, or any other form of debt. You will struggle to get lenders to approve your applications &mdash; at least for the first several years after filing for bankruptcy protection &mdash; and will often have to pay higher interest rates when lenders do decide to loan you money.</p> <p>When, then, does taking this credit hit make sense?</p> <h3>1. Your Liabilities Are More Than Your Assets</h3> <p>Tayne says that bankruptcy is often the best option when consumers owe so much that their liabilities are far higher than the value of their assets. In such cases, it can be nearly impossible for consumers to catch up with their debts.</p> <p>&quot;If income is far less than expenses, if there is no end in sight even if I help them cut their expenses, then bankruptcy might be the only option,&quot; Tayne says. &quot;If their income will never let them meet the requirements to pay even the minimal amount of what they owe each month? Then bankruptcy might be their only choice.&quot;</p> <h3>2. Negotiations Didn't Work</h3> <p>Before filing for bankruptcy, you should always try to negotiate with your creditors. Many might be willing to reduce the amount of money you owe them if you can prove that you are struggling financially. To prove this, you might have to send your creditors copies of your most recent paycheck stubs and bank statements, anything that will prove that your income has fallen or that your savings are depleted.</p> <p>But if your creditors won't negotiate with you, you might have no other option but to file for bankruptcy protection. Once you do file, a bankruptcy trustee will take over the task of negotiating with the people you owe. These professional negotiators might have more success convincing creditors to forgive at least some of your debt.</p> <h3>3. A Job Loss or Serious Illness Makes It Impossible to Pay Your Bills</h3> <p>Often, people fall into financial troubles because of a catastrophic event, whether a job loss or a serious medical emergency. Bills and debt can pile up quickly when one of these setbacks slashes your ability to generate a monthly income.</p> <p>If a job loss, medical emergency, or other financial disaster has eliminated all or most of your monthly income, and you can't see any way to catch up on your mounting debt, filing for bankruptcy protection might provide you the relief you need on the way to bouncing back from your financial setbacks.</p> <p><em>Have you ever considered bankruptcy?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/3-times-bankruptcy-is-the-right-move">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-things-you-should-know-about-debt-relief-lawyers">5 Things You Should Know About Debt Relief Lawyers</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-debt-management-questions-youre-too-embarrassed-to-ask">5 Debt Management Questions You&#039;re Too Embarrassed to Ask</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/11-steps-to-take-when-bankruptcy-is-your-only-option">11 Steps to Take When Bankruptcy Is Your Only Option</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-rebuild-your-credit-in-8-simple-steps">How to Rebuild Your Credit in 8 Simple Steps</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/building-a-credit-history">Building a Credit History</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management bankruptcy chapter 13 chapter 7 credit score loan repayment Mon, 09 Nov 2015 13:15:44 +0000 Dan Rafter 1605062 at http://www.wisebread.com 9 Cities You Never Knew Went Bankrupt http://www.wisebread.com/9-cities-you-never-knew-went-bankrupt <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/9-cities-you-never-knew-went-bankrupt" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/abandoned_homes_000053069646.jpg" alt="Cities you never knew filed for chapter 9 bankruptcy" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>We all know about the massive Detroit bankruptcy of 2013. The once great &quot;Motor City&quot; entered the record books as the biggest U.S. city ever to file for protection. The problems that caused the financial meltdown were numerous, and included a declining population, low tax revenues, high crime, massive unemployment, and of course, the Industrial Age giving way to the Information Age.</p> <p>But what about other cities in the U.S.? You may not know it, but many more have <a href="http://www.wisebread.com/not-insuring-these-6-things-could-bankrupt-you">filed for bankruptcy</a>. Whether it came about through bad governance, or bad luck, the following nine cities all did the unthinkable, and filed for Chapter 9 bankruptcy.</p> <h2>1. Prichard, Alabama</h2> <p>Nicknamed &quot;The City of Champions,&quot; Prichard did nothing to champion the cause of the South when it filed for bankruptcy in 2009. The problem was the city pensions fund. Back in 2003, the powers that be hired an actuary to do a full analysis of the city's pension plan; they were told, in no uncertain terms, that the funds would be depleted in the summer of 2009. By October of 2009, the city filed for bankruptcy, and the next few years became a living hell for city employees and pensioners. Budgets were not passed, pension checks were not sent out, and Prichard became the embodiment of mismanaged money and ineffective government.</p> <h2>2. Jefferson County, Alabama</h2> <p>Strike two for Alabama. Okay, so it's a county, not a city. But once again, very shoddy mismanagement of government funds, plus a whole lot of unnecessary expenses, led to the most populous county in the state of Alabama filing for Chapter 9 bankruptcy. First, the county authorized a massive and sweeping overhaul of the sewer system in 1996. The updates were needed, but the project was plagued with corruption, overspending, bribery, and a whole host of other problems. There was also meddling with some very risky bond-swap agreements, resulting in a huge amount of debt being piled onto an already heavily-burdened government. By 2008, Jefferson County debt was lowered to &quot;junk&quot; status by Standard &amp; Poor's, and that led to outright bankruptcy in 2011. Of the $4.2 billion in debt, over $3.14 billion was directly linked to the disastrous sewer project.</p> <h2>3. Mammoth Lakes, California</h2> <p>A beautiful mountain town in the Sierra Nevada, this popular hotspot for skiers was forced to declare bankruptcy after a huge property deal became nothing short of an avalanche. It was all over the development of an airport, which was obviously supposed to be a big help for the town's tourism industry. But, after the deal with the developer turned sour, Mammoth Lakes was sued&hellip; and in turn owed the developer some $43 million in restitution. Considering the annual municipal budget for Mammoth Lakes was less than $20 million, they had no choice but to declare bankruptcy in 2012. However, it appears a settlement was reached after the fact, and the town is back on its feet, hopefully with no further plans for a massive airport.</p> <h2>4. Bridgeport, Connecticut</h2> <p>A victim of the deindustrialization of the United States (much like Detroit), Bridgeport suffered from heavy job losses during the '70s and '80s. As the jobs left, the urban center was abandoned in favor of suburban developments, and the decline spiraled from there. After several major upheavals, including a 19-day strike by Bridgeport teachers (over 270 of them were subsequently arrested and sent to jail), things started looking bleak. In fact, it got so bad that a proposal was outlined getting Las Vegas developer Steve Wynn to build a huge casino; how that would have helped is beyond comprehension. But, it fell through, and in 1991 the city filed for bankruptcy. However, despite the filing, the federal court declared the city to be solvent. A kind of &quot;Sorry, deal with it&quot; verdict.</p> <h2>5. Stockton, California</h2> <p>The housing bubble's burst left many towns, cities, and municipalities in dire straits; Stockton was one of those cities. However, there was also a great deal of government excess and financial mismanagement at the center of the Chapter 9 filing. But it was the massive decline in home prices, as much as 70% in some areas, that wiped out the tax base and left the city struggling to pay its debts. Over $1 billion of red ink was stacked up, including money owed to pension plans, civic improvements, and health care benefits. In 2013, the city filed for bankruptcy. Recently, an exit plan was formulated for Stockton and its 300,000 residents. If you have some time to kill, you can read about <a href="http://www.stocktongov.com/government/departments/manager/bankruptcy/">Stockton's Bankruptcy Plan of Adjustment</a>.</p> <h2>6. Gould, Arkansas</h2> <p>One of the smallest places on our list, this modest town in Lincoln County, with just over 1,300 residents, filed for Chapter 9 Bankruptcy protection in 2008. At the time, the government owed over $900,000 to its creditors; a tiny sum, in comparison to the billions of dollars in debt accrued by the likes of Detroit and Jefferson County. But, with only $10 in petty cash, Gould had to declare bankruptcy. Finger-pointing began, and Gould mayor Juanita Stephens claimed the filing came as a result of <a href="http://freerepublic.com/focus/f-chat/2007387/posts">poor bookkeeping</a>, past lawsuits, and &quot;an employee not having submitted payroll taxes.&quot; That's quite the burden to put on one employee.