How To Declare Bankruptcy

Bankruptcy is the legal status of an individual or an entity, in which they are not able to pay the debts that they owe to creditors. Although bankruptcy is declared by court orders, it is an individual who initiates the process. In the United States, bankruptcy cases are handled by the federal courts. Such cases are guided by the rules under the U.S. Bankruptcy Code. So, how do you declare bankruptcy?

Declare bankruptcy

Declare bankruptcy

As an individual, you qualify to declare bankruptcy under Chapter 7. However, so as to qualify for bankruptcy under Chapter 7, your income should be below a given level.

So as to pay off your creditors, your property may be liquidated. If you had borrowed secured loans, the options you will have are to pay the creditor an amount which is equal to the current value of the property, allowing the property which you used to secure the loan to be repossessed or to have the secured debt eliminated.

Steps for Filing Bankruptcy            

  • Find out if you qualify

This is the first step that you need to take if you wish to file for bankruptcy. You should qualify for bankruptcy under the conditions stated by law. As earlier stated, your income should be below a given level. Thus, if you still have some income left after paying off your monthly expenses, you will then have to file for bankruptcy under Chapter 13.

  • Fill the bankruptcy forms

Fill the bankruptcy forms

Fill the bankruptcy forms

The bankruptcy forms are downloadable from the U.S Court’s websites. They are a large number of forms, where you are required to fill in your incomes and expenses, properties and debts in full detail. Do note that if you fail to list a debt, it will not be discharged after being declared bankrupt. This means it will continue after bankruptcy.

It is recommended that you fill the forms with the assistance of an attorney. However, should you may decide to fill the bankruptcy forms without the help of an attorney (pro se), the non-attorney prepares may assist you with the paperwork.

  • Receiving a bankruptcy trustee

After filing for bankruptcy, a trustee will work on behalf of you towards your creditors. This trustee is assigned to you by the courts. The trustee determines the property that you get to keep as well as ensuring the verification of the information that you filled out in the bankruptcy forms.

The trustee is also tasked with liquidating the non-exempt property. However, this is under the guidance of the rules which dictate which property is exempted from liquidation. These rules vary from State to State and thus it will greatly depend on the State you are in.

  • Credit counseling and debtor education

As an individual filing for bankruptcy, you are expected to receive credit counseling as well as debtor education. Before filing for bankruptcy, you are to get credit counseling, whereas after you are declared bankrupt, you should receive debtor education.

Before the debts are discharged, you are expected to present the Certificates of Completion to prove that you have undergone credit counseling and debtor education. However, ensure that you undergo these with agencies approved by the Department of Justice.

  • Attend the 341 meeting                                                                            

This is an official meeting that is held with the creditors at your trustee’s offices. Its name refers to section 341 of the Bankruptcy Code. You are expected to state why you are filing for bankruptcy and answer questions related to your debts.

In this meeting, arrangements related to the property that was secured as collateral as well as selling off your non-exempt property are made.

  • A permanent orderBankruptcy discharge

After this, you may be awarded a bankruptcy discharge. This is a permanent order that legally makes you to no longer be liable to creditors. Thus, they should not take any legal action against you or communicate to you with regards to the debt.

The bankruptcy discharge may be expected to take effect 60 days after you, your trustees and creditors hold the first 341 meeting.

Good Vs Bad Debt

Financial knowledge awareness, knowledge and management is essential so as to ensure that you take actions that may build your wealth. However, at times we may need some extra funding in the form of loans. Is there good debt or bad debt? So as to understand these concepts, do read on.

Which debt is good?

Which debt is good?

  • Good debt

This is a debt which is considered positive, as it is expected to give you returns or earn you an income. An example of this is mortgage loans. Such debts can also be tax deductible, as is the case when the amount of the loan repayments is higher than the income from rental payments. This makes the borrower entitled to negative gearing.

  • Bad debt

Bad debt is that which is spent on the purchase of items that do not appreciate in value over time. In addition to this, it does not earn you any income nor is it tax deductible. Examples of such debts are using loans or credit cards on entertainment, luxury items or to take a holiday. Bad debt is also one which is taken so as to cater for

  • Which debt is good?

The argument posed has always been that good debt is good, whereas bad debt is bad and that it worsens an individual’s financial standing.

Good debt offers individuals good financial prospects in the long-term. This is the case when one invests in their business, borrows a loan for a car that they can afford, takes up a student loan or takes a mortgage. Good debt should not be used to pay off another debt as it leads to more costs in terms of interest, instead, you should go for consolidation loans.

