What Should be the Next Steps After You Go Bankrupt?

What Should be the Next Steps After You Go Bankrupt?

Getting up after you have fallen is relatively easy than getting back up after you have gone bankrupt. It is the accumulation of all your bad credit habits and mismanagement over the time that has finally come alive to eat you up – and it did. The only way out is to file for bankruptcy, which is not an easy way out. However, it is not a difficult situation to stay at, only if you understand the process and have enough patience to let it all pass. It may seem overwhelming and daunting to re-establish your credit profile all over again, to attain a good credit rating and to regain your lost confidence.

If you know how to see the wisdom behind all the happenings, you would see bankruptcy as a fresh start, a second chance to avoid repeating the same mistakes and to prove yourself in front of the credit world. Your second chance can be very rewarding if you plan and strategist what your next step would be. You do not want to go wrong now. Which is why there are 3 steps that you need to take after filing bankruptcy.

     Stop letting your mistakes haunt you

This is the first and the most important step before you go any further. You cannot allow your mistakes, even blunders, to keep haunting you and mocking you back. It will only eat away your confidence and you will feel stuck in the place you have landed. It clouds the way ahead and does not let you see the opportunities that you seize. The right attitude here will as your armor. You need it.

     A lifestyle change

The next step is obvious; you cannot keep living the way you did before. Your lifestyle must change to accommodate your current financial situation, a situation that will take time to get better. Cut down your unnecessary expenses. Identify your necessities and essential expenditures. Cut down on luxuries to save money in order to pay off your debts. If you have filed for chapter 13 bankruptcy, you will have to do this at all costs. The authorities will ask you to reorganize your expenses, and until you have paid all of your debt off, it will stay this way. If you have filed for chapter 7, then you will be asked to use your money carefully, No credit will be given to you at any circumstance until your case has been discharged.

     Reestablish your credit rating

Once your case has been discharged, the next step is to build your credit profile. It is a misconception that you cannot get any credit, once you have gotten the word “bankrupt” on your credit report. What you need to do to improve your credit report. For this, start paying all your bills on time. If you have a house, then do not miss out on any of the mortgage payments.

After that, get a secured credit card. It is not as same as the regular credit cards, but it is the stepping-stone you need to cross. It allows you to deposit a certain amount and that amount becomes your limit. They will see how you are repaying your loans, and according to that, will up your limit whenever they feel you are finally learning from your mistakes.

What is credit counseling and how it can benefit you

What is credit counseling and how it can benefit you

Counselors act as mentors, guides, advisers, and teachers. Similarly, credit counselors can give you valuable advice and teach you the ways to manage/ lower your debt and improve your financial health. Credit counselors can help you to improve your financial situation even if your debt has reached the tipping point. For many people, financing an automobile or securing a home loan is extremely difficult. Know why? If you answered a poor credit rating then you’re a zillion percent right.

In order to determine whether we’re capable of making timely payments, creditors look at our credit history. A good credit history open many doors for you while bad credit closes most, if not all, of them. Generally, future credit offers depend on how a person uses his or her first credit card. If you make timely payments, your credit rating will improve and you’ll become an attractive borrower.

Generally, people with good credit rating pay lower interest rates than those with average or bad credit. In fact, in some cases, people with good credit may qualify for loans with low interest rates. Moreover, they don’t have to pay annual credit card fees. In short, over the long run, people with good credit can save thousands of dollars. On the other hand, people with bad credit will experience higher interest rates and get fewer future credit offers. The good thing is that people with bad credit can improve their credit situation by taking help from a credit counselor. Who are credit counselors and what do they do? Let’s take a look.

