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Re-financing and Using a Mortgage as a Bankruptcy Alternative

 

As personal debt levels continue to increase, people are left to explore their options to deal with their debts. If you own your own home, it may be possible to re-finance your home to deal with your financial problems.

As we have discussed in our articles on Getting a Mortgage to Pay off your Debts and on Ways to borrow against your house as a bankruptcy alternative it is possible to use the equity in your house to repay your higher interest rate debt.

The process is not complicated at all.

The mortgage broker starts by taking an application and getting the clients story. Here’s how a mortgage broker explained it:  “If the deal is pretty straightforward I process the application (getting the best deal possible) and obtain an approval. Sometimes a client may not fit the guidelines and I may have to work with the lender to sell the deal. I have quite a good rapport with many of my lenders and because of this they will work with me to get the deal done. After obtaining the approval an appraisal may have to be done which I also arrange for you. Next papers must be signed and documents collected from the client. To do this I usually meet the clients at their home at a convenient time whether it is during the day, an evening or a weekend. From there it’s pretty clear sailing and the deal closes” explains the mortgage broker.

Contact a local mortgage broker to determine if a mortgage refinancing is a suitable bankruptcy alternative for you.

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Posted by Editor Bankruptcy Alternatives @ 2:11 am
 

Budgeting as a Bankruptcy Alternative

 

No not budgeting! We all hate the “B” word. Budgeting is hard. Making a budget is boring! Budgets don’t work!

If you believe any of those statements about budgeting, read on.

If you want to avoid personal bankruptcy, you need a budget. And you need a simple budget so that you can stick to it.

A budget is simply a list of what you make and what you spend. That’s it. That’s a budget. It’s just a list. Why is that scary?

So get a piece of paper, and make a list of everything you spend money on. Or, use your computer to create a Personal Budget Spreadsheet.

To keep it simple, use one column, or one page, for every time you get paid. If you get paid weekly, you should have a column for every week. If you get paid every two weeks, then divide your expenses up every two weeks.

If you get paid twice per month, and your rent is $1,000 per month, then your budget will have two columns per month, and will show $500 for rent in each column. If your landlord will let you pay your rent twice a month, life is easy. If not, leave $500 in the bank after this paycheck, so that the money is there next paycheck when you pay your rent, just like your budget says!

It’s that easy. You can read more in our articles about how to make a personal budget and personal budgeting information, so get started today.

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Posted by Editor Bankruptcy Alternatives @ 11:38 am
 

What Your Children Can Teach You About Your Bankruptcy Alternatives

 

I was in a store the other day, and I watched as a young child, with his mother, purchased some candy. The child handed a dollar to the cashier. The mother also purchased some things, and also gave the cashier some money. The cashier then gave all of the change, from both purchases, to the child.

As they were leaving the store, I heard the child say to the mother, “Mom, she gave me back too much change.” I was astounded that this child, who was probably only five or six years old, realized that they should have only gotten a few cents change on their one dollar purchase, not the obviously more than a few cents change that they received. The mother explained that the cashier gave him all of the change, and the child appeared to understand.

What amazed me was how knowledgeable about money the child was. Sometimes as adults we forget that children understand more about money than we think.

If you are experiencing money problems, your children will know; you can’t hide that from them. Therefore, involve your children in your decision making, doing what’s appropriate for their age.

A teenage child is certainly capable of helping understand the family budget. (They may be even better on a computer than you, so get them to set up your personal budget on a budget spreadsheet on the computer).

A young child can understand that we can’t buy everything we want. Older children can also understand the difference between personal bankruptcy and other possible solutions, such as debt consolidation loans.

Your children are smart, so involve them where appropriate as you consider your bankruptcy alternatives.

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Posted by Editor Bankruptcy Alternatives @ 5:49 am
 

Put your Debt on a Diet

 

In my previous post about fad diets and avoiding bankruptcy, we discussed how people trying to lose weight are similar to people trying to avoid personal bankruptcy. A diet promotes weight loss; you can avoid bankruptcy but putting your debt on a diet.

First, start by paying more than the minimum payment on your each month. With most credit cards your minimum payment is only 2% or 3% of the outstanding balance, so on a $5,000 credit card balance your $100 minimum payment would only lead to a small reduction in the principal owing; most of your payment is going to interest. By paying more than the minimum, you will pay off your credit card much faster.

Next, all diets require you to eliminate bad foods, so do the same with your credit cards. Cancel all but one of your credit cards, so that you are not tempted to use them again. Then you can devote yourself to repaying them.

Finally, when you make extra payments each month, pay extra to the highest interest rate cards first, because that will generate the greatest savings.

By putting yourself on a budget, your debt diet will help you pay off your credit cards faster, and help you avoid bankruptcy.

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Posted by Editor Bankruptcy Alternatives @ 2:17 pm
 

 


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