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6 Tips For Avoiding Bankruptcy

tips for avoiding bankruptcyThe proliferation of credit cards and the “gotta have it now” American lifestyle have lead to a problem: for many Americans, living with debt is par for the course. The changes in America’s financial landscape due to COVID and resulting lockdowns have only made things worse. In many cases, debt spirals out of control until filing for bankruptcy appears to be the only way out.

Most of our clients are regular, hard-working DFW-area residents who simply hit an unexpected bump in the road. Whether it was the loss of a job, reduction in wages, or an accident, a single speed bump on the road of life can send you in a completely different direction.

Once you start living on credit and spending more than you can afford to pay off, the debt multiplies quickly until it seems like there’s no escape. (more…)

By |2021-09-26T14:26:16-05:00September 26th, 2021|Bankruptcy, Debt, Personal Finance|

Should I File For Bankruptcy?

Filing for bankruptcy is a huge decision, and usually it has to be made under pretty extreme stress. Your circumstances are unique – so the best way to know if you should file is to call us at 214-760-7777 for a free consultation. The pandemic and ensuing lockdowns have made the situation even more stressful for many DFW area residents. This post will help answer a few high level questions, but it is always better to talk to an expert to get answers about your specific situation.

In general, these are a few of the most important questions to consider before filing for bankruptcy:

  • Can you pay back your debts outside of bankruptcy?
  • Are creditors suing you to collect their debts?
  • Are you facing foreclosure or repossession of your property?
  • How much property do you own?

Can you pay back your debts outside of bankruptcy?

Before you decide to file for bankruptcy, think about the types of debt you are trying to eliminate – and consider whether you can pay off those debts outside of bankruptcy. For example, if your main struggle is credit card debt, determine whether you can really afford to pay it off. If you make enough money to pay back your credit cards, you could consider consolidation, where you combine them into a single loan or settle your debt with the credit card company. (more…)

By |2021-05-25T16:27:55-05:00May 25th, 2021|Bankruptcy, Personal Finance, Texas Bankruptcy|

6 Tips to Avoid Holiday Debt

6 tips to avoid holiday debt on Black FridayThe holiday season is upon us again, with Black Friday and Cyber Monday just a few weeks away. The holiday season, and Black Friday in particular, are designed to get Americans to spend as much money as possible. This year, the COVID lockdowns will change the way people shop for the holidays. The doorbuster shopping events won’t happen this year – everyone will be shopping from home.

Shopping online can be more dangerous for your debt situation, since you’re not physically at the store and paying attention to the prices of the items you’re buying. Plus, credit cards give you the illusion that you can spend more money than you currently have, so many Americans fall deeper into debt during the holiday spending season. Making matters worse, gifts bought on credit cards end up costing far more than if you paid cash, once you factor in interest rates and finance charges. There’s also the fact that if you max out your credit limit, your credit score will drop.

Once the holiday season is over, the warm fuzzies disappear, and you’re left with even more debt. This year, we thought we’d share a few holiday spending tips to help you avoid over-spending, and hopefully help you avoid any more debt. Once you realize that Black Friday is specifically designed to get you to spend more money than you planned on spending, it’s easier to avoid the holiday credit card blowout.

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By |2020-10-28T16:53:01-05:00October 28th, 2020|Bankruptcy, Personal Finance|

Bankruptcy and Divorce – What You Need To Know

bankruptcy and divorce in DallasMany times, financial difficulty leads to stress in a marriage. In cases where the financial stress leads to divorce, the issues often lead to bankruptcy filings.

The question that we hear the most often from clients regarding divorce is “What should we do first – the divorce or the bankruptcy?”

There’s actually no easy answer for that question. Every situation is unique, so if you’re asking the same question, you should consult with an experienced bankruptcy attorney. Your attorney will be able to look at all the factors and suggest the route that will work best for you.

In general, if certain conditions are present, filing for joint bankruptcy before the divorce will be the fastest, most cost-effective option:

  • Both spouses know that they’re going to file bankruptcy
  • There are few, if any, assets that would be exempt under bankruptcy laws, so not much will be divided in the divorce
  • The emotional situation isn’t so hostile that the spouses wouldn’t cooperate in a bankruptcy proceeding

If one spouse won’t agree to joint bankruptcy

If your spouse won’t agree to a joint bankruptcy, you can still file bankruptcy on your own. When your debt is discharged, the creditors would then start collection efforts for the entire debt against your spouse (since the debt is the responsibility of both spouses). (more…)

By |2022-06-01T11:17:29-05:00September 24th, 2020|Bankruptcy, Personal Finance|

How To Pay Your Bills On Time

how to pay your bills on timeSometimes the simplest things in life can be the hardest to do. The concept of paying an invoice on time is fairly simple, but with life throwing you unexpected curve balls, getting a check in the mail or making a payment on time is sometimes the last thing on your mind. Especially during the huge unknown of COVID, it’s important to stay on top of your bills so you don’t get behind.

