Study Investment » Finance

Simple Ways to Save

admin — Thu, 02 Feb 2012 11:28:50 +0000

Who couldn’t use a few extra dollars in the bank? Chances are you could be saving more by practicing a few penny pinching ideas. Check out the following list and see which ideas can help you get a little more bang for your buck.

INSURANCE

When you receive your renewal notice it is time to begin comparison shopping. Spend an hour researching insurance rates. Ask your friends from whom they get their insurance. When I took some time to shop auto insurance I reduced my annual rate by $600.00 and retained similar coverage. If you have more than one policy, go through the same agent to receive a multiple-policy holder discount.

AUTO

Keep up with routine maintenance on your car such as oil changes and tune ups. This can avoid costly repairs down the road.

UTILITIES

Keep in mind that when you lower your thermostat by one degree during heating season– you will save around 2% on your bill.

CHECKS

Order your checks through the mail instead of through a bank. My last order from a bank cost $13.50 for plain yellow checks. I got an abstract design on from a mail order company for around $5.00. Current offers a good variety of checks. You can request their check brochure at (800)-426-0822

CONTACT LENSES

Ordering contact lenses from a direct company can be less expensive than ordering through an optician. Call Contact Lens Connection at (800)-695-LENS for more details. But don’t forget to still see your eye doctor regularly for check-up visits.

REFILL PLEASE!

For common household cleaners use refills when available. This way you will not pay for packaging each time you make a purchase.

SKIP THE SODA!

Get rid of soda in your house. Instead find a mixed beverage for your children like Kool-Aid, Tang, or Crystal Light. This will save on soda bills and dentist bills, too! If soda is a must, buy it in liter bottles. It is cheaper and avoids the waste of having leftover soda in cans. If canned soda is preferred, find a store-brand your family likes. These can usually be purchased for .10-.14 cents per can.

GROCERY SHOPPING

When shopping, be armed with a list and don’t stray from it! It also helps to shop the edge of the supermarket where the fresh food and less expensive food tends to be. It is the middle aisles that contain all those items that can magically leap into your cart.

SAVING IDEAS Never spend your change. Use a coffee tin and deposit all your change into it. Let all your change accumulate for a year. Use the money to get something nice for yourself, or add to it for several years and take your children on a special vacation. Pay $5 extra on your electric, phone, water , cable, and gas bills. Do this January through November. Then relax in December to a low-bill month!

The Change Your Life Challenge
http://www.changeyourlifechallenge.com
Take control of your home, finances, relationships, clutter, time-managmenet and more with this 70 Day Program. Sign up for the free Challenge Weekly Newsletter and the motivational daily Good Morning.

Building A Home Want To Ask A Builder The Right Questions – Not The Dumb Ones!

admin — Thu, 26 Jan 2012 17:20:21 +0000

These are real builder questions that I got from readers of my e-book, “Residential Development Made Easy” with answers from a major USA Master Builder operating in 48 States.

Question 1.

My wife and I are planning a new home. We intend approaching a builder or two in this area, and I plan on asking them these questions.

My wife is very adept at planning and researching. Under what circumstances do you recommend we hire an architect? And Why or why not? (This is not a loaded question. I am not an architect
and neither is my brother-in-law. We would prefer to construct without hiring an architect.)

Reply

It would depend on your budget. Some architects in the US charge as much as 10% of the budget of a home to do the plans. Master Builders, as opposed to “Local Builder Bob,” don’t like to place their clients in a position of hiring an architect until they really need one.

The best advice our clients get is to prioritize their actions as follows:

First: Get the loan;

Second: Get the land;

Third: Get the Interior Designer;

Forth: Get the architect.

In our case, we have in-house architects and structural engineers.

It is best to hire an Interior Designer (ASID) and have them work with you to design the floor plan, which is uniquely suited for how you and your family use space and the style you like.

Armed with this floor plan you would then send it to us and we would create your architect blueprints from it.

Blueprints are part of the quote we provide our clients. This way they don’t have ‘Sticker Shock’ from a local architect.

Question 2.

How much price and quality research re materials can we expect our builder to do or to
have done?

Reply

This depends on the builder you hire. For the most part, you can’t expect too much. Most builders work in their comfort zone.

They use materials they’re used to working with. They usually won’t try something else unless insisted upon by the home buyer or developer. And, then they usually hire an outside source to do this.

As Master Builders, we use current technology and one of the reasons why we are both profitable and successful is that we keep abreast to new technology and want our buyers and developers to have this benefit in their homes.