Good debt offers good financial prospects

Good debt offers good financial prospects

Bad debt can be used wisely when the credit card debt is paid by the end of the month to avoid being charged higher interest fees. Generally speaking, bad debt is good only when you can pay it off in the short term.

However, purchase of luxury items would be considered as excessive spending. It is not a good financial decision and neither is it an investment. The use of bad debt requires discipline as one should not exceed their credit limit.

The access to a pool of funds tempts individuals to spend more than they should, leading them to further indebtedness. Credit cards also have a high-interest rate, which takes a hit on one’s financial position.

Good financial decisions involve the purchase of items that appreciate in value. It is clear that it is only good debts that offer you with such assets and returns. A sound investment is only possible with good debts. Good debts are also payable over a longer period of time, whereas bad debts have a higher interest rate and need to be paid using one’s next expected salary, as is the case with online payday loans or credit cards.

They often lead to a vicious cycle of indebtedness as one may need to borrow more money so as to meet their needs or to pay off the loan. Bad debts are enticing as they offer quick and easy access to funds but they have detrimental effects in the long run. Make wise financial decisions and keep away from debt. If you really need to borrow money, make a good decision and let it be good debt.

10 Things you need to know about installment loans

When facing financial constraints, most people may be forced to approach lending companies. They may not have carefully thought about whether they may end up losing more or sinking further into debt and even hurt their credit score. With the current economic situation, there are various forms of lending which are out there to make a profit.

Borrowers should be careful not to borrow from such companies to avoid regretting the poor choice they made. Borrowers need to have better understanding and knowledge of the type of loans they want to take out. There are certain things you need to know about online loans for bad credit before deciding whether they are suitable for your financial needs.

  • What is an installment loan?

Installment loans are repaid in scheduled payments

Installment loans are repaid in scheduled payments

An installment loan generally refers to any type of loan that is supposed to be repaid in scheduled payments known as installments. Installment loans relieve the borrower of the burden of having to repay a whole lump sum at one go like other types of loans such as payday loans.

  • Installment loans can be secured or unsecured

There are various forms of installment loans such as auto loans, mortgages and personal loans. These loans are both of a secured and unsecured nature. Mortgages and auto loans are typically secured loans. In both cases, you put up your house or car as collateral in return for a loan. In the event that you default in payment, the lender has the legal right to sell your house or car to recover the outstanding amount.

Personal loans, on the other hand, are unsecured. This means to apply for a personal loan, the creditor does not require you to put up any property as collateral. Instead, the creditor checks your creditworthiness which is determined by your credit score and proof of income which guarantees that you are in a position to make repayments in the future. Installment loans are more flexible as they allow borrowers to distribute payments throughout the loan term.

  • Requirements for application

Requirements for application

Requirements for application

Before requesting an installment loan, you need to meet a few set requirements to secure this loan. These requirements include minimum age legal age of at least 18 years. Secondly, you must reside in the state you choose for your loan option so you cannot approach a lender in Ohio when you reside in Colorado. If you are requesting online installment loans, you must provide your social security number and a saving or checking account. That is because, upon loan approval, your funds will be transferred directly into your savings account. Upon meeting these requirements, then you are eligible for an installment loan.

  • You do not have to be employed to get an installment loan

Most people shy away from loans as some of them require you to provide a letter from the employer as proof of employment. Installment loans relieve you of such pressure. With an installment loan, you do not need to be employed as long as you have a steady source of recurring income. This guarantees the lender that you are in a position to make scheduled repayments (installments) throughout the loan tenure.

  • Additional fees  

It is always important to consider the cost that you are likely to incur while requesting a particular loan before you even start the application process. When requesting installment loans, make sure you’ve checked the interest rates and other fees such as application fees and processing fees.

  • Installment loans have fixed interest rates

Installment loans have fixed interest rates

Installment loans have fixed interest rates

Very often, borrowers suffer from rising interest rates. Some traditional forms of borrowing have varying interest rates such that they end up paying more in the long run. This makes it even expensive for the borrower such that he/she may delay in making payments which could adversely have a negative effect on the credit score. By providing fixed rates, installment loans give borrowers a golden chance to budget their finances over the repayment period, hence keeping them more at ease. This is one of the differences with payday loans.

  • Installment loans improve your credit score

Borrowers strive to maintain a clean credit score for future borrowing. A good credit score opens up avenues for borrowing and somehow acts as a guarantee that the borrower cannot default in making repayment. There are forms of traditional borrowing which could hurt your credit score if you are late in making payments or if you default altogether. Installment loans improve your credit score with time. With every payment or installment made, your credit score improves. Borrowers with bad credit, therefore, can redeem their creditworthiness. Installment loans have no credit check.