</p> <h2>7. Central Falls, Rhode Island</h2> <p>For the smallest city in the smallest U.S. state, the 2011 Chapter 9 bankruptcy filing was big news. It had been under state control since July of 2010, but could not find a way to resolve its bulging $80 million unfunded pensions and retiree health liabilities. Considering that the city had an annual budget of just $17 million, that's hardly surprising. And of course, the timing was right after the recession, making it even harder to rebuild and raise funds. &quot;Everything was done to avoid this day,&quot; said state-appointed receiver Robert Flanders, Jr. &quot;We tried in vain to persuade our retirees to accept voluntary reductions in their benefits.&quot; That's a tough pill for anyone to swallow.</p> <h2>8. Harrisburg, Pennsylvania</h2> <p>Perhaps the strangest case for a bankruptcy is the one of Harrisburg. It happened in 2011, but the wheels were put in motion in 2003, when the city borrowed over $125 million to rebuild and expand the city's already enormous trash incinerator. It had been shut down by the federal government due to toxic air pollution, but instead of simply starting afresh, the rebuild plan was put into action&hellip; and it started burning money faster than it ever burned garbage. After big delays, contractor problems, cost overruns, and of course, financial mismanagement, the incinerator was finally finished&hellip; but at a cost of over $288 million. It was too big a burden for the city to take, and Chapter 9 protection was the only course of action.</p> <h2>9. San Bernardino, California</h2> <p>Not many people in public office will come out and make definitive and unpopular statements. But two years before San Bernardino filed for bankruptcy, city manager Charles McNeely made a presentation to the council warning of impending financial ruin. &quot;You're headed for trouble, it's a train wreck, you can't keep doing business this way,&quot; said McNeely. He was staggeringly accurate in his predictions, and yet everyone chose to ignore his warnings and go on doing the same old thing. That involved spiraling employee pay, benefit costs, and budgetary gimmicks, coupled with a sharp and continued decline in tax revenues. In August 2010, around two years after the McNeely prediction, San Bernardino had a $40 million budget deficit for the fiscal year, and filed for Chapter 9 protection. McNeely told everyone, and no one listened.</p> <p><em>Has your town gone bankrupt? How'd it affect you?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/paul-michael">Paul Michael</a> of <a href="http://www.wisebread.com/9-cities-you-never-knew-went-bankrupt">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-8"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-money-goals-you-should-set-for-the-holidays">10 Money Goals You Should Set for the Holidays</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-financial-moves-you-should-make-five-years-before-retirement">5 Financial Moves You Should Make Five Years Before Retirement</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/do-these-8-things-to-profit-from-the-improving-economy">Do These 8 Things to Profit From the Improving Economy</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/25-dumb-habits-that-are-keeping-you-in-debt">25 Dumb Habits That Are Keeping You in Debt</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-inflation">Why Inflation?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Financial News bankruptcy budgets chapter 9 debt government funding u.s. cities Thu, 06 Aug 2015 13:00:18 +0000 Paul Michael 1510305 at http://www.wisebread.com Here's What to Do If You Can't Afford Your Mortgage Payment http://www.wisebread.com/heres-what-to-do-if-you-cant-afford-your-mortgage-payment <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/heres-what-to-do-if-you-cant-afford-your-mortgage-payment" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/house_payments_mortgage_000004582800.jpg" alt="How to keep your home if you can&#039;t afford the mortgage payment" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>We know the scenario: Maybe your spouse lost a job, dropping your household income. Maybe your hours at work have been cut. Or maybe your own job has disappeared. Whatever the financial emergency, your monthly mortgage payment has become unaffordable.</p> <p>What can you do if you want to keep your house? There are steps you can take to relieve your burden. But be warned: Most of them involved a sacrifice on your part.</p> <p>&quot;Being faced with the threat of losing your home can force you to make some real serious financial decisions,&quot; said Kyle Winkfield, president and chief executive officer of the Winkfield Group, a financial planning firm in Rockville, Maryland. &quot;There are few things that can keep you as focused on how you are spending your money.&quot;</p> <p>Here are four possible strategies to keep your home when that <a href="http://www.wisebread.com/7-things-you-need-to-know-before-buying-your-first-house">mortgage payment</a> becomes too much of a financial burden.</p> <h2>1. Bring in a Tenant</h2> <p>Rent a room and reduce your expenses. Do you have an extra room in your home? Maybe you have a finished basement that you rarely use. Depending on your municipality's regulations, you might be able to rent out that room. If you're fortunate, that extra income can be enough to help you cover your mortgage payment.</p> <p>Be sure to check with your local government first. You don't want to violate any local ordinances by renting out that extra room on the third floor of your home.</p> <p>If renting a room isn't an option, look carefully at your monthly expenses. Is there anything you can cut to provide some extra dollars for your mortgage payment? You might consider eliminating cable TV subscriptions or gym memberships. Maybe you can cut out restaurant meals and trips to the local movie theater.</p> <p>&quot;Taking a hard look at your budget might be more productive than you think,&quot; Winkfield said. &quot;Depending on how much of a burden that mortgage payment is, you might save enough each month to be able to keep your home until you can somehow boost your income.&quot;</p> <h2>2. Find Part-Time Work</h2> <p>This isn't always ideal, but maybe you can find a second part-time job to bring in enough extra income to help reduce the burden of your monthly mortgage payment.</p> <p>You don't want to spend all of your time at work, and holding down two jobs can be stressful. But so can losing your home to foreclosure. If a second job can help you cobble together enough income to cover your mortgage each month, sign up, and hold that part-time job until you can overcome whatever financial crisis damaged your household budget.</p> <h2>3. Modify Your Mortgage</h2> <p>As soon as you notice that you are struggling to pay your mortgage, call your lender. This can be embarrassing, but it's a necessary step. Ask for help. Ask for a loan modification.</p> <p>In a loan modification, your lender can take several steps to reduce the size of your monthly mortgage payment. It can decrease your loan's interest rate, forgive a portion of your principal balance, or extend the term &mdash; the number of years you have to pay back your loan &mdash; of your mortgage. All of these steps will result in a lower mortgage payment.</p> <p>Be warned, though, that your lender doesn't have to accept your request for a loan modification. You must first offer proof that you have suffered a financial hardship. This can be in the form of bank account statements showing a drop in available funds, paycheck stubs showing that your monthly income has plummeted, or medical bills showing how much you owe because of a recent illness and injury.</p> <p>You must also have the right household income. This can be tricky. Winkfield says that if you earn too much money each month, your lender will deny your modification request because it thinks that you make enough to pay your mortgage. But if you make too little money, your bank will deny your modification request because even after it modifies your loan, you still won't have enough funds to cover your monthly payment.</p> <p>Finding that sweet spot in the middle? That's no easy task.</p> <h2>4. Declare Chapter 13 Bankruptcy</h2> <p>You might be able to keep your home by declaring Chapter 13 bankruptcy protection. But Winkfield says that this should be a last resort. Declaring bankruptcy can hurt your credit score by more than 100 points. And a Chapter 13 bankruptcy filing sits on your credit report for seven years, making it a challenge to qualify for a new mortgage loan or any form of credit.</p> <p>&quot;This should only be used if you have absolutely no other option,&quot; Winkfield said.</p> <p>In a Chapter 13 bankruptcy, a bankruptcy judge drafts a payment plan that allows you to pay back your creditors on a schedule that you can afford. This plan will include more affordable payments to your mortgage lender each month. You'll also get to keep your home.</p> <p>You might also file for Chapter 7 bankruptcy, in which some or all of your debts are permanently wiped out. But this form of bankruptcy protection comes at a steeper price. First, it remains on your credit report for 10 years. Secondly, you might have to sell your home, and other assets, anyway as part of your bankruptcy agreement.</p> <p>Being unable to cover your mortgage is stressful. But being proactive and budgeting creatively can maximize your chances of keeping your home.</p> <p><em>What steps have you taken to overcome mortgage troubles?