Question 3.

Is it reasonable for us to ask our builder to identify his subcontractors and allow us to talk with the primary subs before we enter into a contract with him (and after)?

Reply

It may appear to be reasonable from your point of view, but, not very realistic. Subs come in and out of a job site. If one is not available another one is called in.

Once you have signed a Contract with a builder, he is your ‘one point of contact.’ The subcontractors are his subs – not yours. Remember you have engaged him for his building management expertise to complete the job on time and on cost.

That means he must have full control and so by you talking to the subs directly you are creating confusion. You can’t have two bosses on a job.

Confusion costs you more money. When you or your wife talk to a sub, you are not engaged in a social conversation. Let’s say you made an innocent comment about some aspect of the subs work – like you regret picking those tiles in the bathroom and have seen some nicer ones. That is all you said!

Can you see how a sub could use this against the builder when asked why he hasn’t finished the bathroom yet. “Well the client told me two days ago that they were changing the tiles to another type.” It doesn’t matter that you did not say that – but it caused confusion and delayed the job by at least two days or more.

Instead of wanting access to the subs, with whom you have no expertise, you should concentrate on ensuring the builder has the proper permits and insurance for building. Especially for workman’s comp and for liability.

Few clients realize that they can be held accountable, if the builder doesn’t have the correct insurance.

Let’s say that a child comes on to the site after the builder has left for the day. Decides to climb to the roof and jump. Guess who’s liable? Check the references of others clients he’s built for.

A Final point on access to subcontractors.

Many house building clients have very poor spatial ability and cannot imagine an overview of the space being designed for them – they just cannot imagine the finished house, never mind what the finished colors and tiles look like.

Because of this, they feel the need to be able to make changes at any stage of the project. This is what is behind this question of being able to speak to the subs. You can make changes to your house design at any time as long as you realize that each change will cost you heaps and blow your budget sky high.

To make these changes you ask the architect to request a cost estimate from the builder for each change. You then can decide if you can afford it or not. If your request is made at the worst possible (most expensive) time, you will be told that as well.

What’s the answer to all this? Make all the decisions about what you want and have them included in your
plans and specifications.

Question 4.

What does a builder, expect the homeowner to do (other than to pay you as and when agreed).

Reply

A builder expects the home buyer to be reasonable and realistic in their expectations. The time you spend in planning and thinking about what you want in you home is worth real money to you. If you are not good at planning, an Interior Designer will be critical to your final happiness.

If you can’t make up your mind on the important aspects of the design, go and inspect examples of what you do like and get the Interior Designer to incorporate what you want in the plan.

The biggest problems that most builders run into is home buyer who change what has been agreed to or is unrealistic in what they want. This is why we have our home buyers sit down with an
Interior Designer.

The ASID can sit down with you and help you visualize exactly what you want and help you make any compromises
you may have to make.

It is very expensive to make changes during a project. Let’s say that you wanted a 17×20 kitchen. Sounds like a big kitchen.
Probably too big. However, once the cabinets and appliances start coming in you realize that it’s too small and want the kitchen to be bigger.

This may cost you an extra $50k to make those changes. You can save yourself a small fortune by first working with ASID on floor space, storage, placement, design, and style.

Author & $1.2 Billion Developer, Colm Dillon, Has Written The Best Selling ‘How-To’ E-book, “Residential Development Made Easy,” With Readers In All States Of The USA, Canada, Australia, New Zealand, UK, Ireland and 79 Other Countries. His Independent Web Site is:
http://www.realestatedevelopmentcoach.com/ez

Empty Nesters Flock To Inner City

admin — Tue, 24 Jan 2012 23:11:00 +0000

Babyboomers whose children have left home, commonly known as “empty-nesters” are buying inner city apartments in record numbers.

Director of Acton Special Projects, Marc Drexel says the trend is towards quality rather than mass developments.

“The empty-nest market is growing and expanding with people wanting to reward themselves with a quality lifestyle property”.

Typically this group of buyers is seeking 2 big bedrooms, rather than 3 small ones with generous open plan living areas. These developments often include lifestyle features such as a gym, coffee shop, resident caretaker and even a rooftop library!

Drexel says Acton has 15 different developments under way at the moment worth in excess of $500 million with prices for individual apartments ranging from the low $200,000 mark to over a million dollars.

“The major inner city renewal has spurred the market on,” he said.

With this growth many investors are also speculating by purchasing “off the plan”. A 2.5 % depreciation against the structural cost of the building is an incentive and savings can be increased to between 5 and 10 % through discounts offered by the developer.

