Author Archives: Elsa

Credit After Bankruptcy

1. Bankruptcy can appear on your FICO report for considerable amount of time

It’s implied that going into bankruptcy can cause your FICO assessment to quickly plunge. What’s more, it can stay on your credit score report for a longer time than you think.

2. You must really be more financially sound after your bankruptcy

Looking at this logically, you are in reality MORE reliable after your bankruptcy release than you were already. All things considered, you now have the monkey (your loan) off your back and you have a greater number of assets than you had before paying your bills.

3. After the release, each loan or debt you owe should return to $0 on your report

After your release, you have the privilege (ensured by government law) to have the balance of every debt to appear as $0 on your credit report. Actually, you have the privilege to question any cards that still demonstrate your old balance.

4. In some cases, you can still keep a credit card even after bankruptcy

Trust it or not, you can really keep at least one of your old credit cards after discharge. Keeping in mind the end goal to do as such, you have to reassure the balance with them and go into another understanding. The majority of creditors will consent to do this since they would rather not want to bear the loss.

5. Buying a house post bankruptcy

You can purchase a home subsequent to bowing out of all financial debts. Inside 1.5 to 2 years after your release, many individuals routinely can meet all requirements for a credit with a similar loan terms as they would have in case they had not filed. What’s critical at this stage is your pay, any installment or down payment, and how reliably you paid your home loan previously.

Bankruptcy

There are several key people who are part of the bankruptcy process. The person who is in debt and needs to file bankruptcy is called the debtor, and those who are owed money are creditors. This could be individuals, banks, medical companies, or collection agencies, to name a few. A professional bankruptcy attorney can guide you through the process and ensure that your case is resolved without any trouble. Once your attorney helps you with your paperwork and files your case, everything will be reviewed by a court-appointed trustee. You will meet them at your 341 meeting, where they will verify the information you’ve provided and mediate between you and any of your creditors who attend. The trustee is responsible for investigating possible fraud and resolving your case in a timely manner.

First I always suggest to review your situation to decide if bankruptcy is truly the best option for you or if you can make some changes to get your budget back on track. If it’s time to pursue bankruptcy, finding a Bankruptcy Attorney that can help is your best bet as they can provide you with a list of the documents you’ll need to provide and worksheets to guide you as you complete your paperwork. Before filing, you’ll need to complete an online credit counseling course, where you’ll learn more about bankruptcy and have the opportunity to evaluate your budget. Once you have your completion certificate and your required documentation, you or your Bankruptcy Attorney can go ahead and file your case, which starts the automatic stay. This is a legal order that keeps creditors from contacting you to collect debt; if they do contact you, all you’ll need to do is give them your case number and my contact information. Your next step will be to attend your 341 Meeting, which some attorneys will attend with you, followed by a final online credit counseling course. If you’re filing a Chapter 7, your unsecured debts will soon be discharged, and if you’re filing a Chapter 13, you’ll soon start your reduced payment plan. Your Attorney can help you throughout the process, so that you always know what to expect next.

Lessons Learned From Bankruptcy

Even if you know that bankruptcy is the right choice, it can be discouraging to think about the long-term consequences you’ll need to face after your case is resolved. Most people look back on their bankruptcy as something they never want to do again, but a situation they learned from. After dealing with your debt in this way, you’ll no doubt gain wisdom that will help you in the future or even help your loved ones avoid the struggles you’ve gone through.

Budgeting will be a part of your bankruptcy case and will become second nature after your debts are taken care of. A Bankruptcy Attorney can help as they discuss your case they can see how to best help your situation, you’ll leave with a comprehensive list of tasks and documents to complete. The next step before filing your case, you’ll need to take an online Credit Counseling Course. This class will not only help you decide if bankruptcy is the right choice for you, but a large focus of this class is also on budgeting. A second, post-filing class is also required, which will help you fine tune your budget further. When you first file bankruptcy, you won’t have access to credit for a while, which can be a challenge. That’s why it’s so important to focus on building up your savings account. This way, you’ll have some money set aside for emergencies, rather than inadvertently getting into debt again. If you end up in a situation where you owe on a medical bill, for example, work with the creditor to establish a payment plan, rather than relying on credit cards.

Being in debt can reduce your freedom to live the life you really want to. Instead of deciding where your money goes and how it’s spent, you’re tied to debt payments. Bankruptcy can put an end to this stress and give you a new start. The lessons of rebuilding your credit and living on a budget will benefit you for the rest of your life.

