Filing bankruptcy does not end the possibility of obtaining a personal loan. In fact, a person who files bankruptcy can obtain a bad credit personal loan in as little as 30 days after the discharge of the bankruptcy. And since they cannot file for another bankruptcy for seven years, this provides insurance for companies that are willing to take a chance on someone with bad credit knowing that they have legal recourse to recoup the amount of the loan.
Many traditional lenders won’t lend money to someone who has filed bankruptcy, but there are other lenders who cater to those who have filed bankruptcy. Even though individuals who have filed bankruptcy have been counseled at the time of their filing on financial management and responsibility, there is no law that says they have to follow the advice.
After a bankruptcy is discharged, individuals are free to go out and take out bad credit loans as they please and there are companies that flock to them.
Although bankruptcy records are open the public, and their availability is often seen as an embarrassing punishment for ignoring past responsibility, the availability of bad credit personal loans after bankruptcy has many taking that route to get out from under a heavy debt load. Even with the new laws there are those who continue to pile on debt and file for bankruptcy every seven years or as soon as the law permits.
Multiple Bankruptcies Don’t Matter
While many laws exist over who can offer bad credit personal loans after bankruptcy and the interest rates charged for them, there is no laws governing who can apply for them. Even a person who has multiple bankruptcies in their past are free to seek financial help wherever they can find it. Despite the significantly higher cost of bad credit personal loans after bankruptcy people often flock to the lender offering such loans.
Few, if any of the lenders offering bad credit personal loans after bankruptcy require any type of collateral for the money, even knowing there is a good chance the loan will go into default, the recourse available, including wage garnishment, make them a profitable business. When a person defaults on bad credit personal loans after bankruptcy a court-ordered repayment is typically granted for the amount of the loan and any costs associated with collecting the loan.
Often the cost of collection approaches the amount of the initial loan along with courts costs, attorney fees and collection agency fees, all charged to the delinquent creditor. This adds even more to the cost of obtaining bad credit personal loans after bankruptcy.
In todays world of “plastic purchases,” many kids are growing up with little understanding of the financial realities of life. As parents, our paychecks are directly deposited into our accounts, we pay bills online, and use credit or debit cards to make purchases.
While these methods are certainly convenient, they may be robbing our children of the valuable lessons they will carry into adulthood. What can we do today, to teach our children the value of money? What tools and experiences will they need to become fiscally responsible adults? Most importantly, how do we get started?
There are many ways to teach your kids about money. One place to start is with an allowance. By giving your children an allowance, you are beginning an important conversation that will hopefully continue through to adulthood. It also gives you and your spouse an opportunity to evaluate your own financial habits and goals, changing any bad habits that you may be struggling with.
When determining an allowance, it is necessary to first decide what you are trying to teach your kids. For younger kids, it is a good idea to teach the basics of saving. A young child may be given 10 dimes each week. This makes it easy for her to understand the concepts of saving. One basic breakdown is 10% to long term savings (like a college fund,) 20% to savings (for a special toy, etc.) and 70% to spend.
Use three different jars, each week putting one dime in the college fund, two dimes into savings, leaving seven dimes to spend. The concept is that this equation for saving will become a lifelong habit, continuing as the allowance increases.
When teaching older kids to budget, give them an amount that can cover their needs, but will still require them to make decisions about their purchases. Decide together what purchases they will be responsible to pay for with their money. This is the time to establish expectations.
You may also teach basic budgeting skills to make sure that they understand that the money has to last the whole week, month, or “pay period.” A few failures may help to reinforce these lessons, and ensure success later on.
In high school, encourage your child to seek employment, and become even more financially independent. Hopefully, by now your child has established good financial habits. Now is the time to open up their own bank account with a debit card, and a separate savings account. Giving children the opportunity to succeed or fail with a debt card while still at home, can help to prepare them for financial success when they leave home to begin college or their career.
Television commercials and mass mailings may make debt consolidation seem like a simple process. Often by the end of a 30 second ad, the formerly anxious, debt ridden consumer is smiling and shaking hands with a caring debt consolidation counselor, and all their problems seem to have vanished.
While there are many options available to consumers, the three most commonly advertised forms of debt consolidation are: credit counseling, debt management programs, and debt settlement. Consumers sometimes mistakenly assume that these options mean the same thing, involve the same process, and are interchangeable. This idea is wrong on all accounts.
Credit Counseling is often the first stop for those interested in eliminating debt. It is simply professional help to develop a budget, encourage discipline, and reevaluate spending. This is a good option for people who have a steady income, and have just made some poor financial decisions.
Counselors offer advice and explain your options, however, they do not cut your monthly payments, or reduce the amount you owe. They can contact creditors to lower interest rates, but you can do that yourself. Most importantly, credit counselors can help you to know when declaring bankruptcy is your best option. It is now necessary to meet with a certified credit counselor for six months prior to declaring bankruptcy.