But Drexel also warns “be careful, selective and look for a point of difference, something unique such as location or architectural integrity so it stands out from other projects”.

Drexel believes negative gearing is no longer popular with a new trend towards “neutral gearing”.

This trend is supported by Trevor Hoddy a partner with West Perth accountants, HLB Mann Judd.

“We don’t see at lot of negative gearing compared to five years ago and we’re seeing more a move into managed funds, such as property trusts, where there is greater liquidity and less risk.”

He says the reason for this is low inflation, generating poor capital growth and soft rental returns.

When considering investing into property consider these 10 Tips

Determine whether a property investment fits your financial goals, objectives and personal asset profile.

Look at the extent of your gearing (ratio of debt to equity or assets) compared to your other financial resources. If you are spending $300,000 – $400,000 on a property – how big is your debt? How much risk is there compared to your other financial assets?

Look at what income your asset will need to generate to service the debt.

Determine if there any shortfalls between the income generated and the cost of servicing the loan. With negative gearing the shortfall between the income generated and the interest costs on borrowing and the maintenance costs on the asset are serviced from other income sources. You need to look at whether you have the resources from other income, either investments or salary, to maintain or pickup this difference. The benefits of negative gearing are that this shortfall can be offset against other income, reducing tax liabilities.

Assume the property is vacant. What impact will this have on your cash flow?

If you’ve borrowed money now at 9 or 10 %, what happens if this increases by 1 or 2 %? With an increase in interest rates do you have the ability to service this extra cost?

Negative gearing into investments is only effective if the long-term investment is linked to income and capital growth (the growth in the value of the asset). This is influenced by a combination of inflation and net after tax benefits. For example a $20,000 negatively geared tax deduction will yield a $10,000 tax benefit. This is the real cost, so each year the value of the investment must increase by this amount plus inflation. There is also a capital gain tax is on top of this. If growth is less than inflation then you’re going backwards.

Ask yourself are you comfortable with the level of debt? Consider whether this matches your psychological risk profile.

How liquid is your investment? Put simply, how soon can you turn your investment into cash? Often property may take some time to sell and a more liquid option is to invest in listed or unlisted property trusts.

Have a solid financial plan and seek the help of an expert or a registered financial planner.

Thomas Murrell MBA CSP is an international business speaker, consultant and award-winning broadcaster. Media Motivators is his regular electronic magazine read by 7,000 professionals in 15 different countries.

You can subscribe by visiting http://www.8mmedia.com. Thomas can be contacted directly at +6189388 6888 and is available to speak to your conference, seminar or event. Visit Tom’s blog at http://www.8mmedia.blogspot.com.

Home Equity Is it Time to Cash Out and Move

admin — Mon, 16 Jan 2012 22:32:11 +0000

During the last five years, home prices have increased nationwide. In some parts of the country, notably California, home prices have doubled or even tripled. The median price of a home in the Los Angeles area is now nearly $450,000 and in the San Francisco area, the price is approaching $600,000. As the economy continues to improve, the price of housing continues to rise in California and elsewhere. Many people who have owned their homes for more than three years are suddenly finding themselves with hundreds of thousands of dollars in equity. Of course, equity is only a theoretical gain, and if the price of housing goes down, equity can go away. You only get to keep your equity as cash if you sell your home. Many homeowners are doing just that.

Home equity loans are increasingly popular these days, and many people with large amounts of equity in their homes are borrowing against it and using the money for home improvements, dream vacations or other luxury items. Others are simply cashing out and moving elsewhere. While prices on both coasts are rising at a breathtaking rate, price increases in most of the country are still more modest. A homeowner in California who bought a home five years ago for $200,000 may have a home worth $500,000 today. If that homeowner were to sell that home and move to Texas, or Iowa or even parts of Florida, he or she could buy a comparable or even larger home, pay cash, and probably keep a healthy profit to invest. For most Americans, the equity in their home is their single largest asset. Examining that equity to see if it can be used more wisely would be a sound move, particularly as real estate experts warn of a housing “bubble” that may soon reduce prices to more realistic levels. Should this “correction” in the market take place, homeowner equity could be seriously reduced.

Obviously, selling a home and moving just to pocket the equity is not something that suits everyone. While it may make sense from a financial standpoint, it will mean finding a new employer, finding a new home, finding new friends and moving children to new schools and friends. Anyone considering such a move would be well advised to carefully consider all of the ramifications of simply picking up and moving. On the other hand, the opportunity to extract several hundred thousand dollars in cash from a home is a rare one, and investing it wisely could go a long way towards financing a better lifestyle or a more comfortable retirement. Homeowners should be aware that there might be capital gains taxes to be paid on the sale of a home. Those considering selling their home to extract their equity would probably benefit from a consultation with a financial advisor.

Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a Website devoted to debt consolidation information and HomeEquityHelp.net, a site devoted to information on home equity loans.

Small Business Tax Credit – Americans with Disabilities Act

admin — Mon, 09 Jan 2012 19:10:26 +0000

Many small businesses complain when confronted with the expense of complying with the Americans with Disabilities Act. Most do not realize that there are a number of tax incentives available to offset the costs. Importantly, one tax incentive comes in the form of a tax credit, which is far more valuable than a tax deduction when it comes to creating tax savings.

Disable Access Tax Credit

If you make your small business accessible to persons with disabilities, you can take an annual tax credit. Your business is eligible if you earned one million or less the previous year or had 30 or fewer employees. If you meet this test, you can claim a tax credit of 50 percent of your expenditures to a maximum of $5,000. Since this is a tax credit, it is deducted from your total tax liability.

To claim this tax credit your expenditures must be paid or incurred to enable your business to comply with the Americans with Disabilities Act. Expenditures might include:

1. Purchase of adaptive equipment or modification of equipment;

2. Production of print materials in alternate formats such as Braille or audio; and

3. Sign language interpreters for employees or customers.

Modifications to buildings or offices also qualify as long as two criteria are met. First, the modifications cannot be construction of something new. Second, the building must have been in service prior to November 5, 1990.

Barrier Removal Tax Deduction

All businesses can take a tax deduction for expenditures incurred to remove physical, structural or transportation barriers for disabled individuals in the work place. This tax deduction carries no restrictions in regard to revenues earned or number of employees. Businesses may claim up to $15,000 a year as a tax deduction. Expenditure amounts exceeding this amount may also be claimed, but are subject to depreciation calculations.

To claim the barrier removal tax deduction, your expenditures must be related to making a facility or vehicle accessible to disabled persons. Examples include:

1. Providing ramps and curb cuts;

2. Making restrooms accessible to persons in wheelchairs; and

3. Expanding the width of sidewalks to at least 48 inches.

Significant Tax Break

Small business owners can double their tax saving pleasure by claiming both of these tax incentives in the same tax year. If a small business spent $20,000 creating wheelchair access to an office, it could take a $5,000 tax credit and a $15,000 tax deduction.

These tax incentives are in place to significantly reduce the burden of complying with the Americans with Disabilities Act. If you failed to claim the credit or deduction during the last three tax filing years, you should file amended tax returns to get a refund.

Richard Chapo is CEO of http://www.businesstaxrecovery.com – Obtaining tax refunds for small businesses by finding overlooked tax deductions and credits through a free tax return review.

Structured Settlement Factoring

admin — Fri, 06 Jan 2012 00:07:14 +0000

Have you received a structured settlement recently? A structured settlement can be a good thing if you have been a victim of malfeasance, have been severely injured or can no longer physically work. Structured settlements will help you pay bills. But what do you do if you have a structured settlement, which is coming your way and you really have decided that you might prefer to have the cash instead? Well, if this is the case you are in luck because there are companies, which will buy your structured settlement for a discounted price?

This is similar to factoring which is used in businesses, which need to maintain their cash flows. They can sell accounts receivables to another company as an investment and get the money that is owed to them in advance. For instance let’s say a company, which does janitorial services for a government agency, which are notoriously slow to pay and that government agency owes them $30,000 for services already completed? A factoring company will buy that check which is in the mail so to speak for $25,500 and give the money to the company now. You may say well that is 15% of the $30,000; yes it is, but if a small business does not get the money in time they could go out of business because the government is so slow to pay on their contract. Going out of business is not a good thing and if it happens all the money invested and time to build the business is out the window.

Let us say you have a structured settlement and you cash out of the deal using the same type of company? They will get the structured settlement money each month istead of you, but you will have all the money up front minus a 10-15% discount on the total money you would have received. You can then use this money for whatever you want. Such as investing, buying a house or buying new car, plasma TV and other things humans want to make them happy. You see?

“Lance Winslow” – If you have innovative thoughts and unique perspectives, come think with Lance; www.WorldThinkTank.net/wttbbs

Photo Checks A Great Alternative in Checking

admin — Sat, 31 Dec 2011 08:31:23 +0000

It’s the little things in life that make it interesting. Everyday life can be so boring at times. To make the ordinary extraordinary takes time to explore and to discover. Fortunately, there are some wonderful places online to personalize those ordinary items and make them the pride of you day.

