by admin | Bankruptcy, Consumer Proposal, Credit Counseling, Credit Repair, Debt Management
Today, the average American has more than a single credit card. This coupled with the American lifestyle of “gotta have it now” has led to a lot of problems. Specifically speaking, it has led to a lot of debt. In fact, in many cases, the debt has gone out of the control and individuals have been forced to file for bankruptcy. Believe me, bankruptcy is something you’d want to avoid. After all, living at the mercy of others is never a good feeling.
Are you facing financial difficulty and pondering filing for bankruptcy? If yes then you’re not alone. Make it absolutely clear that your debt has got nothing to do with your personality or way of living. Even the very finest of people may go bankrupt at some point in their lives. Most people who suffer bankruptcy are regular, hard-working people who encounter some sort of blockade. A single blockade whether it was an accident, reduction in wages or the loss of job can send you in the wrong direction.
Come what may, you cannot prevent the aforementioned blockades. What you can do though is limit living on credit. Your debt will start to multiply as soon as you start using your credit cards to pay for what you can’t afford. Eventually, your debt will cause you to go bankrupt. The best thing you can do to prevent such a situation from occurring is avoiding the things that lead to bankruptcy in the first place. Following are 3 tips to avoid bankruptcy that credit counselors recommend.
Develop a budget
This is a no brainer. If you don’t have a budget, there is a 90% chance that you’ll go bankrupt. Basically, you need to list down all your monthly expenses and allocate resources/money to them based on their importance. Limit the money you spend on unimportant things such as home décor, branded clothing, designer shoes, and so on. This will help you to better manage your debt and avoid bankruptcy.
Pay off your debt over time
If your debt hasn’t yet gone out of control, sit down and determine how much you owe. In such a situation, it is more than possible for you to pay off your debt on your own if you re-adjust your budget and use a debt management plan. Also, taking to a credit counselor would be a good thing to do in this situation.
Take help from credit counselors
As mentioned above, credit counselors can help you to better manage your debt. Additionally, they can advise you how to avoid bankruptcy. Knowledgeable people, credit counselors have a sound financial background and can tell you anything and everything you’d need to know about avoiding bankruptcy.
Bankruptcy is not a good situation to be in. Luckily, you can avoid bankruptcy by using the tips mentioned above.
by admin | Consumer Proposal, Credit Counseling, Credit Repair, Debt Management
There are multiple ways for you to reduce your debt and improve your credit rating including consolidation loans and consumer proposals. If you have more debt than you can handle then opting for a consumer proposal is a good choice. What is a consumer proposal and how can it help you to clear your debt? Let’s find out.
If you’re at a point where your debt continues to rise and making ends meets is as good as impossible then you have every right to be worried about your future. However, contrary to what you may think, paying off your debt is not impossible. It’s just that you haven’t found the right solution yet. So what’s the right solution for paying off your debt? If you guessed consumer proposal then full marks to you.
A consumer proposal is your best bet if you want to clear your debts without going bankrupt. Part of the Bankruptcy and Insolvency Act, a consumer proposal allows you to negotiate with creditors for debt reduction. Moreover, it allows you to spread the debt payment over several years. The debt payment you make each month will be based on your personal situation and your budget. Using consumer proposal, you can reduce your debts by up to 70%. However, it’s important to remember that only a licensed credit counselor or Insolvency Trustee can administer and file consumer proposals. After you sign up for consumer proposal, you’ll be required to make monthly payments to the trustee and not your creditors. This means that the creditors can no longer call you for collection after you sign up for consumer proposal. Following are some of the advantages of consumer proposal:
- You will be free of debts once your consumer proposal is completed
- Your debt interests will cease to exist
- You’ll have to make only one payment for your debts each month
- Your belongings will be safe
- Your creditors won’t be able to call you for collection or harass you
- You won’t have to worry about interruption of gas, telephone, or electricity services
- You can pay off your debt in secrecy
As seen above, there are many advantages of signing up for consumer proposal. However, it’s important that you respect your commitments and make timely payments after signing up for the aforementioned dent payment solution. Also, you will be deemed eligible for consumer proposal only after the following things happen:
- Initial meeting with the advisor
- Filing of the proposal
- Presentation of the proposal by the trustee to the creditors
- Response of creditors
- Acceptance of proposal
- Consultation sessions
- Official discharge
Generally, the consumer proposal is for a period of 5 years or 60 months. Consumer proposal is a great way to clear your debts. This is the reason credit counselors highly recommend it. To find out more about consumer proposals, get in touch with a credit counselors today.
by admin | Bankruptcy, Consumer Proposal, Credit Counseling, Credit Repair, Debt Management
A loan is a good way to meet your immediate financial needs. However, it can be a hassle if you have a bad credit. For people with good credit, there is regular financing while people with bad credit can finance their needs through a loan for bad credit. Whether you get your loan through regular financing or obtain it through a loan for poor credit, at the end of the day you have enough funds to meet your needs. Nonetheless, avoiding bad credit works to your advantage. Understanding what bad credit means is the first step to avoid it.