Improve Credit Score After Bankruptcy

Most people don’t pay much attention to their credit score, which is easy to do when you’ve always been able to pay your bills on time and haven’t acquired much debt. But even the most responsible consumers can be hit with unforeseen circumstances such as a job loss or medical bills. Credit cards may be able to float the expenses for a while, but eventually the debt can mount up to a point where payments are no longer manageable. Missed or late payments can lower your credit score, but you may avoid bankruptcy, hoping to stop any further damage. However, sometimes bankruptcy is the correct choice, and there are things you can do to rebuild your credit score after filing.

If you have a pattern of late payments, filing bankruptcy can discharge many of your unsecured debts and put an end to those late payments. A bankruptcy will lower your credit score, but after you file, you’ll be given a “Discharge of Debtor” document that shows your debt has been forgiven. At this point, negative credit events stop, and you can begin establishing a positive credit history. First, you’ll need to request credit reports from the three credit reporting agencies: Equifax, Experian, and Trans Union. Review all of the information listed on your report to ensure accuracy, particularly that any debts included in your bankruptcy show a zero balance. You can correct any errors by contacting the credit agency.

After ensuring you have a clean credit report, you can begin the work of adding positive elements. You will most likely receive credit card offers as soon as your case is resolved, but be sure you review the terms carefully before accepting. You may need to start with a secured credit card with high interest rates and steep fees. While this is not ideal, it’s a place to start, and you can avoid paying any interest by making only small purchases and paying them off completely, on time each month. You might even want to use the credit card for a small monthly bill and set up an automatic payment, essentially ignoring the fact that you have access to credit to avoid the temptation to overspend. As time goes by, you’ll receive better offers for new credit cards or may be able to renegotiate the terms of your current card. Soon, your credit score will improve and you’ll qualify for better and better options.

Financial Planning

The 5 reasons women need to plan differently are outlined below. They may not be applicable in every case, but women are more likely to experience these factors than men. With clarity, a well thought out and evolving financial plan, women can achieve financial confidence, independence and peace of mind.

  • Increased Longevity

Women are estimated to live 5 to 6 years longer than men. This increased longevity means that their retirement savings needs to last longer. During those extra years, they may incur even more expenses. Health concerns may surface or the need for skilled care may arise. All of this amounts to increased expenditures during your later years of life. Longevity that isn’t planned for can put a strain on retirement savings. Women should not plan on receiving or inheriting money from their spouse. With the declining availability of defined benefit pensions, people remaining unmarried or marriages ending in divorce, a monthly check from a spouse’s pension, may not be an option. Women need to plan for personal longevity because of this.

  • Break In Employment

It is not uncommon for a female to take a break from employment when children are being born and raised. Some women decide to quit their corporate gig and become a stay at home mom. Or they trade in their higher paying job for one that offers more flexibility and better hours. This puts them in a position where less personal income is coming in. This has a significant impact on their ability to save for retirement. Also, getting back into the labor market right where they left off can be difficult. After years away, technology, younger workers, more experienced workers, and industry changes can make this harder to do. Women taking a break in employment to raise a family may face these obstacles when trying to re-enter the workforce.

  • Life as a Woman Costs More

It doesn’t come as a surprise that females generally spend more in certain areas than men. The entire beauty and cosmetic industries are largely focused on women. Generally, women spend more on makeup, hair and skin care products. They generally spend more on clothing, shoes and accessories as well. The above expenses tend to occur on a much more frequent and recurring basis. Men don’t spend nearly as much on these. Additional financial planning and budgeting can help reign in any excessive spending in this category. In most cases, even tightening the belt on some of these items may not solve the problem. Life as a woman still costs more.

  • Women Are More Likely To Experience Independence

Whether it is due to outliving their spouse, being single, widowed or divorced, women are more likely to be the sole financial decision maker at some point in their life. This is another reason why it is important to have a financial plan that prepares for the future. In previous generations, women were accustomed to taking a back seat with finances. This is no longer the case. Today a proactive approach to future financial needs is always advisable.

  • Women May Earn Less Than Men

This is a long standing concern. Women statistically earn less than men. Women may take a break in employment which may hinder their salary growth, or they are less likely to ask for a raise which causes them to be treated differently compared to their male counterparts. This may have a significant effect on their future financial situation. The good news is that both men and women have the same opportunity to prepare for retirement. The sooner you are able to start investing and planning for your retirement, the better prepared you will be. The longer you allow your money to grow and compound, the more stable your financial future will be.