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/heres-what-to-do-if-you-cant-afford-your-mortgage-payment">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-signs-youre-paying-too-much-for-your-mortgage">8 Signs You&#039;re Paying Too Much for Your Mortgage</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-times-a-refinance-is-the-wrong-move">3 Times a Refinance Is the Wrong Move</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-benefits-of-carrying-a-mortgage-into-retirement">5 Benefits of Carrying a Mortgage Into Retirement</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/citimortage-told-me-to-default-on-my-loan-if-i-want-their-help">CitiMortgage Told Me to Default on My Loan</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/whats-faster-for-mortgage-payoff-100-month-extra-or-1-payment-year-extra">What&#039;s Faster for Mortgage Payoff: $100/Month Extra or 1 Payment/Year Extra?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing bankruptcy loans loss of income mortgage Tue, 14 Jul 2015 09:00:09 +0000 Dan Rafter 1481988 at http://www.wisebread.com 8 Cool Stores We Miss http://www.wisebread.com/8-cool-stores-we-miss <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-cool-stores-we-miss" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/borders_bookstore_000017392179.jpg" alt="Borders bookstore is a cool store we miss" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>It is sadly the way of life that all good things must come to an end. And <a href="http://www.wisebread.com/heres-how-to-get-a-sale-price-match-at-16-popular-stores">retail stores</a> are no exception. When we look back at the places at which we loved to shop, we may have thought they would be around forever. Who could have known that, just twenty years ago, the Internet would come along and change everything.</p> <p>Here are eight of those cool stores that are now just a memory.</p> <h2>1. Sharper Image</h2> <p>Founded in 1977, just 38 years ago, Sharper Image was the brainchild of Richard Thalheimer. Originally a catalog business for jogging watches, it grew into a retail giant known for selling the latest cool gadgets and gizmos designed to help us live better lives (or spend a ton of money on birthday presents). How many of us stopped into a Sharper Image when we were shopping at the mall to sit in the latest massage chair, or test-drive some remote-controlled car or plane?</p> <p>Of course, the Internet took its toll on Sharper Image, with everything in the stores available in some form or another on Amazon, eBay, and a bunch of other online outlets. In 2008, the company filed for Chapter 11 bankruptcy, and closed every single retail store. You can still shop online at <a href="http://sharperimage.com">Sharper Image</a>, but it's just not the same. The retail stores were an experience, not just a place to pop in and buy something.</p> <h2>2. Wild Oats Market</h2> <p>Founded in 1987 in Boulder, Colorado, Wild Oats was at the forefront of bringing natural foods to the masses. From humble beginnings, with just one store, it became the third largest natural food chain in the USA. Wild Oats Markets were a treasure trove of goodies that supplied everything from fresh organic fruit and veg, to coffee beans, canned and jarred goods, snacks, and a whole lot more. But, they were no match for Whole Foods, who tried to acquire the company in 2007. That deal went sour, and as is the case with many stores in the list, Walmart became the reason for the closure of the Wild Oats stores around the country.</p> <p>Now, the only way you can get Wild Oats products is to buy them at a Walmart or a Fresh &amp; Easy store. It's a shame that a store that had its roots firmly planted in delivering the freshest, most natural ingredients ended up being swallowed by the retail giant that is Walmart.</p> <h2>3. Tower Records</h2> <p>There was a reason some people (<em>cool people</em>) loved Tower Records, and others couldn't stand to be in the store. It was claustrophobic; stacked from floor to ceiling with amazing finds, cheap CDs, bizarre DVDs, and a ton of vinyl. Every trip to Tower Records was another chance to broaden your horizons.</p> <p>Started in 1960 by Russell Solomon, it was named after his father's drugstore in the same building as the Tower Theater. It grew into a giant, with stores from the UK to Colombia and the Philippines. But it grew too fast, and too far, and acquired massive debt from the expansion. Chapter 11 bankruptcy couldn't save it, and Tower Records closed the last of its physical locations in 2007.</p> <h2>4. Borders</h2> <p>Once upon a time, when you wanted a book, you went to a local bookstore. Then along came Borders, and combined the humble bookstore with music, coffee, DVDs, and everything else the entertainment enthusiast could want. It was great. But it did have a slight drawback; everything was <em>really </em>overpriced.</p> <p>Sure enough, Borders became a place where you would browse for a half hour, or more, but just never bit the bullet because you could find it cheaper online. And that flaw became the reason the big book chain went under in 2011. Its biggest rival, Barnes &amp; Noble, had a much better pricing model, and the member perks also helped. Not to mention, the big bargain book section as you enter the front of the store. But for some reason, not having a Borders around seems sad.</p> <h2>5. KB Toys</h2> <p>As a kid, seeing the KB Toys logo in the malls and outlets shopping centers was awesome. Although it was no Toys 'R Us, you could always find something cool <em>and </em>affordable in there. As well as name brands, KB Toys carried a lot of the cheaper versions of popular items, and always had special deals and sale items to help stretch your allowance. Having started in 1922, founded by the Kaufman Brothers (KB), it seemed like KB Toys would be around forever.</p> <p>So, what changed? You guessed it. Walmart's buying power and locations meant that KB Toys couldn't compete with the retail giant. They struggled to stay afloat after a bankruptcy in 2004, and then finally closed down in 2009. Toys 'R Us scooped up what remained of the company.</p> <h2>6. Woolworths</h2> <p>Originally known as F.W. Woolworth Co., named after its founder Frank Winfield Woolworth, this was the first &quot;five-and-dime&quot; store in America. Opened in 1878, and re-opened in 1879, &quot;Woolworth's Great Five Cent Store&quot; sold a variety of household goods at discounted prices&hellip;usually at five cents. This pricing model became five and 10 cents, where the term &quot;five-and-dime store&quot; came from. And it was a very successful business for over 100 years, expanding its reach across the U.S. and the world, until the rise of the K-Mart and Walmart brands.</p> <p>Woolworths (or Woolies to those of us who grew up in the UK) became the cheap cousin to those giants, even though we all enjoyed the low pricing and eclectic mix of products. The stores were also much smaller than the big marts, meaning you could find one in a high street or strip mall. On July 7th, 1997, Woolworths closed its last stores in the USA, and changed its corporate name to Venator. Never heard of them? You're not alone.</p> <h2>7. Filene's Basement</h2> <p>If you're a fan of Ross and T.J. Maxx, you were no doubt in love with Filene's Basement. Also known as simply &quot;The Basement,&quot; it was founded in 1908, and was America's oldest off-price retailer. One of the reasons everyone loved Filene's was the annual &quot;Running of the Brides,&quot; which gave future wives the chance to pick up a bridal gown for an insanely low price.</p> <p>You would think any kind of economic crisis would actually help a store that sells clothing at discounts, but for some reason the troubles of 2009 wreaked havoc with the chain. In 2011, the last Filene's Basement closed its doors for good. You can still shop at Filene's Basement online, but the experience is nowhere near the same. And of course, you can't really run anywhere when you're hunkered in front of a computer screen.</p> <h2>8. Hollywood Video</h2> <p>Unlike Blockbuster Video, a store that dominated the movie rental world and abused us with horrendous late fees and big rental prices, Hollywood Video had a much more friendly approach to movies. The store was way cooler inside, opting for a darker, more industrial look, and staying away from the insipid bright lights and nasty carpeting of Blockbuster. They also had $1 rental deals on movies and games, and their pre-viewed purchases were priced to sell. Even when the last Blockbuster store was closing, their old DVDs and Blu-rays were priced higher than new ones on Amazon. It was always fun to pop into a HV and peruse the Friday night films or new releases.</p> <p>Of course, not even a decent chain like Hollywood Video could compete with Netflix, and the many streaming services offered online. It was just impossible for them to stay afloat, and in 2010 the last of its stores closed for good.</p> <p><em>What stores do you miss?