  • Installment loans do not have credit checks

do not have credit checks

do not have credit checks

For those who are haunted by a low credit score, installment loans offer a ray of hope to them. Borrowers on this bumpy road of bad credit installment loans can apply for bad credit installment loans from installment loan direct lenders who do not check your credit score but transfer your funds directly to your bank account.

  • They are fast

Installment loans with bad credit are tailored for emergency situations such as unexpected medical bills, funeral expenses or car repairs. Installment loans transfer funds to the borrower’s account on the same day or on the next business day. Application of an installment loan also does not require a lot of documentation, making the loan processing much faster.

  • Installment loan companies

This is a very important aspect to consider before requesting an installment loan. Borrowers should carry out research to ensure that they are dealing with a licensed company. Rogue lenders are on the rise nowadays and borrowers need to be more vigilant. The borrower should ensure that the lending company is licensed by the state before borrowing from them. Direct lender installment loans are the most preferred option.

Card Debt Trends

Credit cards give the borrower access to a pool of money. They get to borrow money which does not exceed their credit limit. The cost of living is on the rise and so is the cost of debts as well as the update of loans by most individuals. As an individual’s cost of living becomes higher than their flow of income, they will seek out sources of funding so as to get by. There are various options available ranging from payday loans, peer to peer loans and debt consolidation to credit cards.

credit card debts

credit card debts

The use of credit cards is common among many individuals across the world. This also applies to most citizens in the USA. The numbers seem to be on an upward trend with each passing year.

As per the data recorded in the third quarter of the year 2015, US consumers owed credit card debts that amounted to $712 million. The average amount of credit card debt owed by each US household was $15355.

Data related to the nominal income and the cost of living was recorded over a period of 12 years (2003-2015). Between 2003 and 2008, the median household income had a steady percentage increase which was higher than that of the overall cost of goods. At some point in the year 2008, the increase in the percentage of both the nominal income and the cost of living were at par.

Thereafter, the percentage change in the cost of goods has been on a gradual increase over the years. On the other hand, the percentage change of the nominal income has been fluctuating, having a downward trend between 2008 and 2010. From the years 2010 to 2015, the percentage change of the median household income has been steadily increasing, but at a rate lower than that of the overall cost of goods.

In as much as the number of credit card users and the amount of debts owed seem high, there is a possibility that the figures may be higher. This is because most individuals are usually shy to state the amounts of debt that they have. It is likely that most borrowers state half the amount that they owe while others may not know the total amount of their debt.

The following reasons indicate why the cost of debt loans is increasing:

  • The credit card interest amounts to $2500 or higher

Consumers incur an average cost of $2,630 annually on interest charged on their credit cards. This is calculated with the assumption that the Annual Percentage Rate is 18%.

  • The cost of debt increases as one’s income increases

credit limits

credit limits

High income households have the advantage of getting higher credit limits. However, this is not the case of low-income households. Therefore, the higher the amount of the credit card debt that a low-household income incurs, the higher the percentage of the amount owned up by the debt on their annual income.

The spending of higher income households will not affect their finances as much as it does to lower income households.

These card debt trends prove that in as much as the credit card is a popular means of getting funds, the impacts are negative and lead to further indebtedness. The interest rates are higher than any other type of loan and the rates seem to be on a constant upward trend. Take charge of your finances and do not be part of the borrowers counted as statistics in credit card debt.

Personal Loans for Bad Credit

Life is unpredictable. Many people are faced with financial challenges and they are looking for personal online loans for bad credit. Financial emergencies occur when you do not have enough cash for your urgent financial obligation and this can be challenging. Many lenders online promise you quick cash, but is it important that you do thorough research and know what they offer before falling for them.

Because of the existing bad credit history, conventional lending institutions such as banks and other microfinance institutions cannot lend to people with bad credit scores. However, you cannot improve your credit score within a day and you should look for a quick loan to deal with your emergencies.

Benefits of Personal Loans for Bad Credit

  • Quick Processing

Simple Application Process

Simple Application Process

In essence, personal loans with bad credit are offered to people in need and the application process has been streamlined to reduce bureaucracy that will lengthen the approval process. Once you have submitted your documents, all you have to do is wait for an approval which is usually given on the same day of application.

The loan companies will process your information and based on your current income, repayment history and expenses, they will be able to calculate the amount of loan that can be given to you.