Even though paying bills is a mundane task, doing so on time results in several positive effects:

  • You avoid late fees. You don’t have to part with more money than you should.
  • You keep your lights on. If you don’t pay your bills, the companies will eventually cut off their service and you could be left in the dark.
  • You keep your credit score in good standing.
  • You get peace of mind. Save yourself from worrying about what will happen if you don’t pay your bills on time.

If you’d like to achieve these results, here are a few tips to help you get on schedule with your bill pay system.

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By |2020-08-28T10:16:30-05:00August 28th, 2020|Money Management, Personal Finance|

8 Holiday Shopping Tips for 2019 To Avoid Racking Up Debt

The 2019 holiday shopping season is almost upon us. Notoriously, holiday shopping is one of the largest contributors to increased credit card debt – people get in the holiday spirit and spend much more than they should.

This year, you can shop smarter and still get gifts for everyone on your list, all while avoiding additional credit card debt. With a bit of planning and a smidgen of self control, you won’t have to be afraid of this year’s holiday shopping season. (more…)

By |2019-10-28T16:52:17-05:00October 28th, 2019|Personal Finance, Saving Money|

How are credit scores computed?

how are credit scores calculated?Credit, by definition, is your ability to borrow money. Information that is included on your credit report could sway a potential lender one way or another in deciding whether to extend credit to you.

There are 3 major credit reporting bureaus:
Equifax
1-888-548-7878
www.equifax.com

Experian
1-888-397-3742
www.experian.com

TransUnion
1-800-916-8800
www.transunion.com

Under Federal law, you are entitled to a copy of a free credit report from each credit bureau each year. The credit bureaus have established a website in which to obtain a free copy of your credit report at www.annualcreditreport.com.

A credit report is more than just a list of the lenders and a person’s payment history. Credit reports contain information that can be used to help lenders determine whether to extend credit to you.

Here is a list of some of the things a credit report may list:

  1. Anywhere you have applied for credit
  2. Your name, Social Security Number, and your spouse’s name
  3. Your current and previous addresses, name and address of your employer, as well as your income level
  4. Information regarding lawsuits, foreclosures, repossessions, and whether you have filed for bankruptcy

Why are all these pieces of information listed on your credit report? Companies want to know whether you can be counted on to pay back your debts. Not only do lenders look at your credit report, but insurance companies look for risk factors on it, employers can use it to screen applicants, and landlords can use it to screen tenants to determine if they are likely to pay the rent on time.

Lenders use all of the information on your report to derive a credit score on you. A credit score is a number used to rate your credit worthiness. There are a number of different scoring systems. One scoring system is known as the Fair Isaac Corporation (FICO) Credit Score. This score ranges between 300 and 850. According to FICO, 40% of the population score at 690 or lower, while 40% score 745 or higher, with just 20% above 780.

Lenders want to know whether a borrower will repay a debt once a loan is extended. Then, the lender can use the score to determine how much to lend you, and what interest rate to charge you. Lenders assign points to the various aspects of your credit report.

Five factors are weighed most heavily when making this calculation:

  1. Debt to income ratio. This is the proportion of how much total debt you have relative to your income level. This is the single largest factor that creditors consider in determining whether or not to extend a loan or other credit to you. Even if you have no balance on a credit card, your credit limit is still added to the debt side of your debt-to-income ratio.
  2. Payment history. This factor considers whether you have paid your debts on time, including mortgages, car notes, credit cards, store accounts and loans.
  3. Length of credit history. Lenders look to see how long you have paid on your debts. Good past payment history can help sway a lender to loan you money if you’ve had recent issues that could negatively affect your ability to get the credit.
  4. Recent credit or applications for credit. If a lender sees that they are the tenth place this month that you are trying to borrow from, it could send up red flags.
  5. The type of credit for which you are applying. Lenders that will retain a security interest in collateral, such as a car or mortgage company, may be more willing to lend money to more ‘at risk’ borrowers when the lender knows that they can always take back the collateral in the event of default on payments.

Other factors that lenders look at to determine who is a good credit risk are:

  1. Education level. The higher the better.
  2. Length of time at current residence. If you move around a lot, you lose points, but if you relocate for a better job and show your income is higher, that helps get you points.
  3. Length of time at your current job. The longer you have been at your job, the better risk you appear to be.
  4. Homeowner v. Renter. Homeowners are considered better credit risks than renters.

Creditors like stability. If you can show you are a stable, reliable person who has the ability to repay your debts, you will be a much better credit risk to a potential lender.