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/paul-michael">Paul Michael</a> of <a href="http://www.wisebread.com/8-cool-stores-we-miss">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-5"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/11-ways-to-prepare-for-your-best-black-friday">11 Ways to Prepare for Your Best Black Friday</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-ways-to-avoid-sneaky-online-price-changes">6 Ways to Avoid Sneaky Online Price Changes</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-stores-with-the-best-price-matching">10 Stores With the Best Price Matching</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-retailers-with-the-absolute-best-customer-service">7 Retailers With the Absolute Best Customer Service</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-frugal-skills-you-need-to-survive-black-friday">8 Frugal Skills You Need to Survive Black Friday</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Shopping bankruptcy closed cool stores retail Fri, 10 Jul 2015 13:00:17 +0000 Paul Michael 1484684 at http://www.wisebread.com 8 Reasons You're Bad at Money — And How to Fix It ASAP http://www.wisebread.com/8-reasons-youre-bad-at-money-and-how-to-fix-it-asap <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-reasons-youre-bad-at-money-and-how-to-fix-it-asap" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_bad_finances_000043972528.jpg" alt="Woman learning she&#039;s bad with money and how to fix it" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Perpetually broke? Always holding your breath when you run your credit card, worried your balance has finally tipped over the limit? Living paycheck-to-not-quite-the-next-paycheck?</p> <p>Some people are <a href="http://www.wisebread.com/10-lies-rich-people-never-tell-themselves">bad at money</a>. (I should know &mdash; I used to be one of them.) But you don't have to be that way forever. Here are eight reasons you suck at money &mdash; and how to fix them.</p> <h2>1. You're an Impulse Spender</h2> <p>A little retail therapy is fine and dandy, if it's not a chronic issue that causes you financial distress. Had a rough week? Sure, a splurge on a new pair of running shoes or a shade of lipstick that is inappropriate for work can offer a quick (and temporary) pick-me-up, assuming you have the cash to spare. But if you don't, then retail therapy is a bad idea. Actually, spending just to make yourself quickly feel better is almost <em>always </em>a bad idea.</p> <p>If you just had a baby and hate the way your body looks (I know nothing about this, shut up), then an expensive haircut and a bottle of self-tanner aren't actually going to fix the problem, although they may distract you from the issue for a day or two. If you hate your job, binge-buying a ton of video games may entertain you in your off-time, but won't actually make your working hours any more bearable.</p> <h3>How to Fix It</h3> <p>Check yo'self before you wreck yo'self if retail therapy is a regular habit. At the very least, try to determine exactly what the problem is, find the root of it, and address it head-on. If you need more education to land your dream job, then you should be focusing your finances on that, rather than on needless entertainment.</p> <h2>2. You're Unprepared or Lazy</h2> <p>I waste a lot of money on take out. It's not that I don't like cooking &mdash; because I do &mdash; but that I am truly terrible at meal planning and buying groceries accordingly. When I was single, eating was simply a matter of buying a fresh loaf of bread and some good cheese and maybe some cheap wine, but now I have to feed a whole family, it's become a little more complex.</p> <p>Or perhaps you find yourself paying through the nose for services, like yard or home care, that you could do yourself. There's nothing inherently wrong with paying someone else to perform work for you, as long as you can afford it, but if your budget is stretched, then cutting back makes sense.</p> <h3>How to Fix It</h3> <p>Find ways to make the necessary work more bearable. If it's meal planning, take a look at websites and meal planning apps that help you plan, shop, and cook. Enlist the help of your favorite music while cleaning and doing laundry. Get a lawn mower that works. I had to spend $400 to find a lawn mower that I could start, but that's still cheaper than paying someone to come and mow my lawn every week or so.</p> <h2>3. You Had Bad Money Role Models</h2> <p>Maybe your parents were terrible at money and you learned their bad money habits. It can be hard to break out of this mold if you've been shaped by it since childhood, since old habits die hard. But if you want to put yourself in a better financial situation, you need to forget what you learned growing up and start fresh. Fortunately, it's never too late to learn good money management skills.</p> <h3>How to Fix It</h3> <p>The internet is your friend when it comes to money management. You can peruse personal finance websites (like this one!) or take a <a href="http://www.cicmoney101.org/Course-Catalog/Money-Management.aspx">free online course</a> in money management.</p> <h2>4. You Had No Money Role Models</h2> <p>Maybe no one ever taught you the basics of money management and you've been winging it poorly. (Incidentally, back when I was in school in the last millennium, Home Economics courses taught us how to sew and how to microwave eggs, but never mentioned budgeting.)</p> <p>Parents often believe that they are doing their children a favor by not exposing them to the dirty business of money management. While understandable, the notion is misguided. Sometimes families have to tighten their belts to make ends meet, and it's not wrong to explain to children why they can't go to the movies every weekend.</p> <h3>How to Fix It</h3> <p>If you have kids, you can break the cycle of financial silence by allowing your kids to participate in planning meals and family budgets. Although learning basic money management skills can seem daunting when you're an adult, getting the whole family onboard can make it less grueling.</p> <h2>5. You Try to Keep up With the Joneses</h2> <p>Maybe you idolize people who have a lot, and believe that <em>buying things</em> is the only way to be happy. Or maybe you've just bought into the idea (haven't we all?) that you need to have at least as much as your neighbors in order to fit in.</p> <p>Humans are social creatures, and we tend to care deeply about what our peers think of us. This is, of course, why many advertisers sell an image of who you can be when you buy their product, rather than just selling the actual product.</p> <h3>How to Fix It</h3> <p>Just like occasional shopping sprees, there's nothing inherently wrong with wanting to impress other people, but buying things specifically for the sake of shaping someone else's opinion of you is silly, especially if you don't really need what you are buying. Before you buy anything, ask yourself, &quot;Would I spend money on this if I knew that no one else would ever see it?&quot;</p> <h2>6. You Are the Joneses</h2> <p>Or at least&hellip; you <em>were</em> the Joneses, until financial circumstances changed, and your spending habits didn't.</p> <p>Perhaps you lost your job and now you have to scramble to make ends meet for a while. It doesn't matter that people once envied your brand new car and constantly updated wardrobe; what matters now is putting food on the table and paying the bills. A part of your new life involves adjusting budgets and expectations to meet reality.</p> <h3>How to Fix It</h3> <p>You might find that changing your spending habits is as simple as cooking at home instead of dining out, or learning not to shop as much. Some downsizing might be more serious, like reducing the number of cars that you own or learning to live in a smaller house. Regardless of the size of changes that you have to make, you'll do well to learn to let go of the past and accept the present.</p> <h2>7. YOLO</h2> <p>Hey, I'm totally in favor of living for the moment, but that doesn't mean that you can't save for the future. And while you can't take it with you when you die, you're going to need those savings to help you out in old age (sure, it might seem far away now, but you'll be amazed at how time flies once you hit your 40s).</p> <h3>How to Fix It</h3> <p>Part of the joy of being young is taking calculated risks and enjoying the freedom that comes from a relative lack of responsibility. But that doesn't mean that you have to struggle with money &mdash; money problems are a stressor, and nothing ruins the fun like stress. Learning to live within your means while young is smart, and it's also easier than trying to learn when you are older.</p> <h2>8. You Have&nbsp;Really Bad Luck (or Dumb Relatives)</h2> <p>Not everyone in a lousy financial situation got there through bad habits. I happen to be good friends with a couple who continually ends up having to empty their savings because their families are financially irresponsible, and they find themselves having to bail out spendthrift siblings or medically challenged parents.</p> <p>Medical bills are a major cause of bankruptcy in the U.S.; even people with health insurance can end up losing all of their savings on expensive treatments. Even Medicare and Medicaid don't cover the full cost of many treatments &mdash; my own mother recently went through both chemotherapy and radiation to treat cancer, and would have paid much more out of pocket if she hadn't purchased supplemental health insurance to cover what Medicare would not.</p> <h3>How to Fix It</h3> <p>There's not much you can do when calamity strikes, other than to pick up the pieces and learn from any mistakes (like gaps in insurance coverage). But you can prepare by having emergency savings on hand and being adequately insured.</p> <p><em>Why do you suck at money? More importantly &mdash; how will you fix it?