Understanding bad credit
What is bad credit? Generally, bad credit refers to a poor credit rating. There are many reasons for a poor credit rating including not enough credit history years, identity theft, and a history of late payments to lenders. The interest you’ll be paying for your loan is determined by your credit rating. Generally, a higher interest rate is what a poor credit rating leads to. However, that isn’t always the case: reasonable interest loan for bad credit is also available.
What does reasonable interest loan for bad credit mean? Reasonable interest loan for bad credit refers to financing in which a person with a poor credit rating or bad credit doesn’t necessarily need to accept a higher interest rate to obtain the loan. There are only a few lenders that allow people with bad credit to obtain a loan at a low interest rate. Although there are some lenders that offer reasonable interest loans to people with bad credit, credit counselors recommend repairing your credit.
Credit repair is the way to go
Improving credit score is the primary reason credit counselors recommend repairing credit. Whether you do it yourself or get help from a credit repair service, credit repair is the perfect way to improve your credit and gain financial prosperity. Now, while credit repair is a good way to improve your credit score and increase your chances of getting loans with lower interest rates, there are times when improving your credit score is simply not possible. For example, it’s extremely difficult for a person with poor credit who is short on finances and has ends to meet to repair/ improve his or her credit. Fortunately, as previously mentioned, there are some lenders that offer loans with lower interest rates to people with poor credit.
Obtaining a loan with bad credit
As part of the decision making process, lenders perform a credit check on potential borrowers. The decision of the lenders may be affected if you have poor credit rating. Fortunately, a poor credit rating doesn’t make you ineligible for a loan instead to decide whether to approve your loan application or not, lenders consider other factors such as trust and honesty.
If you have bad credit, you will be on the path to repairing your credit history when you’re approved for a loan and start paying it back. Though, you may need to pay a higher interest rate to secure a loan so think carefully before choose a loan or lender. If you want have bad credit and want to secure a loan with reasonable interest then get in touch with a credit counselor to find out how you can do that.
by admin | Consumer Proposal, Credit Counseling, Credit Repair, Debt Management
Graduation is an exciting time. You’re out of school, independent and have your first real job. However, it is your first paycheck that brings about the real excitement. Unfortunately, for most people, this excitement is short lived. As soon as they get their paycheck, most people start shopping for their apartment or dining out each day. In a few weeks, all the money evaporates into thin air and they’re left stranded until the next payday.
Most, if not all of us, are guilty of spending inappropriately. We hurt our finances by overspending on shopping, eating out, and other unimportant expenses. Also, most of us seldom try to look around for cheaper deals as we consider it a ‘waste of time’. Knowing how to balance your desires with the list of financial responsibilities and obligations is crucial. This is a fundamental money management practice that each one of us has to learn and remember. No matter how hard you try, completely avoiding money mistakes is simply not possible. However, by learning the basics of money management and avoiding the common spending mistakes, you’ll be able to save some money and better your finances. Following are some common spending mistakes that credit counselors want you to avoid.
Spending every penny
The key to financial success is simply saving money. For this reason, you must avoid spending every penny that you earn each month. Generally, the lack of motivation or having nothing to save for is the reason some people don’t save. If you’re one of them then you must use your dreams to motivate yourself for saving. If buying a home or owning a Maserati is your dream then you must motivate yourself to save enough money to fulfill your dream in 3, 5 or 10 years time.
Contrary to what you may think, there are several opportunities for you to cut back on expenses. For example, instead of spending money on lunch at work, you can make a sandwich at home to save money. To cut monthly expenses, you need to find out how much you earn and how much you spend each month. A saving strategy that works for most people is the 50/15/5 rule. This means that you 50% of your income on expenses should be reserved for expenses, 15% to go to retirement savings and 5% should be your short-term savings. You can spend the remaining 30% as you deem fit.
Excessive use of the credit card
Remember: if you cannot pay for something with cash then you probably can’t afford it. It’s a proven fact that people who pay with credit spend more than those who use cash to make purchases. Use your debit card if carrying cash is a problem for you. If you don’t have a debit card, use only one credit card and keep track of your purchases with it. Don’t fall for the discounts on credit card purchase. Even if you pay less for the an item with the credit card, the interest on your monthly credit card bill eat up most if not all of what you saved.
The aforementioned spending mistakes are just two of the countless spending mistakes that most of us make. To find out about the other spending mistakes, get in touch with a credit counselor.
by admin | Consumer Proposal, Credit Counseling, Credit Repair, Debt Management
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.
by admin | Consumer Proposal, Credit Counseling, Credit Repair, Debt Management
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.