Everyone should always review his or her credit report periodically. Errors can be and are made. Just a few points can make or break your ability to acquire new credit. Therefore, it’s crucial to have an accurate credit report. Over the last few years, identity theft has become a bigger and bigger problem as well. An uncorrected error can cause years of stress and frustration. The credit reporting bureaus must correct any inaccurate information on your credit report, but you need to bring the inaccurate information to their attention. Once corrected, the bureau is supposed to send you a free copy of the credit report showing that the inaccuracy was corrected.

By |2019-01-28T14:17:07-06:00January 28th, 2019|Personal Finance|

6 Tips to Keep Holiday Spending Under Control

tips for controlling holiday spendingIt’s that time of year… Holiday shopping is stressful for everyone, but it’s especially tough for families that are already struggling with overwhelming debt. You don’t have to spend a fortune to have a happy holiday season! Follow these tips and you’ll reign in the spending and skip the spending stress.

1. Make your own list

Santa makes a list and checks it twice – you should too. It’s easy to get caught up in the gift-buying frenzy, but you don’t have to give gifts to everyone! Make a list of everyone you’re buying gifts for – aim for less than 6 people outside of your immediate family. For everyone else, bake cookies – it’s a more personal gift and lets you still acknowledge friends without breaking the bank. (more…)

By |2018-11-30T15:21:08-06:00November 30th, 2018|Personal Finance|

How To Help Your Wallet Survive Black Friday

Black Friday shopping tipsIt’s Thanksgiving week… which means we’re just a few days away from Black Friday. Sure, you can get some great deals on some of those items you have planned for Christmas – but it’s also one of the biggest factors contributing to the debt load of many American families.

Everything about Black Friday is designed to get you to spend more money. The hype for the shopping holiday now starts an entire month before Thanksgiving, and stores now commonly leak their specials several weeks before the actual event.

It’s easy to get caught up in the excitement – but it’s important to plan ahead so that you’re not adding debt that you can’t afford to pay off. The following steps will help your wallet (and your sanity) survive Black Friday:

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By |2017-11-20T15:24:37-06:00November 20th, 2017|Personal Finance|

Struggling with debt? Here’s how to avoid bankruptcy

avoid-bankruptcy
Debt is pretty much a fact of life for most Americans. Most families don’t teach their children how to responsibly manage money, which leads to problems down the road. The majority of today’s workforce has learned money management through trial and lots of error.

It’s far too easy to get overextended on your finances, and most people don’t realize that they’re in trouble until it’s almost too late. When you’re already stretching your finances to the limit, any unexpected bump can send you down the road to bankruptcy.

If you’re wondering if you’re overextended or starting to struggle with debt, the following signs show you’re in danger:

    • You don’t have any savings, or you have to pull from your savings every month for expenses
    • Other than your car payment and mortgage, you couldn’t pay off 100% of your debt within 1 year
    • You don’t actually know how much you owe
    • You use new credit cards to pay off old credit cards or loans
    • You use credit cards for everyday expenses
    • You always pay only the minimum due on your credit cards
    • You’ve paid your credit cards late, or skipped payments
    • More than 20% of your actual take-home pay goes towards debt

You don’t have to be behind – if you’ve got credit card balances that never seem to get paid down because you’re always making new charges, that’s a dangerous situation. A sudden accident with big medical bills or even the loss of your job would send you spinning out of control.

If you said yes to any of the items above and think you might be overextended, you should take immediate steps to get your financial situation under control. If you can regain control and stay on a healthy path, you’ll be able to avoid filing for bankruptcy.

Here’s how to get your finances on track:

        1. Figure out exactly what you owe. It can be scary to sit down and look at the big picture, but you need to know the exact number. Once you know exactly what you owe, you’ll be able to make a plan.
        2. Look at your total take-home pay for a single month. This is the most important number, because you have to create a plan where you’ve got more coming in than what you’re spending.
        3. Create a detailed budget. Figure out what you have to spend for the essentials – shelter, utilities, food, and transportation. Don’t count your credit cards or any other expenses here – you need to set your number for necessary expenses so you know what’s left over each month.
        4. Take the money that’s left over and start applying it to your debts. Pay the minimum amount due on every debt except one, and push as much as you can afford towards that balance. Once you’ve paid off that debt, move on to the next. If you make a solid, realistic plan for paying off your debts, it’s much easier to stick to your budget and be responsible with your money.
        5. Once you’ve paid off most of your debt, start saving. Build up your savings in case an unexpected event comes up – you don’t want to have to start all over!

Most importantly – stick to your budget even after you’ve paid off your credit cards. If you stick to your budget and plan ahead for big purchases, you’ll find that it’s easy to stay on top of your finances and avoid debt altogether.

By |2022-06-01T11:31:22-05:00July 30th, 2017|Bankruptcy, Debt, Personal Finance|
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