</em></p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" data-pin-save="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F8-reasons-youre-bad-at-money-and-how-to-fix-it-asap&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F8%2520Reasons%2520Youre%2520Bad%2520at%2520Money%2520%25E2%2580%2594%2520And%2520How%2520to%2520Fix%2520It%2520ASAP.jpg&amp;description=8%20Reasons%20Youre%20Bad%20at%20Money%20%E2%80%94%20And%20How%20to%20Fix%20It%20ASAP"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/8%20Reasons%20Youre%20Bad%20at%20Money%20%E2%80%94%20And%20How%20to%20Fix%20It%20ASAP.jpg" alt="8 Reasons You're Bad at Money &mdash; And How to Fix It ASAP" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/andrea-karim">Andrea Karim</a> of <a href="http://www.wisebread.com/8-reasons-youre-bad-at-money-and-how-to-fix-it-asap">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-turn-your-buyers-remorse-into-better-financial-habits">How to Turn Your Buyer&#039;s Remorse Into Better Financial Habits</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/15-surprising-ways-bad-credit-can-hurt-you">15 Surprising Ways Bad Credit Can Hurt You</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-types-of-overspenders-which-one-are-you">5 Types of Overspenders — Which One Are You?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-improve-your-credit-score">How to Improve Your Credit Score</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-ways-you-disrespect-your-money">10 Ways You Disrespect Your Money</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance bad credit bad habits bankruptcy building credit money overspending shopping Fri, 26 Jun 2015 13:00:09 +0000 Andrea Karim 1463013 at http://www.wisebread.com Not Insuring These 6 Things Could Bankrupt You http://www.wisebread.com/not-insuring-these-6-things-could-bankrupt-you <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/not-insuring-these-6-things-could-bankrupt-you" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/couple-budget-468144843-small.jpg" alt="couple budget" title="couple budget" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Getting ahead financially isn't easy. It requires hard work and persistence. So why risk years or even decades of hard work and sacrifice only to lose everything in one unfortunate, very costly event? (See also: <a href="http://www.wisebread.com/marketing-life-insurance-and-behavioral-psychology?ref=seealso">Marketing, Life Insurance, and Behavioral Psychology</a>)</p> <p>&quot;It won't happen to me,&quot; you say? I felt the same way years ago. But life happens. However unfair it may be, over time we all see some of our friends and family members face difficult challenges or even catastrophes. (I'll include a few examples of my own below.) As much as we hope to avoid them, we just can't predict or control all events. But we can at least hedge some of these risks by insuring against them.</p> <h2>What Should I Insure?</h2> <p>Insurance is for the big things. It's to protect you from major events that would cost you more than you can pay for from your short-term financial reserves. In other words, its purpose is to help shield you from serious and potentially devastating financial setbacks.</p> <h2>What Shouldn't I Insure?</h2> <p>As a rule, then, insurance is not for smaller financial risks or expenses you could absorb and pay for in the short term. This is where we often make a mistake &mdash; purchasing insurance or service contracts for goods and services that cost hundreds of dollars or less.</p> <p>Is that to say that you should never consider taking insurance on a cell phone or a computer printer, for example? Maybe not, but be aware of the cumulative opportunity cost of those expenditures. That money could have been used to help you get ahead financially, by paying off an outstanding debt for example. Also, remember that companies that encourage you to buy their service contracts and warranties often make more profit on the warranties than on the actual product or service being insured.</p> <p>So, what are the big things requiring insurance? And what types of insurance can protect you from being wiped out financially? Here are six that cover most if not all of the bases.</p> <h2>1. Health Insurance</h2> <p>By far, the number one cause of bankruptcy in the United States is unpaid medical bills. A <a href="http://finance.yahoo.com/news/pf_article_109143.html">study done at Harvard University</a> identifies medical expenses as a leading cause of 62% of all personal bankruptcies.</p> <p>Even the shortest of hospital visits now costs thousands of dollars. Just a few months ago one of our sons experienced sudden stomach pains, requiring a trip to the emergency room. After a number of tests (isolating the problem as an intestinal disorder) and some antibiotics he was released four or five hours later. The bill? Over $20,000. Thankfully our insurance covered most of the bill and his subsequent treatments. But it's easy to see how a single serious injury or disease, if not adequately covered by health insurance, could deplete your entire savings.</p> <p>And even if you have health insurance, the ever-rising deductibles (sometimes $5,000 or more) can tip you over a financial cliff if they exhaust your short term funds and force you to delay credit card, vehicle, mortgage, and other payments in an attempt to recover.</p> <h2>2. Life Insurance</h2> <p>This one should be a no-brainer. If you have dependents or any unpaid debts or financial obligations that would need to be paid upon your death (not many people can answer &quot;No&quot; to all of those), then you need life insurance. The question is, how much?</p> <p>There are many ways to estimate how much life insurance you need, but I like the following approach:</p> <ol> <li>Determine your household's current TOTAL annual income needs and SUBTRACT income that's available to your spouse/survivor(s) from other existing sources. This will be their NET annual income need.<br /> &nbsp;</li> <li>Multiply this net annual income need TIMES the estimated number of years your beneficiaries will require it.<br /> &nbsp;</li> <li>ADD your total current outstanding debts.<br /> &nbsp;</li> <li>ADD future unfunded expenses (your funeral expense, children's college, etc)</li> </ol> <p>This total should give you a good initial estimate. For a more complete assessment I suggest Tony Steuer's <a href="http://www.amazon.com/gp/product/0984508104/ref=as_li_tl?ie=UTF8&amp;camp=1789&amp;creative=390957&amp;creativeASIN=0984508104&amp;linkCode=as2&amp;tag=wisbre03-20&amp;linkId=ZNPG3SINGOTXRIYR">Questions and Answers on Life Insurance</a> toolbook .</p> <p>My strong preference is term life insurance, not permanent life policies like whole life or universal that include an investment component. As a rough guide, I purchased a $300,000 supplemental term life policy at age 40 for $300 per year, or $25 per month. That premium amount will not change until my mid-60s.</p> <h2>3. Vehicle Insurance</h2> <p>Auto insurance is required by most states. It's actually a collection of policies that protects you from financial loss in three ways:</p> <ol> <li>Property coverage pays for damage to your car, either from a collision or from vandalism, storm damage, or theft (if you have &quot;comprehensive&quot;).<br /> &nbsp;</li> <li>Liability coverage pays legal expenses to others for injury to them or damage to their property in an accident.<br /> &nbsp;</li> <li>Medical coverage pays for the cost of treating accident injuries, and sometimes for lost wages and funeral expenses.</li> </ol> <p>According to <a href="http://www.quickanddirtytips.com/money-girl">Money Girl podcaster Laura Adams</a>, you ought to have &quot;enough auto insurance to cover the total value of all your assets &mdash; such as your home, vehicles, savings accounts, and non-retirement investments &mdash; [in case you are] involved in a lawsuit.&quot;</p> <h2>4. Homeowners Insurance</h2> <p>Like vehicle insurance, homeowners insurance is required when you have a mortgage. It should cover the replacement value of your home and its contents, and it pays for claims associated with fire and certain natural disasters. A liability portion also covers you if someone gets hurt on your property. (See also: <a href="http://www.wisebread.com/8-surprising-things-covered-by-homeowners-insurance?ref=seealso">8 Surprising Things Covered by Homeowners Insurance</a>)</p> <p>If you rent, and the loss of your personal belongings would cause a financial hardship, then you should consider renter's insurance.</p> <h2>5. Disability Insurance</h2> <p>As a young girl my grandmother excelled in school. She loved to read and looked forward to attending college. Her father was a successful stone mason and the family lived comfortably, so paying for college was within their means. Then a work-related accident left him disabled. He never recovered, and he didn't have disability insurance, so his daughter had to quit high school and get a minimum wage job to help the family make ends meet. Needless to say, my grandmother never attended college, and she never had an opportunity to achieve her dreams.</p> <p>This is why having disability insurance is so important.</p> <ul> <li>Approximately one out of four workers entering the workforce today will become disabled for some period of time before they retire.<br /> &nbsp;</li> <li>More than 90% of disabling accidents and illnesses are not work related, which means they aren't covered by worker's compensation insurance.<br /> &nbsp;</li> <li>Social Security is only available after you've been out of work for a year and are completely disabled.<br /> &nbsp;</li> <li>Disability is the leading cause of about 50% of all mortgage foreclosures.</li> </ul> <p>Most employers provide short-term disability insurance to non-contract workers, but they are less likely to offer long-term disability coverage, or if they do it's often less than you need. So look into supplemental disability insurance to make sure your family's needs are covered.