29 Jan 10 Last Resort Debt Solutions

If you find yourself very deep in debt, you only have two choices to resolve the problem: file for bankruptcy, or try and consolidate the debt. Filing for bankruptcy is a last resort, as that road will only lead you to more heartache and the scar you make on your credit will be almost impossible to heal. But some debts are too large to finance and successfully pay back. You have to weigh both options to see whether or not your debt is manageable, or if hitting bottom to start over is the best option.

The first step you should take is assessing your credit report. This will give you an accurate record of how badly your debt has damaged your credit score. You’ll also give an idea of how widely your debts span, and where exactly you owe money. The typical credit score is in the high 500-600s, anything slightly lower is manageable, but if you’re in the 300s that’s a severe problem. 300 is basically as low as it gets, at this stage it’s time to rethink your strategies.

Try to examine your monthly finances and see what you can cut to increase how much money you can pay out to eliminate your debt. Try and find as much as possible, so that you can live relatively comfortable, but also putting as much into the debts as possible. Paying off interest is a pain, and the worst part of debt, so you have to make sure you can pay well over the interest amounts, otherwise you’re just maintaining your debt.

If you find that consolidation won’t provide enough relief from interest rates, to pay off the debt within a number of years, bankruptcy might be your only option. Bankruptcy should always be a last resort, but if you’re so deep in debt there’s no way to dig yourself out, it’s almost a necessity. Your credit will be severely damaged, but any damage can be repaired as long as you don’t make the same mistakes the second time around.

Tags: 300s, Accurate Record, Consolidate Debt, Consolidation, Credit Report, Credit Score, Debt Solutions, Debts, Eliminate Debt, Filing Bankruptcy, Filing For Bankruptcy, Heartache, Hitting Bottom, How Much Money, Interest Rates, Last Resort, Scar, Second Time, Two Choices

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05 Nov 09 Buying Your First Home

Jumping into the purchase of your first home is not a good idea. Especially with the economic downturn taking place, you need to know your stuff. If you don’t know what you’re jumping into, you could get eaten alive by those willing to take advantage. An inexperienced person is a target for shady deals. The best way you can avoid this, is by doing your research, and truly preparing yourself for the home buying experience.

Your first step is cleaning up your credit as much as possible. A big purchase like buying a home is exactly what your credit is for. So yes, getting the loans necessary is going to take a big chunk out of your rating, so you want to be as high as possible beforehand. Request your free credit report from the three major bureaus. Check these over and clean up any blips, so that you can get as high a rating as possible.

We’re talking a great credit score here. That’s the only thing that will do when you’re trying to get a loan to buy that house. Anything below 600-650 is going to make things extremely hard on yourself. A credit rating below that level will make finding a loan without a cosigner, very difficult.

Now, so that you can target the right house for your price range, you have to do some financial work. No mortgage payment should be more than 30% of your net monthly income. Anything beyond that could stretch your budget pretty thin. So factoring that in, you have a good idea of the price ranges you should be prepared to look for.

From there it’s as simple as researching the realtors in the area you want to buy the house. Find a reputable one, ask around if you have to, or even research online. You have to make sure that your realtor is someone you trust, as you’ll be directly dealing with them concerning your home for some time. Once you find a good realtor, you’re set to start looking.

Tags: Blips, Budget, Buying A Home, Chunk, Cosigner, Credit Rating, Credit Score, Economic Downturn, Free Credit Report, House Price, Inexperienced Person, Loans, Mortgage Payment, Net Income, Realtor, Realtors, Shady Deals, Stuff, Target, Three Major Bureaus

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30 Oct 09 Joe Wonders, Should He Quit His Job Part – 2

Through this series, I am attempting to help Joe who wants to change is current job, but he is very much confused. He is not sure, if he is making a right decision or not. In the first part of the series we asked Joe some questions about his current job. In this part, we will ask questions about Joe’s financial condition and will also ask Joe to evaluate himself in terms of finance.

Analysis of Joe’s financial condition

Before Joe can jump out of his current job and take up a new venture, he needs to understand his present financial condition. If he is not very much sound financially then he should stick to his current job until his financial condition improves. To find out how healthy is his financial, Joe needs to ask the following questions:

How good is your credit rating? Joe needs to have a very healthy credit rating before he should quit his job. If his credit rating is not good then Joe should stay in his current job and build a strong credit score before he can think of quitting the job.
Can he sustain his life for six months without a regular income? No matter how starry-eyed Joe is, he will not be able to make any difference, if all he got is dream. He needs to think about his family and their life. He needs to put bread on the table, pay his bills, support his child, and have some savings for medical and other emergencies. And if Joe can do all these for six months then Joe is good to go. He should quit the job and chase his dream. Six month is a long time, if his dream is realistic and executable, he can start anew in this period.
Does he have sufficient savings to support his dream?
From where is he planning to get financial support to go all in?
Does he have medical and insurance policies in place? When is the premium due? What if he fails to make the premium? How much will it affect his and his family’s medical and insurance coverage?
What about his retirement plan? How will it get affected if he fails to make deposit to his retirement fund?
Is his wife earning? Can she support Joe’s family? And for how long can she do so?

Joe would not like to put his family life in jeopardy by making a reckless decision. Hence, these questions are worth considering before he could bid adieu to his current job.

Tags: Chase, Credit Rating, Credit Score, Emergencies, Finance Analysis, Insurance, Insurance Coverage, Insurance Policies, Job, Long Time, New Venture, Pay Bills, Retirement Plan, Right Decision, Six Months

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29 Jan 10 Last Resort Debt Solutions

05 Nov 09 Buying Your First Home

30 Oct 09 Joe Wonders, Should He Quit His Job Part – 2

Analysis of Joe’s financial condition

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