Debt Management Programs are the way that credit counselors help to pay down your debts. They take one monthly sum, and redistribute it to cover all your bills. Basically, the counselor takes your paycheck, keeps what is needed to pay your bills, and gives you an allowance. These programs ensure that your creditors are paid, and you are making progress toward getting out of debt. Only about 35% of all the people involved in credit counseling qualify for a debt management program.
Debt Settlement is the third option available to consumers, but experts advise caution when using these types of programs. Basically, consumers make payments to the agency, where the money will sit until the creditors demand payment. The debt settlement agency will then renegotiate your debts agreeing to pay pennies on the dollar. The creditors usually agree to these terms, as the alternative is to receive nothing at all.
Frankly, this is a dangerous, and unethical way to go. First, you are not saving any money, as you make full payments to the debt settlement agency, who is earning interest on the held money. Second, if you miss even one payment to the agency, oftentimes you lose all the money youve paid to them as a fee. Finally, it is your credit, not the agency’s that takes a beating in the process; this option can reflect as poorly on your credit score as declaring bankruptcy.
Understanding the programs available to you is essential as you begin the process of debt consolidation. Credit counseling can be a great tool in helping to discipline spending, and create a plan for the future–just make sure you know what youre getting into.
If you’ve managed (or mismanaged) to get yourself into a boatload of debt, there are ways to insure that this never happens again if at all possible, and the cornerstone of these ways is a sound, well-thought-out budgeting program. While this may not seem like a very sexy answer to what appears to be a huge problem, it is in fact the most essential part of your future going forward from here.
If you don’t manage your money better, you’ll only end up in the same position all over again. I have known many who have dipped their toes in this well far too often, and it has been not only their financial ruin, but sometimes also at the cost of their families. Debt and sensible budgeting are definitely things to get a handle on! Let’s look at some of the ways you can do that.
First of all, if you are married, this needs to be a joint effort. Nothing will bring ruin to a marriage faster than a spouse running rampant with the finances. You need to be in agreement here, both on the totals and the categories of spending. There needs to be give and take. There needs to be some hard questions. There needs to be an accounting of your financial lives that takes into account your needs, and what you can live without. You need to be totally honest with one another, or this is simply a waste of time.
Many people who are in debt trouble resort to the envelope system, where you put each month’s allotment for certain expenses into an envelope in cash, and when this is gone, so is the budget for the month for that item. Obviously, things like your mortgage won’t fit in this envelope, nor should automatic payments. This is intended for controlling discretionary spending that has gotten out of hand and needs to be tracked.
It is surprisingly effective. Some of the categories you might consider are clothing, entertainment, eating out, even Starbucks. I know people who were shocked to discover that they spent several hundred dollars a month there!
The main point about implementing a budget needs to be the long-term aspect of all this. It will do you next to no good to do this for a month or so. Sound household budgeting is really no different than using a budget for your business. Most people wouldn’t consider running a business that way, so neither should you run your home that way. It is YOUR business!
In this day and age when prices keep creeping up and saving is getting harder and harder to do, make it easy on yourself and find the extra dollars to save and invest in the money you already have.
There are free budgeting forms available all over the web. Find one you like and start using it, and maybe, just maybe you’ll find more money at the end of the month this time.
Having poor credit can certainly impede you the next time you want to purchase something that you have set your heart upon, though lack of proper credit standing will mean having to forego such things in life. Yes, bad credit can not only mean that you dont get what you want, but you may even spend sleepless nights worrying about how to fix the problem, though there are many people that will proffer you advice as to how to go about bad credit repair; even so, the best advice would certainly be to do it yourself.
Several Steps to Take to Repair Your Bad Credit
There are several steps to take in repairing bad credit- the first of which is to take the simple step of requesting a copy of your credit report from the credit bureau. Once you have this, take a few moments to review it, and make note of any potential errors or questionable entries.
In a do-it-yourself credit repair, the next process is to visit the website of the Federal Trade Commission. Find out what consumer rights protect you and how you can use them to your advantage.
Once you are aware of your rights, you will find that you can get false and incomplete transactions removed from your credit report. This is a huge step in repairing your credit. Removing such transactions must be done by credit agencies, which they must do to keep from paying penalties.
Once this step is complete, you should write a letter to the credit reporting agencies, disputing what you’ve found to be wrong with your report. After taking this step, be sure to continuously monitor the progress of your complaint with the agency.
It may take a month or so before errors are verified by the credit agency. If you were right, the credit agency will acknowledge these claims, and the errors will be corrected. Your credit report and credit standing will thus be improved.
With persistence and hard work, repairing your own less-than-perfect credit report is doable. Following proper and sound advice on how to do so, can lead to your credit scores improving within a short time, and the only cost to you is the time and effort it took to contact the credit reporting agencies.