</p> <h2>6. General Liability Insurance</h2> <p>Sometimes referred to as umbrella insurance, this is a &quot;miscellaneous&quot; policy. It covers amounts in excess of maximums in other policies, and it provides primary insurance for losses that aren't covered by other policies. Take personal injury lawsuits. However frivolous the claim, defending against a lawsuit can cost thousands. For example, my stepfather works for his local township and he spent over $40,000 clearing himself of an unfounded charge against him by a citizen of the town.</p> <p>Also, have you noticed that insurance companies are narrowing the scope of what they cover in their traditional insurance policies? That same stepfather had storm insurance to cover his primary residence but didn't learn until after last year's Hurricane Sandy that the insurance company wouldn't cover $20,000 in damages to the garage on the same property.</p> <p>Our household has a $1 million umbrella policy that costs about $50 per month. It gives us peace of mind.</p> <h2>Protect What You've Worked Hard For</h2> <p>Joni Mitchell wrote: &quot;Don't it always seem to go that you don't know what you've got till it's gone.&quot; I think that sums it up nicely. It's hard for us to appreciate the consequences of a serious accident or unforeseen event until after it occurs.</p> <p>But bad things do happen &mdash; we see it all around us. So do what doesn't come naturally: protect yourself against your big risks before they happen. Take stock now of your insurance needs and make sure you're covered.</p> <p><em>Have you covered your big risks? How many of these insurance policies do you have? Can you think of any others?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/keith-whelan">Keith Whelan</a> of <a href="http://www.wisebread.com/not-insuring-these-6-things-could-bankrupt-you">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-6"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/still-without-health-insurance-here-s-how-much-the-penalties-will-cost-you">Still Without Health Insurance? Here’s How Much the Penalties Will Cost You</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-fall-for-these-common-obamacare-scams">Don&#039;t Fall for These Common Obamacare Scams</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/going-without-health-insurance-in-2015-heres-what-itll-cost-you">Going Without Health Insurance in 2015? Here&#039;s What It&#039;ll Cost You</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/when-dropping-your-life-insurance-is-the-right-decision">When Dropping Your Life Insurance Is the Right Decision</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/generic-drug-price-lists-for-six-major-pharmacies">Generic Drug Price Lists For Six Major Pharmacies - Updated</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Insurance bankruptcy health insurance insurance life insurance Fri, 22 Aug 2014 13:00:02 +0000 Keith Whelan 1190088 at http://www.wisebread.com How to Do a One-Day, Do-It-Yourself Bankruptcy http://www.wisebread.com/how-to-do-a-one-day-do-it-yourself-bankruptcy <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-do-a-one-day-do-it-yourself-bankruptcy" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/8169560070_290a4e1fc4_z.jpg" alt="paperwork" title="paperwork" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p>If your debts have become overwhelming and you&rsquo;re facing a significant financial blow, such as wage garnishment, vehicle repossession, foreclosure, eviction, or utility service disconnection, and you don&rsquo;t have the money for a lawyer, don't panic. While bankruptcy should be a last resort, you do have options. It&rsquo;s possible to file a Chapter 7 or Chapter 13 bankruptcy by yourself to avoid or stop these collection attempts. As soon as you file, the court invokes the immediate protection of the automatic stay, which stops creditors from pursuing all collection activities, including phone calls and letters, and mandates utility companies to restore any disconnected services. Filers may also be able to get back repossessed vehicles. By following this timeline, you can file bankruptcy in a matter of hours. (See also: <a href="http://www.wisebread.com/debt/bankruptcy">How to File for Bankruptcy</a>)</p> <h3>The Night Before: Gather Your Documentation</h3> <p>To file either Chapter 7 or Chapter 13 bankruptcy, you must provide documentation of your debts, expenses, and income.</p> <p><b>Debts</b></p> <p>Gather bills, account statements, and other correspondence for all of your creditors. This not only serves as a record of what you owe, it also ensures that you have accurate creditor information. Improperly identifying creditors can cause those debts to be excluded from the bankruptcy case, leaving you responsible for them. Pull copies of your credit report from Equifax, Experian, and TransUnion to ensure you list all creditors.</p> <p><b>Income</b></p> <p>The court also needs to see proof of your income for the past six months. This includes pay stubs, investment account statements, business profit and loss statements, and documentation of unemployment, Social Security, or other social service benefits. You must also include documentation of any child support or alimony payments you receive.</p> <p><b>Expenses</b></p> <p>The bankruptcy petition requires you to list your monthly household expenses as well, so gather the <a href="http://www.wisebread.com/10-monthly-bills-you-can-slash">bills you receive for utilities</a>, rent or mortgage, and other recurring expenses, such as medical care, and court-ordered support payments. You must also provide estimates of how much you spend each month on things like food, clothing, and education expenses for minor children.</p> <h3>The Night Before: Look for Help</h3> <p>If your financial situation is simple, you may not need any assistance with the filing process. However, if you run into any snags, it&rsquo;s imperative to know where to go for help. Visit <a target="_blank" href="http://www.lawhelp.org/">LawHelp.org</a> or search the Internet for legal aid organizations in your area, most of which offer legal advice both by phone and in person. Although seeking assistance may put a dent in your one-day plan, filing an accurate petition is much more important than speed.</p> <h3>7 a.m. &mdash; Credit Counseling</h3> <p>U.S. bankruptcy laws require all filers to undergo 90 minutes of credit counseling and receive a certificate of completion. Luckily, many courses are available online and over the phone. You can complete the entire process within two hours. The price varies depending on the provider, but in general, the class should cost no more than $50. You can receive a waiver of the course fee if your income is below the poverty line in your state. You can find <a target="_blank" href="http://www.justice.gov/ust/eo/bapcpa/ccde/cc_approved.htm">approved credit counseling providers</a> on the U.S. Courts website.</p> <h3>9 a.m.&nbsp;&mdash; Completing the Petition</h3> <p>The bankruptcy petition consists of a multitude of forms, called &ldquo;schedules,&rdquo; to record your debts, income, expenses, and assets. You can <a target="_blank" href="http://www.uscourts.gov/FormsAndFees/Forms/BankruptcyForms.aspx">download the bankruptcy petition paperwork</a> from the U.S. Courts website, under the &ldquo;Official Forms, Instructions, and Committee Notes&rdquo; heading. The list may seem daunting, but the Courts website provides an <a target="_blank" href="http://www.uscourts.gov/uscourts/RulesAndPolicies/rules/BK_Forms_Current/B_200.pdf">index of the forms</a> you need to file each type of bankruptcy. Give yourself at least five hours to compete the petition; more if you need to take breaks to stretch, eat, fish toys out of the toilet, etc.</p> <p><strong>Means Test</strong></p> <p>Officially known as the &ldquo;Statement of Current Monthly Income and Means Test Calculation,&rdquo; this is the first form you should download and complete. This form walks you through calculations to determine if your income requires you to file Chapter 7 or Chapter 13. If your income is above the median in your state and you have at least $150 in disposable income each month, you have to file Chapter 13 bankruptcy and create a repayment plan for your debts. If it falls below the median income, you must file Chapter 7 bankruptcy and surrender any non-exempt assets.</p> <p><strong>Income</strong></p> <p>Use the documentation you gathered earlier to give a complete account of your average monthly income on Forms B 22A, B 6I and B 7. Do not leave anything off, even if it is a small amount or it was given as a gift. The courts will examine your finances carefully, and any dishonesty here can be cause for the judge to dismiss your case for fraud.</p> <p><strong>Debts</strong></p> <p>List creditor names, addresses, account numbers, and the amount you owe on form B 1. Describe whether the debts are secured, such as <a href="http://www.wisebread.com/the-different-types-of-loans-a-primer">mortgages and car loans</a>, or unsecured, such as credit cards, on Forms B 6E and B 6F. If you file Chapter 7 bankruptcy and have secured debts, you must fill out Form B 8 and declare your intention to either keep the property serving as collateral for the debt and continue paying, or surrender the property and be free of the debt.</p> <p><strong>Expenses</strong></p> <p>Your average monthly expenses go on Forms B 22A and B 6J. As with the other forms, be thorough. Leaving off a valid expense could place you over the Chapter 7 threshold or cause you to make higher payments in a Chapter 13 payment plan.