  • Simple Application Process

The application process for personal loans for bad credit is easy. Once the lender has your employment history, name and address, contact number and a working checking account, he will process the loan. Lenders check a recurrent employee history to ascertain the creditworthiness of the borrower.

The checking account that you will give the lender will be used during the withdrawal and payment process. Therefore, it is crucial to understand that lenders require a verifiable bank account.

Lenders give borrowers $100-$1000 depending on their repayment of previous loans. They will give you a loan that you can manage easily. Personal loans for bad credit do not require much paperwork.

How Personal Loans for Bad Credit Can Help You

Consider Interest rate when looking for bad credit loans

Consider Interest rate when looking for bad credit loans

The interest rate is something that you should consider when looking for bad credit loans. Moneylenders have different interest rates and you should go to a direct lender because brokers include charges for connecting your profile to the potential lender.

Direct money lenders will offer a competitive price and you can get a loan affordably within a short period of time. A major benefit of finding a reliable direct lender is that you can get quick cash to deal with your emergency.

During financial emergencies, many people panic and end up choosing the wrong payday lender. You should take your time to find the best lender. Make a list before you narrow down to one based on the services offered.

Bad credit loans guaranteed is a feature that borrowers look for when they have a poor credit score. In case you fail to repay your loan on time, you may incur further charges because of loan roll over. Loan roll over loan accrues a higher interest than the original loan as the principal loan and interest is used as capital to calculate the new loan.

Moreover, when choosing a lender, it is imperative to understand all the terms and conditions. Many people rush through the papers and sign without reading or understanding the terms and conditions offered by the lender. There is a late penalty and extra charges that could be added to your loan if you do not pay on time.

Financial experts recommend that you ask all the questions you want to know about the loans before you decide to take up any. The interest on the loan should not change as time goes by. Extra fees are a common tactic that unscrupulous lenders extort money from unsuspecting borrowers.

How to Find the Best Personal Loans for Bad Credit Lender

How to Find the Best Personal Loans for Bad Credit Lender

How to Find the Best Personal Loans for Bad Credit Lender

The best bad credit lending company will brief you on all the terms up front. As a borrower, you can assess your situation before you decide to commit to them. When you spend a little time in looking for a good lender, otherwise you will end up paying extra for the loan.

It is essential that you take your time to look at the lender’s customer support, privacy policy, and interest charges. You need to find a lender who understands what you are going and you would like to get an affordable loan.

Common bad credit loans last for two weeks because they are meant to tide you over till your next paycheck, this is sometimes called a payday advance. Before you know it, it’s time to repay the loan and it will begin to accumulate extra charges if you do not repay it on time. Lenders usually charge a fee for the loan processing. If you use a third party loan processor or brokers, then the fee will increase exponentially.

A good lender will not charge extra fees without consulting the customer. Some lending companies will try to hide processing fees and they may end up charging up to $30 on your account without your approval. When you send a loan application, it should be free. The response should be given within a time limit and during the process, if the provider fails to make all relevant information available to you, it’s best that you choose another lender.

Credit Checking

Credit Checking

Credit Checking

The common question loan applicants have on their minds is whether the lender will check their credit history. We all know that a credit score is a number or a coefficient that shows your financial credibility and trust in loan repayment. Any lender will want to assess your ability to repay the loan and they will check all your documentation including credit score. However, this varies from one lender to another.

  • Almost no credit check

In this case, the lender will make a tiny identity check just to make sure that the borrower is not bankrupt. However, they will focus more on the main requirements such as active checking account, proof of income and age or identity. The loan applied in this category is between $100 and $1000.

  • Non-traditional credit check

This parameter is performed by several lenders when the borrower applies for larger loans. The lender will look at the average income, payment history and all relevant account information of the borrower. However, this is a soft credit check and it visible to the borrower and will not affect the credit score.

  • Traditional credit check

This is the traditional type of credit check and they do not stop at basic information. Here, the lender will check all your credit information and they will inquire your credit history from credit bureaus. It is vital to note that such inquiries will affect your final credit score and you should understand the type of credit check that the lender will use before you choose a loan.

Can I get unsecured personal loans for bad credit with a poor credit score?

Can I get personal loans for bad credit

Can I get personal loans for bad credit

Many online payday lenders will analyze your financial situation by going through your documentation and score. Although the importance of credit score varies from one lender to another, you should look for a lender who does not consider your score but checks for your willingness to repay the loan.

It is imperative to understand that even with a poor credit score, you can still access affordable loans. The best way to begin your financial rebuilding process is by repaying the payday or bad credit loan and building trust with the lenders. The loans themselves are unsecured loans.