We all have checking accounts, many more than one. Most of us buy checks through three different means: the local bank, through the mail, and on the internet. Internet shopping is increasing, due in part to more confidence, and just more people using the web in general.

There is a new alternative in check supplies that has begun a new trend. Photo checks are increasingly popular among many markets. It’s a way to personalize checking without having to pick someone else’s design. They are only pennies more expensive than the usual choices, and they come out just perfect.

Here’s what happens. Go to your favorite checks supply website and look for the photo checks option. It should be on the home page. You’ll go through the process of ordering the quantities, and all that same old stuff. Then, you’ll get to upload your jpeg photo that you took with your digital camera or retrieved from a scanner.

In a week or two, the new checks will arrive the same as they always have. But this time, your personal photograph will adorn them. What photos will you choose?

Family. Keep them close to your heart and get the chance to share them with the rest of the world.
Personal photo. Use the service as a security measure. Pretty much any jpeg design will work, and they’ll have some ideas for you.
Man’s best friend. Why have someone else’s dog on your checks?
A picturesque scene. A photo from your vacation or honeymoon spot.
A digital design. As long as it is in JPEG form, you can create your own graphic design. Spread your artwork around.

These are obviously only a few of the ideas that might enter into your head with the option of photo checks. Use one photo now and select another for the next order. To get the most out of your checking account, get the best in personal checks.

Robb Ksiazek is an author and publisher for Checks-4U.com. He has researched and written about the little things that make a difference in the paper supply industry, from personal and business checks to envelopes and address labels. Turn the ordinary into extraordinary.

Why We Are Never Satisfied with What We Have

admin — Wed, 28 Dec 2011 18:08:25 +0000

I have to admit, I do it too. I complain. Seek better. Complain again. Ridiculous cycle. It’s more of a condition really. A humanity disease, I think we are born with it. It is almost as physical and useful as a regular appendage. Don’t get me wrong, being dissatisfied with here, has got us all to a lot of great theres. Otherwise America would still be in dreary old England and we wouldn’t have the 4th of July.

Most progress has something to do with wanting more, better, different. But it isn’t always good. People jump from relationship to relationship, place to place seeking what they didn’t find in the previous opportunity. It’s worth considering, for a moment, that maybe we don’t take full advantage of the opportunities that exist, right where we are.

Financially, we are always striving for more. No matter how big the raise, somehow we are still always just scraping by. A very particular group of dissatisfied individuals resides in the settlement recipient community. Those are the people who are receiving payments spread out over time. Impatient for the money, sometimes justifiably so, they cash in their future payments to get their money sooner. So instead of receiving the regular payments spread out over time, they choose to accelerate their payout. Of course, the reason is they think it would be better that way.

It isn’t always better to unstructure your payments. Just like it’s not always better to get a new car, move to a new place, and get a new love interest. There is a healthy time, motivation, and method for improving your situation, be it financial or otherwise. Consider carefully, take a moment and consider, if the way the things are, might not be good enough.

Jason Rigler
“Settlement Advocate” and consultant for Prosperity Partners Customer Service Department.

If All Things Are Possible, Why Can’t I Balance My Checkbook

admin — Tue, 27 Dec 2011 12:32:22 +0000

For me, the most terrible time of each month is the day our bank statement comes. We commonly call it BSS (Bank Statement Syndrome). I don’t know why it is, but I have trouble getting the parsonage checkbook to balance with the monthly bank statement.

That ominous document intimidates me every time it arrives. After all, the bank’s business is keeping track of accounts. They have hundreds, maybe thousands of accounts and I have just one. On the surface, it seems a rather simple thing for me to keep our checking account up to date, but I assure you, it is not. Every time I try, I lose interest.

Keeping our checkbook accurately balanced is almost like a circus balancing act; everything is up in the air. No matter how often I add those figures, I never get the same result twice. I have resorted to adding up the figures at least three times and then take the average. So far, I’ve been batting a .195 and have been dropped by the major league, which has lost interest in my career. This may satisfy my conscience but it does little to appease the accounting department of my friendly banking institution.

The thing flustering me more than anything else are those fees. The average bank has more fees than a West Virginia hound dog has fleas. Everything I turn around there is another fee. (I need to stop turning around.) Somebody needs to invent a fee powder.

