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How To Avoid A Personal Finance Crisis

by: Bobby Iyengar

Most people do not spend time addressing their personal finances in sufficient detail ahead of unexpected and scheduled expenses. This causes significant financial crises for many families. This article addresses the issues of proper planning to avoid a personal finance crisis.

It is in the news nowadays all over the place about the home mortgage crisis that is crippling the housing industry in America. Elsewhere in the world, there is similar news about the real estate slowdown. Many families are unable to keep up with the increasing cost of energy as oil prices have been skyrocketing. To add to it is the expense of college education for children, car payments and other revolving credit card payments and the net result is a massive level of stress in the financial health of the family and a potential personal finance crisis.

The age old adage of prevention is better than cure is applicable one more time here. The only way in which one can avoid a personal financial crisis is by proper pre-planning. Keep it simple; one does not need to complicate matters any more than they have to be. Start off with your take home income and budget a certain amount for rent or mortgage, a certain amount for energy, food, transportation, education and miscellaneous expenses. You need to categorize each of these into further sub divisions and really pin point the budgeted expenses. There needs to be a savings plan for a rainy day and sufficient life insurance coverage expenses also in the event that the main breadwinner of the family passes away.

Once these expenses have been written down, then additional analyses need to be performed. If the income meets or exceeds the expenses, then you are in good shape. If the income falls short of the expenses, then you have simply only two choices. One choice is to cut down the expenses. The other choice is to find additional sources of income. There is no magical way in which you can finance yourself out of debt by borrowing additional money by any means. You do not want to get caught in the perpetual debt machine. Debt comes at a price and I cannot believe that there are people that borrow more and more to pay for things they cannot afford in the first place. Proper personal finance planning is absolutely essential to avoid crises in the future and one needs to be honest in drafting and executing such plans.

Tags: avoiding a Crisis

Chapter 13 Bankruptcy Automatic Stay

Whenever a bankruptcy case is filed in a court (it can be under any chapter of the Bankruptcy Code) the automatic stay starts.

The automatic stay helps the debtor to protect his money or property from the creditor. Ones the case goes to the bankruptcy court all the lawsuits need to stop. A creditor is then prohibited to claim any property or money from the debtor until and unless the decision is made by the court. According to the chapter 13 bankruptcy the creditor is not even allowed to even ask money from the co debtor. The creditor or any third party trying to recover debt from the debtor is not allowed to make phone calls regarding the payment or have letter law suits. In fact, if knowingly they do, it is called contempt of court and they can be punished or fined for that.

The most important benefit that a debtor has is that if any property (like repossessed machinery, autos, money, tools, bank accounts or anything else) is ceased by the creditor then it has to be returned to the debtor.

However, if there are any criminal prosecutions against the debtor (in case he has violated any motor vehicle or criminal law) then that prosecution doesn’t stop in case of automatic stay. It doesn’t even effect the proceedings of alimony, child support or any divorce filings. It will not stop any tax audit proceeding as well.

The main purpose of the automatic stay is to give time and space to a debtor to decide what kind of plan they want. They can either opt for chapters 13, 7 or 11 of the U.S. bankruptcy code. In case of chapter 13 and 11 they need to decide in what way they will sort out their repayments.

The automatic stay generally remains effective until a debtor gets a discharge or a judge feels it is right to lift the stay on request of the creditor under certain circumstances or if the item of the property is not any longer the property owned by the estate.

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Personal Debt Bankruptcy – How to Legally Avoid Bankruptcy and Eliminate Debt by 50%

By Lindsey Engram

Personal loans are very common amongst American citizens and it is not a surprise that so many consumers have problems with debt caused by these loans. This the reason that so many opt for bankruptcy but there have always been better ways to deal with debt, consumers just didn’t know about them.

Bankruptcy has changed in 2010 due to the new laws that make consumers opt for debt relief options. To be declared bankrupt, you now have to spend more time in court and present more legal documents so that you can prove that you are unable to pay back your loan. This means more money spent on expensive lawyers and when you are in debt, the last thing you probably want is to give away money. And of course let’s not forget about the credit score that will be very low for years to come, thus preventing any creditor from granting you another loan.

A credit score is something each of us has, and it is used amongst creditors to determine how reliable a client is and how likely he is to pay back his loan. A low credit score can be the result of many things, like missed payments, a big amount of debt and especially previous bankruptcies. When you file for bankruptcy you clear your debt and your creditor takes nothing from the loan, this makes you very unprofessional and so you won’t be eligible for another loan any time soon; in a rising economy this can be a very big impediment.

Now you use debt settlement and legally eliminate 50% of your debt. I know this sounds to good to be true, but with the help of a good debt settlement company this is very realistic. They will negotiate and settle on a smaller amount of debt so that you can afford to pay back something and not file for bankruptcy. Don’t worry about falling behind on your payments again because now you will also have lower interest rates and you should be able to clear your debt in maximum three years to avoid any further financial problems that might occur with a long period.

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