Islamic Finance

Society and its priorities change with the seconds of the change in time. Whereas morality and integrity were of utmost significance at a time in an obscure past, the priority of society, today, is amassing heaps of wealth. One may question, why not? If, having more zeros after a figure in your bank statement, surely, means having a greater influence and a vaster dominion over the world, then why are you playing the guilty conscience card on us? Well, but, I say, wasn’t it us, in the first place, to form a direct proportion between wealth and influence in the world? You, seriously, cannot tell me that this is how it has been since time immemorial! About time we embarked on some insightful journey, wouldn’t you say?

If money was really directly proportional to influence, then the exemplary case of the second caliph of Islam, Umar ibn al-Khattab r. a., for instance, would be a scientific anomaly! It was in 637 AD that after a prolonged siege of Jerusalem, the Muslims finally took the city. While Heraclius, the Byzantine Emperor, had fled, Sophronius, the Greek Orthodox patriarch, surrendered the city on the condition that no one was to be harmed. The terms were observed and the patriarch gave the key to the city to Umar ibn al-Khattab r.a. Umar r. a. entered Jerusalem, to sign the peace treaty, with humbleness, walking in by foot alongside his servant who was comfortably being conveyed by a camel. Umar r. a. and the servant had been travelling by foot and on the camel in turns (Muir: 135).

When Sophronius met the Ameer-ul-Mo’mineen, Umar r.a., one of the most influential men in the history of Islam and the rest of the world, he was dressed in his travel-stained battle tunic, while Sophronius was attired in sumptuous robes. Sophronius was very surprised to find the Commander of the Muslim world dressed in anything but royal clothes and even questioned Umar r.a. about the simplicity of his apparel, to which he replied that Allah SWT doesn’t “demand extravagance”. The Patriarch then explained that he did not wear all the regalia to adorn himself but to ‘check the confusion and anarchy in the world’ and he was “God’s office”. In other words, for the sake of appearances, he had to portray in his dressing that he was a representative of God. It is, indeed, the concept of appearances that has confused us as to what influence is in actuality. That confusion has, consequently, led to forgetting the reason behind the creation of lofty appearances earlier in time, even if it was a result of flawed thinking.

Habits That Can Drive You Into Poverty

1. PROCRASTINATION

The first habit is procrastination. It is said that procrastination is the thief of time. If you want to be successful, grab opportunities as soon as they come your way because you might never know when such opportunities will come your way again if you fail to do so. Also, endeavour to set realistic expectations. It is unrealistic to expect that success will come too easy and quick. Bear in mind that success takes time.

2. INDECISION

This is a state of being unable to make a choice between two or more opportunities. For example. One may be talented in sports and music but finds it difficult to choose which to pursue. Most times, people with this kind of dilemma may choose to pursue the two opportunities at the same time but end up being average persons. To be successful, you should choose to do one thing at a time for it is better to be a master of your game than a jack of all trades.

3. INABILITY TO ACQUIRE NEW IDEAS

Successful people make it a point of duty to always seek new ideas. They associate themselves with books rather than entertainment. They continuously seek self-development through the pages of books. If you make a visit to their houses, one thing you can be sure of finding is a study library. People who crave for entertainment at the expense of knowledge, are often times condemned to a life of poverty.

4. FAILURE TO LEAVE ONE’S COMFORT ZONE

A Comfort zone is a zone in which you do something that allows you to simply eke out a living. It is called a comfort zone because it is less demanding. Often times, you find people willing to stay in a poorly paying job for over thirty years and retire poor. This happens because of their unwillingness to leave their comfort zones. If you want to be successful, you must be willing to leave your comfort zone. This is not say you should resign your job but be willing to go into other engagements that will enable you build residual passive income.

5. WAITING FOR THE RIGHT TIME

To wait for the right time before engaging in an undertaking, is to wait endlessly because the right time may never come. Experience has shown that every successful person faced disadvantages. The right time never came in their case but they faced their challenges with dogged determination. Moreover, waiting to learn everything about, say, a business opportunity before engaging in it, is to plan to fail. Successful people rather learn on the job. They may, no doubt, fail. But they regard failure as an opportunity to learn better ways of doing business.

The Importance Of Financial Means

They say money can’t buy happiness. That is not entirely true. In today’s world in America and all around the globe, money is the predominate means to attain the necessities of life. Whether to buy food, pay for shelter, or just about everything associated with existing in today’s world all depends on the availability of having enough money to do so. In many instances the lack of financial means puts individuals in very stressful situations. We can conclude having the financial means could very well equate to a person being somewhat happy. This is because when one has financial support behind them the stress level should dissipate. Were not saying that this is true for all individuals but, having money puts a person in a capacity to be able to use that resource to reduce stress associated with not having enough money to pay for such essentials as housing, food, or medicine.