Financial instability can cause stress to any individual and it is better if you can find the right loan lender who will walk you through the entire process. A major benefit of bad credit loan is that you can make an online application and have the loan processed within a short period. Once you have found the right lender, ask all relevant questions before signing the loan documents.

When to declare bankruptcy

Being declared bankrupt may be the last thing that you would want. However, it may be better to be in this situation so as to salvage your financial condition. When you find yourself unable to pay off your creditors and when you are barely making enough money to cover monthly expenses, declaring bankruptcy may be the best option. So, when would it be best to throw in the towel?

Indicators that your financial position is at risk

  • You are not really sure of the amount of money that you owe. It is an estimated amount, but not an exact figure.
  • Bill collectors are calling you
  • You rely on the use of credit cards to settle payments for basic necessities
  • The payments that you make on your credit cards are quite minimal
  • You are considering debt consolidation so as to get out of debt
  • You feel anxious and not in control whenever you think about sorting your finances
Filing for bankruptcy

Filing for bankruptcy

The above indicators paint a very tough financial situation. In such cases, all that may be occupying your mind is the huge amounts of debts that you owe and the reality that you may possibly not pay them off anytime soon. When you discover that you owe more than you earn and may afford to pay off the debts, it is an indicator that you should probably file for bankruptcy. Note you should earn an income which is below the level stated by the law so as to qualify for bankruptcy.

However, if you are to consider filing for bankruptcy, do note that not all debts may be discharged. The following debts should be paid even if an individual has been declared bankrupt:

  • Student loans
  • Taxes
  • Criminal restitution and court fines
  • Personal injury caused by driving under the influence of alcohol or drugs
  • Alimony
  • Child support

When you are ready to be declared bankrupt, you should ensure that you will disclose all your assets and liabilities. Failure to do so may mean that some of your debts will still need to be paid off even after being declared bankrupt.

You may declare bankruptcy after ensuring the following areas may not be adversely affected:

Pension plans and insurance policies

Find out if your policies will not be affected by bankruptcy. Some insurance policies and pension plans are protected by state laws and are not affected by bankruptcy proceedings.

Mortgage

You should ensure that you will not risk losing your home. The challenge of paying your mortgage may be made easier if your other debts will be discharged. Filing for Chapter 7 bankruptcy may lead to the loss of your home if a lot of equity is invested in it. It is advisable to file for bankruptcy under Chapter 13 if you have a higher income.

Credit card debts

Credit card debts

Credit card debts

These may not be discharged if you spent beyond your means or if you were not honest in your card application. Although bankruptcy is effective in wiping out such debts, if the mentioned cases apply to you, filing for bankruptcy may not be a good idea.

Declaring bankruptcy is not an easy decision and requires a lot of factors to be considered. However, when you admit that you have a problem with your finances and need a solution, you are on the right track. You then have to weigh in the options that may solve your problem and decide if declaring bankruptcy is the best among them.

What Happens if I Am Unable to Payback My Payday Loan?

Unable to Payback Payday Loan?

Unable to Payback Payday Loan?

Payday loans can be a great way to get a quick influx of cash when an emergency, such as a broken down car or a medical bill, hits. However, because people tend to take out payday loans online when they are already having financial troubles, sometimes it can be difficult to pay them back.

Although you should try and pay back any loan as soon as possible, payday loans are unique in several ways. For one, since direct lender online payday loans tend to be in small amounts and for a short term, the interest rate can be very high. This might sound worse than it actually is. Yes, the interest on the $500 loan will be significantly higher than the interest on a banks $10,000 loan, but that is because the original number is already much smaller.

Generally, if you cannot pay back a payday loan on time, one of two things will happen. The first is that your lender will try and withdraw the agreed upon amount from your account and, if there are insufficient funds, this could cause the bank and your lender to charge you fees. To avoid this, you can almost always talk to your lender and have him extend the loan for a small fee.

Although it is not ideal to not pay back your payday loans, in most states, your lender will not be able to sue you or garnish your wages, and in no instances can you be sent to jail for not paying back a loan of any kind. Still, just like any loan, payday loans should be paid back in the agreed upon fashion. Before taking out a loan, be sure to look at the terms and agreements so that you know exactly what you are agreeing to.

Since payday loans generally don’t have much more of a risk than any loan (interestingly, they are often loans with no credit check), and since they are a good way to get cash quickly in an emergency, you can use gadcapital.com to find a payday loan lender today! Just fill out our online form and get connected with lenders now!