</p> <p><strong>Assets</strong></p> <p>If you file Chapter 7 bankruptcy, you must list your assets on Forms B 6B and B6C. This includes real estate, vehicles, jewelry, electronics, collectibles, fire arms, cash, and funds in bank accounts. The document requires a description of the property, as well as the current value. If you don&rsquo;t know the exact value of an item, look in the newspaper, in online classified ads, and on web auction websites for the cost of items similar to yours and estimate from there. The court will perform its own valuation if it seizes the property for creditors or thinks your figure is incorrect. Most of the time, the value of your property will not exceed the exemption threshold in your state, so it&rsquo;s unlikely that you will have to give anything up. You can check the exact exemption amounts by visiting your state&rsquo;s bankruptcy court website.</p> <p><strong>Chapter 13 Payment Plan</strong></p> <p>If you file Chapter 13 bankruptcy, you must come up with a three- to five-year plan to use your disposable monthly income to repay your debt. There is no official form, so if your state&rsquo;s bankruptcy court website doesn&rsquo;t provide one, you must create the plan in a word processing program. Bankruptcy laws require you to pay off priority debts first, or at least bring them current. These include non-dischargeable debts such as taxes and child support, as well as secured debts. Once you pay those, the plan requires you to pay as much of your unsecured debt as possible each month until the end of the plan term. The court discharges any unsecured debt remaining at the end of this time, and you will no longer be responsible for paying it.</p> <h3>2 p.m. &mdash; Filing the Petition</h3> <p>Filers without legal representation must submit the completed petition and the credit counseling certification in person to the court clerk and pay the appropriate fees by cash or money order. To file Chapter 7, you must pay a filing fee of $299. The Chapter 13 filing fee is $279. If you cannot pay the entire fee up front, the court will accept installment payments. People with income that is less than 150% of the federal poverty guidelines can receive a complete waiver of the Chapter 7 filing fee. There is no waiver available for Chapter 13 filers. The clerk will give you a document to prove that you filed.</p> <h3>3 p.m. &mdash; Mission Complete</h3> <p>Once the paperwork is in, the filing process is complete. You are under the full protection of the automatic stay, so you can fax or mail copies of the document to your creditors, who are then legally required to cease all <a href="http://www.wisebread.com/always-answer-the-call-expert-advice-on-debt-collection">collection activities</a> immediately.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/lauren-treadwell">Lauren Treadwell</a> of <a href="http://www.wisebread.com/how-to-do-a-one-day-do-it-yourself-bankruptcy">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-7"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/heres-how-debt-settlement-can-make-your-debt-worse">Here&#039;s How Debt Settlement Can Make Your Debt Worse</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-deal-with-collection-agencies">How to Deal With Collection Agencies</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-you-know-when-it-s-time-for-bankruptcy">How You Know When It&#039;s Time For Bankruptcy</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/diy-plastic-surgery-this-is-not-a-hoax">DIY Plastic Surgery: This Is Not A Hoax.</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-annoying-things-bill-collectors-cant-do-and-how-to-stop-them">4 Annoying Things Bill Collectors Can&#039;t Do -- And How to Stop Them</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Consumer Affairs Debt Management DIY bankruptcy Creditors emergency plan Fri, 18 Jan 2013 10:48:41 +0000 Lauren Treadwell 961916 at http://www.wisebread.com Slow and Steady Wins the Debt Race http://www.wisebread.com/slow-and-steady-wins-the-debt-race <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/slow-and-steady-wins-the-debt-race" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/4680102985_9943b53fb2_z.jpg" alt="running marathon" title="running marathon" class="imagecache imagecache-250w" width="250" height="240" /></a> </div> </div> </div> <p>When I woke up to the reality of having $20,000 of credit card debt, I had to face this hard truth &mdash; I didn&rsquo;t get into debt overnight, so I&rsquo;m probably not going to get out of debt overnight.</p> <p>In fact, it took me four and a half years to pay off my debt. There were plenty of times throughout that journey when I wished there was some easy way to just wipe it all out.&nbsp;But there was no easy way. I don&rsquo;t recall ever considering bankruptcy. I racked up all that debt. I needed to pay it all off.</p> <p>So I did. Slowly. Month after month, I sent big checks to creditors, paying dearly for trips I had taken long ago and restaurant meals I no longer remembered.</p> <p>Today, with the perspective that time brings, and with lots of experience helping others struggling with debt, I honestly believe that the slow and steady way out of debt is the best way. (See also: <a href="http://www.wisebread.com/how-to-start-fighting-debt-today">How to Start Fighting Debt &mdash; Today</a>)</p> <h2>The Danger of Fixing Symptoms</h2> <p>For many people buried under a mountain of debt, bankruptcy looks appealing. A quick way to end the pain.</p> <p>However, according to a paper published by the <a href="http://bdp.law.harvard.edu/papers.cfm">Bankruptcy Data Project</a>, a Harvard University-based research group that has studied bankruptcy for over twenty years, one year after filing for bankruptcy, one in four filers were struggling to pay routine bills, and one in three said their overall financial situation was similar to or worse than when they filed.</p> <p>Tossing your debt overboard may feel good for the moment. However, for many people, ditching debt without addressing the underlying causes often turns out to provide only short-term relief.</p> <h2>Lasting Changes Require Changes of the Heart</h2> <p>When I was blindly digging my way into debt, I saw buying stuff as the route to feeling good about myself. I bought things I couldn&rsquo;t afford in order to tell the world I <em>was</em> somebody.</p> <p>I also saw carrying a balance on credit cards as normal behavior. How else did most people get by?&nbsp;</p> <p>I probably could have learned some helpful new behaviors around money without changing these attitudes &mdash; how to use a budget, how to set up an emergency fund, and the like. But without a serious attitude adjustment, I doubt I would have been interested. Or, if I did start dabbling in new habits, they probably wouldn&rsquo;t have lasted very long.&nbsp;</p> <p>A psychiatrist friend tells me that attitudes and behaviors work in circular fashion to bring about change. Behavioral changes tend to alter our attitudes, and attitudinal changes tend to alter our behavior. However, they don&rsquo;t usually happen on the same schedule. While we may be able to force ourselves into some short-term behavioral changes, attitudinal changes take time. You can&rsquo;t just slap on a new conviction like cologne.</p> <h2>Getting on the Slow Track</h2> <p>To be sure, getting out of debt requires behavioral changes. You need to stop going any further into debt. You also need to gather the facts. How much debt do you have?&nbsp;Write it all down, and add it all up. Create a <a href="http://www.soundmindinvesting.com/visitors/res/resources.htm">cash flow plan</a> (AKA, a budget). Then start rolling a <a href="http://www.wisebread.com/a-comprehensive-guide-to-the-debt-snowball-method-0">debt snowball</a>.</p> <p>However, getting and <em>staying </em>out of debt also requires the slower work of heart change. Start by taking a close look at your financial attitudes. Are there any ways of thinking that have contributed to your debt? Have you been buying things you can&rsquo;t afford in order to feel better about yourself, like I did?</p> <p>Acknowledging those attitudes is the first step toward changing them.</p> <p>One of the key attitudinal factors that helped me turn things around was accepting responsibility for my debts. The credit card companies didn&rsquo;t manipulate me into carrying balances on my cards.&nbsp;My parents didn&rsquo;t fail me in some way.&nbsp;</p> <p>It wasn&rsquo;t about beating myself up about my debts; it was about acknowledging the truth. I was responsible for my debts.</p> <p>To be sure, some people with debt problems have gotten into financial trouble by way of horrendous life circumstances. A divorce, an extended period of unemployment, catastrophic medical bills. I don&rsquo;t mean to be insensitive to any of that. But it&rsquo;s been my experience that when a person with debt owns their role in the debt &mdash; and most people with debt played at least <em>some</em> role &mdash; they have a far greater chance of getting and staying out of debt.</p> <p>If you have a lot of debt and you&rsquo;re just beginning the process of getting out from under, I&rsquo;m sure the idea that it may take several years doesn&rsquo;t sound the least bit appealing. However, I&rsquo;m thankful to have taken the long way out. It took time to change my money-related attitudes and cultivate some healthy financial habits. Since paying off the last of my debts some 15 years ago, I have carried no debt other than a reasonable mortgage.