In our fast-paced world where the basic necessities of life are becoming more expensive than ever, one would think that all the technological and scientific marvels at our disposal would somehow reduce many of those costs. That is not the case today. In fact, in Flint Michigan for example, access to fresh, clean, safe potable water is actually money driven. But it is not only those in Flint, Michigan that are having water woes; all across the country water rates continue to spike. And, like everything else, it is the poor that continue to suffer just because they lack financial support.

It is a very sad commentary for our times when so much wealth is hoarded by so few. Much of the world’s anguish would be avoided if there was a lot more balance in societies everywhere. Someone once asked what money can’t buy. When we say it can’t buy happiness or health, think again. Just look at the mortality and obesity rates of the poor compared to those few at the top of the income ladder. Also, look at the emergency room where millions of people flock to just for minor health issues. They are there because they can’t afford health insurance. Money, or lack of, plays a vital role in every one of these issues.

Without access to living wages society especially in the United States today breeds a whole slew of problems. It was Dr. Martin Luther King that stated giving people the financial means like establishing a Universal Income for all would reduce poverty, reduce crime, and pretty much ease the burden of parenthood. In fact, the greatest economic boost for any society comes from that society being able to achieve the “Williams Theory of Economic Evolution.” That being having more people with enough disposable income to spend, pay down debt, and to save at least 10 percent of that income.

Reasons for Budgeting

Some other information may help us to see a history or a pattern of our expenses. This information may cause us to make an adjustment for the better or consider a more reasonable path. The working budget can open these doors to us. I heard a statement on TV one day that said information is power. So weekly, monthly and sometimes daily budgeting is a real benefit. If you are married, the excuse that my wife or husband manages the money can be a detrimental. The whole family unit will suffer behind that kind of thinking. Budgets are for everyone. As for as the mental awareness of the budgeting, it’s just that, being aware of how much money is coming into our households. There is perhaps no better way to do this than to write it down. Society, has just got away from the ideal of putting pen to paper, for some reason. There are definitely many benefits to physically writing something down. One area were I found this extremely help is in making a budget. There is something about the mental activity of doing basic math that exercises our minds. It draws in our focus on what we are doing.

This awareness ties into the many areas or categories for creating a budget. What happens with budgeting sometimes is that we are unaware of or miss some needed categories. Which can throw our budget off a little or a lot depending on how much was missed or left out. This is another reason for creating a solid, hands on budget. Your awareness of budgeting will only continue to increase if you continue to hammer at it and review it with frequent and regular intervals. Forethought, is perhaps one of the key reasons for having a budget. The dictionary defines, forethought as a thinking beforehand, foresight. So, when we really apply ourselves to making a real, practical budget. We will develop a mindset and occasionally might say to ourselves. Do I really need that right now? Or I can’t buy that right now because my son’s tuition payment is due next month. Or, you might say, I am moving next month to extent that TV service now would not make sense.
As stated earlier, just doing a practical working budget and maintaining it will cause one to develop a keen foresight to what is really needed and what is not.

Managing Money

Here are a few ideas we learned to help manage finances while transitioning in life that might minimize or eliminate some of those challenges:

1. Know The Numbers. First and foremost, look into all of your hard finances, including: calculating what you earn from all sources; knowing how much you spend and on what; researching what kind of debt, savings, and investments you have overall; determining your credit score; and examining the employer-provided benefits you might need to cover. After crunching the numbers, write the information down in one spot so you can refer to it at a moment’s notice.

2. Make Sacrifices. Even if you have substantial savings, find ways to cut back and reduce your cost of living. It is best to alter aspects of your lifestyle early, before a real need for money arises. You may actually find that you won’t want to go back to some of the excessive spending once you make more money.

3. Maintain an Investment Strategy. Create and maintain an investment strategy so you remain connected to wealth and abundance during your transition. Choose something meaningful to you, even if it is not a number one priority. If saving for your child’s college fund is the most important thing to save for, do that instead of adding to your retirement fund. Transitioning is already an insecure time; keep stability by saving for something that matters the most to you.

4. Find Long-Term Financing. If you need to borrow money for a business investment, try to find long term financing so that large amounts do not need to be repaid before the business is profitable. Bank loans or equity loans that can be repaid over several years will give you breathing room to build cash flow and spread the payments over time.

5. Keep Life Liquid. Create access to your money. This is not the time to tie up your funds in investments that are difficult or costly to access. Liquid money is most useful during transitions.

6. Set a Limit. Establish a threshold of cash reserves that you will not go below. That money is not available for anything- especially not for investing in the new business. It is only to be used if a true emergency arises.