If you’re sinking in a sea of debt then a skilled credit counselor is person you need to approach. Through counseling and education, a credit counselor will help you to get rid of the piles of debt you’ve collected over the years.              To help solve your financial problems, a skilled credit counselor will do the following things:

  • Advise you about money and debt management
  • Assist you in the development of a budget
  • Provide relevant educational material

There are many reasons to take help from a credit counselor including:

  • Reducing the debt amount
  • Lowering credit card debt interest rates
  • Consolidating loans into one monthly payment
  • Eliminating late fees and additional charges

Taking help from a credit counselor is a sensible thing to do if you want to maintain a good credit score, reduce interest fees, get new credit or simply manage your finances better. Some of the services provided by credit counselors include:

  • General budgeting
  • Debt free planning
  • Bankruptcy counseling
  • Student loan counseling

 

Credit counseling is for you if you want to repair your credit rating, pay off your debt, or simply learn how to manage your finances better. Credit counseling can benefit you regardless of your age or income level so get in touch with a credit counselor right away to lower your debt and improve your financial situation.

The common mortgage mistakes people make and how to avoid them in GTA

The common mortgage mistakes people make and how to avoid them in GTA

One of the biggest financial decisions you’ll ever make is buying a home. To many Americans, buying a home is a scary prospect. This is largely due to the complexities involved in the mortgage process. Basically, there are two ways for you to buy a home in America: Obtain home financing through a mortgage or purchase the home with cash. As there is no interest or debt involved in the latter, most people prefer to go that way but if you’re short on cash, the only way to buy your dream house is through a mortgage.

In simple terms, a mortgage is a loan to buy a home. Also known as a mortgage loan, a mortgage is the only way people without sufficient funds can buy a home. The mortgage process involves approval from lender based on your credit rating, income and a few other factors. If you to make your mortgage process smooth and avoid future stress, keep a few basic mortgage rules in mind. Basically, you need to avoid the common mortgage mistakes people make. What are the common mortgage mistakes people make and how to avoid them? Let’s take a look.

1.     Not determining your fixed costs

Discern your fixed costs prior to obtaining a mortgage loan: this is the first mortgage rule to follow. Be honest in the assortment of your household expenses: count your car payments and your daily Starbucks coffee as a fixed cost if you’re going to be miserable without them.

2.     Not getting your paperwork in order

This may surprise you but many people visit loan-officers for pre-approval without the required paperwork. This is a mortgage mistake that you must avoid. Getting the required paperwork in order is the second and probably the most important mortgage rule to follow. When looking to secure a mortgage, the very least you’ll need is your bank statement and your last W2. Additionally, if you’re getting a refinancing loan, you’ll need to add your homeowner’s insurance declarations and mortgage statement to the aforementioned paperwork. Also, you’ll need to provide proof of identity.

3.     Not staying within your limits

No offence but you need to stay within your limits when getting a mortgage. Basically, this means that you need to get a mortgage you can afford. The rule of the thumb is that your monthly cost of mortgage should not be more than 30% of your gross monthly income. Also, you’re total monthly debt including the mortgage, credit card debt, student loan, and car payments should not consume more than forty percent of gross monthly income. Speak to a credit counselor to find out how you can secure a mortgage while staying within your limits.

4.     Picking the wrong interest rate

A mortgage mistake that costs people in the long-term is picking the wrong interest rate. When looking to secure a mortgage, you can either choose a fixed interest rate which is a bit high but remains stable over the term of the mortgage or a variable interest rate which is lower than the fixed interest rate but fluctuates based on the state of the market. Talk to a credit counselor to make sure you pick an interest rate that is right for you.

5.     Not thinking about your mortgage payments

When getting a mortgage, most people do not think about the payments they’ll have to make for it. This is a mortgage mistake that you must avoid. Once you’re approved for the loan and buy the home, you’ll need to start making mortgage payments. The mortgage payments include the principle amount and the interest. Create an amortization table to work out exactly how much you’ll be paying over the course of the mortgage loan once you know your interest rate and the mortgage tenure. This will help you to find out whether you can afford the mortgage in the long term.

 

To make your mortgage process smooth and avoid future stress, avoid the aforementioned common mortgage mistakes. If you have any further queries related to mortgage financing, you can get in touch with a credit counselor to know everything you want.