&nbsp;</p> <p>I firmly believe that taking the slow road was the key to making changes that have stuck.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/matt-bell">Matt Bell</a> of <a href="http://www.wisebread.com/slow-and-steady-wins-the-debt-race">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-8"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-things-you-should-know-about-debt-relief-lawyers">5 Things You Should Know About Debt Relief Lawyers</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/john-cummuta-transforming-your-debt-into-his-wealth">John Cummuta: Transforming Your Debt Into His Wealth</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-debt-management-questions-youre-too-embarrassed-to-ask">5 Debt Management Questions You&#039;re Too Embarrassed to Ask</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-times-bankruptcy-is-the-right-move">3 Times Bankruptcy Is the Right Move</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/credit-counseling-when-you-need-it-and-when-you-dont">Credit Counseling: When you Need it and When you Don&#039;t</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management bankruptcy debt relief slow and steady Fri, 11 May 2012 10:36:11 +0000 Matt Bell 929129 at http://www.wisebread.com Book Review: Debt Free for Life http://www.wisebread.com/book-review-debt-free-for-life <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/book-review-debt-free-for-life" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/debt-free-cover-wide.jpg" alt="Cover of Debt Free for Life" title="Cover of Debt Free for Life" class="imagecache imagecache-250w" width="250" height="126" /></a> </div> </div> </div> <p><a href="http://www.amazon.com/gp/product/0767929861/ref=as_li_ss_tl?ie=UTF8&amp;tag=wisbre08-20&amp;linkCode=as2&amp;camp=1789&amp;creative=390957&amp;creativeASIN=0767929861"><em>Debt Free for Life: The Finish Rich Plan for Financial Freedom</em></a> by David Bach</p> <p>There are really two steps to getting out of debt. First, cure whatever problem lead to you getting into debt. Second, pay down the debt.</p> <p>David Bach's new book seems to be aimed at people for whom taking the first step is mainly a matter of exhortation &mdash; that is, people who are in debt primarily because they've been unable to resist the lure of easy credit. The right message for them is simply &quot;don't do that,&quot; and the book does a good job of delivering that message, hitting all the right notes &mdash; how expensive credit is, how risky it is, how dangerous it is, and how it utterly thwarts your ability to build capital. (See also: <a href="http://www.wisebread.com/good-debt-bad-debt">Good Debt, Bad Debt</a>)</p> <p>Having delivered that message, Bach goes on to walk people through the second step &mdash; getting the debt paid down &mdash; with careful attention. He calls his procedure the DOLP method, short for Done On Last Payment. (He says that it was formerly Dead On Last Payment, but that readers suggested that Done was more motivating than Dead).</p> <p>The DOLP method is a variant of the classic debt snowball, where (after making the minimum payment on each debt) you apply all your additional cash to one debt. (The name comes from the way your additional cash snowballs as you extinguish each individual debt and are able to add its minimum payment into the additional cash to apply to the next debt.)</p> <p>The two main variants are:</p> <ol> <li>Pay down the highest-rate debt first.</li> <li>Pay down the smallest debts first.</li> </ol> <p>Option two is often recommended as &quot;more motivating&quot; because you can see some early success (the first debt quickly paid off) and you get to see the snowball effect in action &mdash; that minimum payment getting added to the additional cash to apply to the next debt.</p> <p>Bach's DOLP method aims to improve on option two by arranging to pay off <em>whichever debt can be paid off most quickly</em> (not necessarily the smallest, because different debts have different minimum payments).</p> <p>Option one (highest-rate debt first) is generally the cheapest way to get out of debt, if you can manage it. But Bach makes a good case that his DOLP method may well be cheaper in practice, because the more debts you have, the more opportunities you have to miss a payment, pay the wrong amount, or have a payment go astray &mdash; and just one late fee can easily eat up all the savings from getting the high rate debt paid off first.</p> <p>There's a lot to like here.</p> <p>I particularly like Bach's look at student loan debt, with a careful analysis of just how pernicious that system has become in the United States (leading so easily to the <a href="http://www.wisebread.com/wage-slave-debt-slave ">wage-slave, debt-slave trap</a>), with the bad news nicely ameliorated by a thorough look at the various alternatives for dealing with student loan debt. If you've got debt problems and any of it is from student loans, that chapter alone could be easily worth the price of the book.</p> <p>Bach also has a good chapter at how to find any money that you've misplaced &mdash; forgotten bank accounts, lost tax-refund checks, savings bonds that have gone astray, etc. (See Lindsay's post on <a href="http://www.wisebread.com/everything-you-need-to-know-about-unclaimed-property ">Everything You Need to Know About Unclaimed Property</a> for a quick look at the same topic.)</p> <p>The sections on credit counselors and debt-settlement companies are also very good and well worth reading if you're considering using either one. (There's nothing they can do that you can't do yourself, if you're willing to put some effort into learning how such things work.)</p> <p>Two things in the book struck wrong notes for me.</p> <p>The first has to do with what Bach chooses to present as unbreakable rules versus what he presents as suggestions. There <em>are</em> unbreakable rules in personal finance &mdash; for example, you have to live within your means &mdash; but many other things are just a matter of style. When Bach suggests &mdash; in italicized capital letters &mdash; that to succeed &quot;you must make your plan automatic,&quot; I know that he's wrong. (I've <a href="http://www.wisebread.com/pay-yourself-last-is-okay-too ">never made an automatic payment</a> in my life, and yet here I am: debt-free, with enough savings and investments that I can afford to be a full-time writer.) I don't doubt that he's speaking from experience, having seen many people who had failed in the past succeed once they put their bill payments on automatic, but it would work better for me if he'd just said that.</p> <p>The second has to do with that first step for getting out of debt &mdash; curing whatever problem got you into debt in the first place. As I mentioned above, Bach's audience seems mainly to be people whose problem with debt comes from the fact that they overspend. All you have to do is look around to see that, even as the great recession winds down, there are a lot of people who need that message. But there are also people who don't fall into that category. For example, people who borrowed <a href="http://www.wisebread.com/how-debt-fools-people ">perfectly ordinary amounts of money</a>, and then suffered a loss of income, need to take a different approach to curing the problem &mdash; as do people who are in debt because of huge medical bills.</p> <p>It's worth comparing this book to Feeney and Connolly's <a href="http://www.amazon.com/gp/product/0470498862?ie=UTF8&amp;tag=wisbre08-20&amp;linkCode=as2&amp;camp=1789&amp;creative=390957&amp;creativeASIN=0470498862 "><em>Road Out of Debt</em></a> that I <a href="http://www.wisebread.com/book-review-the-road-out-of-debt ">reviewed</a> last month. That book, written by a bankruptcy judge and a bankruptcy attorney, is probably a better choice for someone whose debt is so large that it cannot be paid back (although Bach's book also has an excellent chapter on bankruptcy).</p> <p>For its target audience, though &mdash; people whose debt problem is mainly a result of overspending &mdash; <a href="http://www.amazon.com/gp/product/0767929861/ref=as_li_ss_tl?ie=UTF8&amp;tag=wisbre08-20&amp;linkCode=as2&amp;camp=1789&amp;creative=390957&amp;creativeASIN=0767929861"><em>Debt Free for Life</em></a> is a great choice.</p> <p><em>Disclosures: I received a free copy of </em>Debt Free for Life<em> for review. This post contains affiliate links, and I will earn a commission for any purchase made through these links.</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/philip-brewer">Philip Brewer</a> of <a href="http://www.wisebread.com/book-review-debt-free-for-life">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-9"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-debt-management-questions-youre-too-embarrassed-to-ask">5 Debt Management Questions You&#039;re Too Embarrassed to Ask</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-times-bankruptcy-is-the-right-move">3 Times Bankruptcy Is the Right Move</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-things-you-should-know-about-debt-relief-lawyers">5 Things You Should Know About Debt Relief Lawyers</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/credit-counseling-when-you-need-it-and-when-you-dont">Credit Counseling: When you Need it and When you Don&#039;t</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/book-review-the-road-out-of-debt">Book Review: The Road Out of Debt</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management bankruptcy book review debt advice Wed, 13 Apr 2011 09:48:19 +0000 Philip Brewer 523954 at http://www.wisebread.com