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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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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!
      6. 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.

How to dispute an error on your credit report

report an error in your credit reportWhile most of our clients need bankruptcy because they’re struggling with uncontrollable debt, every once in a while we talk to people who simply have problems with their credit reports. Sometimes it’s a result of identity theft, and others it’s simply an error in reporting.

It’s surprising how often we hear the question, “How do I fix an problem on my credit report?” – and while we specialize in helping clients with their bankruptcy cases, we’ve learned a few things about dealing with incorrect credit reports over the years.

If you want to dispute an error on your credit report, these tips might help: (more…)

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. 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 people who simply had a 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 really send you in a 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.

The best advice we can give when it comes to bankruptcy is to simply avoid the situations that could lead to bankruptcy in the first place. These 6 tips can help you stay on a solid financial foundation and avoid bankruptcy:

1. Pay off your debt over time

If your debt isn’t too far beyond your control, sit down and take a look at how much you owe. If you can re-adjust your budget and stick to a plan, you might actually be able to pay down your debt on your own.

2. Sell some assets

If you’re like most Americans, you probably have lots of “stuff” that you don’t really need. Instead of hanging on, sell off the items you can live without to get some extra cash to pay off your debts. You can sell furniture, jewelry, or even electronics.

3. Ask creditors for help

The credit card companies would rather get something from you than nothing at all. Call your creditors and let them know you’re struggling to pay your bills. You might be able to lower your monthly payments or even decrease your interest rate. It’s important to stay responsible if you go this route – you’ll have to be sure to stick to your plan and pay off your debts.

4. Ask friends or family for help

It might be embarrassing to let your friends and family know about your struggle with debt, but a bit of moral support can go a long way. If your loved ones know that you’re trying to stay on the straight and narrow, they can help you avoid temptation. You won’t have to put on a show so that everyone thinks your financial situation is problem-free.

5. Live within your means

We’ve said this many times before – you simply can’t spend more than you earn. Credit cards make it far too easy to spend money you don’t have. Avoid the temptation and adjust your spending habits, and don’t buy things you don’t need.

6. Set a budget and stick to it

The single most important tip for avoiding bankruptcy is to set a budget – and stick to it. Obviously, a budget won’t matter if you’re not going to follow it. You’ve got to look at how much money you bring in, how much you spend, and what’s left over. Include your payment plan for paying off your debts.

The 4 Dumbest Money Mistakes, According to Shark Tank’s Mr. Wonderful

4 dumb money mistakesWe read an amazing post yesterday, and just had to share it here on our blog. Shark Tank’s Kevin O’Leary, known as “Mr. Wonderful”, shared the 4 most common money mistakes that people make.

According to O’Leary, the most important question you need to answer about your life is “How much does it cost you to be alive?” If you can’t answer that question, you’ll be in serious financial trouble soon.

Common money mistake #1: Buying crap clothes you don’t intend to wear

Far too many people buy clothes they don’t end up wearing. Most people wear the same 20% of their clothes 80% of the time. Stop buying clothes just to buy clothes – instead, invest in high quality clothes and wear them out. (more…)

Wondering how bankruptcy will affect your tax refund?

 

It’s tax season again, and we’re getting a significant number of calls from people wondering what will happen to their tax refund if they file for bankruptcy.

It really depends on two factors – what type of bankruptcy you’re filing and the size of your refund. With a Chapter 7 bankruptcy, most of the time your refund will be protected because it’s considered an asset. If you’re filing for bankruptcy during tax season, make sure you work with your attorney to be sure you’re maximizing your refund. When our clients are filing for bankruptcy around tax season, we typically encourage them to wait and file after they get their refund – then they can use that extra money to help with the cost of the case.

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5 Tips to Lower Your Debt

5 tips to lower your debt

Sometimes, we talk to potential clients who are surprised when we tell them that bankruptcy might not be their best option. During every free consultation, we map out the financial picture for a potential client, then walk them through every available option.

Many times, people are overwhelmed by their mountain of debt. Someone told us recently that they felt like they were trying to dig a hole using a single chopstick. Even though it feels like a lost cause, many times you can avoid bankruptcy by using one or two of these tips:

1. Talk to your creditors

It never hurts to ask for a little help. Hopefully, you know everyone that you owe, but if you’re not sure, pull your credit report. Make a list of everyone you owe, and how much you owe each institution. Figure out how much you’re able to pay each one. Call each company you owe and tell them that you want to pay off your debt, but you’re only able to afford a certain amount. Sure, debt settlement will go on your record – but it’s better than not paying anything and letting your debt continue to spiral out of control.

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5 Steps to a Financially Steady 2016

5 financial tips for 2016
Now that 2015 is coming to a close (can you believe it?), it’s time to look forward to 2016. No one plans to let their debt get out of control – most of our clients have been good people who simply had unforseen events occur. By planning ahead and making good financial decisions, you can avoid those credit-busting bumps in the road.

The best way to avoid bankruptcy is to set a solid financial foundation and stick to your game plan. The following tips will help you plan ahead and form the right habits so that 2016 will be the year you can finally feel secure.

1. Talk about money

If you can’t dedicate the time to sit down and talk about your finances, then nothing else matters – the rest of the steps will be pointless. It’s important to talk openly about your money, so you know what’s coming in and what’s being spent. If you wait for a financial crisis, it’s probably already too late. If you sit down with your spouse and set goals together, you’re much more likely to stick to the plan you create.

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What happens after bankruptcy?

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One of the most common questions we hear from our clients is “So – what happens AFTER bankruptcy?” Most people are so caught up in the overwhelming debt, the collection calls, and the possible repossessions or foreclosures that they don’t take the time to think about what will happen once bankruptcy gives them a fresh start.

At the end of your Chapter 7 or Chapter 13 case, you receive your discharge. Now that your financial troubles are settled, it’s time to move forward. You’ve got to start rebuilding your credit and forming solid financial habits that will keep you debt-free.

Keep a copy of your paperwork handy

It doesn’t happen often, but sometimes creditors might try to harass you to collect on a debt, even after it’s been settled by your bankruptcy case. Even though they can get in serious trouble, it does happen every once in a while. If you’ve got your paperwork handy, it’s easy to stop them cold with your discharge.

Make sure your credit report gets updated

A few months after your discharge, get a free copy of your credit report and check it out. Sometimes it takes a while for the report to get updated after your bankruptcy, but it SHOULD show that each debt included in your discharge is listed as “discharged in bankruptcy.” If you find any that still show that you owe, you can send a copy of your discharge and the schedule that shows the debt was included in your bankruptcy case. (more…)

Rapper 50 Cent Files For Bankruptcy

50 Cent files for bankruptcy

In case you hadn’t heard yet, rapper 50 Cent has filed for bankruptcy in a Connecticut court. While the Internet has been making punchlines for the last few days since the news broke, most people don’t seem to know the details of the case.

50 Cent, whose real name is Curtis Jackson III, filed for Chapter 11 protection immediately after losing an invasion of privacy case last Friday. He had posted a sex tape on his site with his own audio commentary, and was ordered to pay $5 million in damages.

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