Each bank must employ a stable of employees whose only job is to dream up these fees. How else can you explain it? These fees are creative enough to cover every aspect of a person’s wallet, retroactive three generations back.

To open an account there is a fee. Each account carries a monthly maintenance fee. I have been paying this monthly maintenance fee for several years and I have yet to see someone from the bank come out and mow my lawn. What is this maintenance fee? What are they maintaining? They certainly are not maintaining my checkbook. With all the fees I am paying, I would expect someone from the bank come to my house, sit around my table, and help me balance my checkbook. I would supply the coffee and donuts -for a small fee of course.

Another thing I do not understand is the ATM fee. Why do I have to pay money to the bank to get my money out of the bank? Whose money is it anyway?

I think banks offer monthly bonuses to the employee who comes up with the most creative fee for that month to impose on its customers. Fe?Fi?Fo?Fum all those bank fees are dumb.

Once upon a time and far far away, banks would bribe customers with toasters or umbrellas to open accounts with them. Those very days are over, you can be sure. Now, I’m the one bribing the bank to keep my account with them.

Last week I slipped the cashier the usual quarter and asked her to make sure my deposit got in my account, please. I do not know whether it is bribery or just a gamble and probably would do better with the Florida lottery.

I would not mind it so much if only my checkbook would occasionally agree with the bank statement. It takes a lot of effort on my part to keep some semblance of order in my checkbook. I am not always as successful as I would like. I make mistakes and sometimes they cost me. At my bank when I bounce a $3.75 check, I have to take a second mortgage out on my house to pay the fee.

I would close my account and transferred to another bank that there is a closing fee, a transfer fee and a fee that has no explanation whatsoever. Just a goodbye jester from my bank, one last chance for them to screw up my checking book.

Some people think God should do everything for them. All they have to do is sit back and enjoy themselves and God will do everything for them. A prevalent attitude about faith supports this erroneous notion. Someone once compared this idea of faith as putting a “nickel in the slot and pull the lever” and you get what you want.

Some things in my life only God can do and I need to understand what they are and allow Him to do them. However, some things in my life God expects me to do. God will never do these things for me. I must come to grips with this distinction. If I don’t, my life will be miserable.

Some people are sitting around waiting for God to do something He is expecting them to do. As they wait, they become frustrated and start accusing God of all sorts of sinister things.

Part of getting to know God is understanding this. What is my responsibility as a Christian? What does God expect from me?

An Old Testament verse puts much of this into perspective. After Solomon dedicated the Temple God responded by saying, “If my people, which are called by my name, shall humble themselves, and pray, and seek my face, and turn from their wicked ways; then will I hear from heaven, and will forgive their sin, and will heal their land” (2 Chronicles 7:14 KJV).

For the most part, many people are sitting around waiting for God to balance their checkbook when He has put the pencil in our hands.

Reverend Snyder is currently ministering at the “Family of God
Fellowship” in Ocala, Florida. More of his articles are available for reprint at his website: http://www.godspenman.com/
Rev. Snyder is available as a guest speaker. He writes a weekly
column and is the author of “You Can Always Tell a Pastor; But Not Very Much” available at: http://www.jamessnyderministries.com/

Bankruptcy and Your Credit

admin — Sun, 25 Dec 2011 13:07:30 +0000

Bankruptcy and credit are directly linked to one another. Credit is how many people run into trouble with their finances, and ironically how they remedy their financial problems at the same time. Credit availability and the encompassing pressure to maintain a good credit ranking will often allow lenders to form prejudices. Many times this can make be the difference between receiving, or being denied, a large loan.

When someone goes bankrupt several things take place. By filing for bankruptcy you acknowledge that you are not able to pay your debts and must be relieved from having to pay off your unsecured debts. Unfortunately, this relief from debt comes at a price. Declaring you are bankrupt makes you at risk to creditors. You are less likely to receive extended credit when you need it, and on top of that you will be charged extremely high interest rates.

Fortunately one of the best things about bankruptcy is its ability to restore your credit rating. By opening a high interest rate credit card and making regular payments for the first few years after bankruptcy, you will demonstrate that you are willing and able to make payments in a timely fashion. Eventually your rating will rise and you can have credit available next time you need it. This process can be somewhat long, but for those who are willing to work towards the ultimate goal of having good credit, it can be well worth it.

To learn more about understanding bankruptcy please visit the San Diego Bankruptcy Lawyers Chang and Diamond, APC at http://www.thebklawyers.com This article may be freely reprinted as long as this resource box and all links stay intact.