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What You Must Consider When Filing For Bankruptcy

Many people think that bankruptcy will be the easiest way to relieve them of their debt problems, and they jump into it without considering everything that comes along with it. Yes, it may well relieve the debt problem, but it is not always easy, and it should certainly be used only as a last resort.

Even though the filing itself is relatively easy, the whole process – just like any other legal proceeding – could be a little painful. The reason is because you will have to convince a judge that your filing was absolutely necessary and you will have to expose all your financial history, leaving it wide open to objections by your creditors. And do not expect your creditors to just settle for 10 cents on the dollar, even though it may happen.

Filing for bankruptcy is a drastic step, and you have to consider very carefully the long term impacts it will have in your life.

You will lose any credit cards that have outstanding balances, and those that you have no balance on may choose to close your accounts. You will also find it near impossible to get a home loan or other types of loan. And if a loan is to be approved, it will be at an incredibly high interest rate.

Keep in mind, for example, that many debts are not covered when you file for bankruptcy protection. For example student loans, back taxes within the past three years and other debts are generally exempt and not covered by bankruptcy protection.

This situation will last for ten years, and during these ten years you will need to maintain an excellent credit record if you want to regain the banks trust. All interest rates will be higher since a bankruptcy is always regarded as the most negative criterion on a credit report. This applies for a new car loan (expect to pay thousands more during the life of the loan), department store cards (if they issue you one) and even a secure credit card.

Not only will you suffer financially, but you may also be required to forfeit real assets like jewelry, boat or Recreational Vehicle, depending on when they were acquired. Some states however make an exception for your car and your primary residence. If you own rentals, they may not be protected.

And you also have to consider that the process can get very expensive, more so if you use an attorney. The procedure is not free: the fees that Courts charge have gone up in the last few years.

On the upside, you will get relief from the stress caused by your debt, and your creditor’s phone calls will stop once they are notified. Your wages will not be garnished and any foreclosure action will be stopped. By taking action sooner rather than later, you will start to build a new credit history that can be better than the past one.

And this can be an advantage since you won’t have access to credit cards. It is of utmost importance that you change your habits and be extremely careful next time.

Even though people file for bankruptcy for different reasons (many of which are unpredictable i.e. loss of job, medical bills, etc) it can be a wakeup call to change any bad money management habits we may have.

Insurance – Tool for Personal Finance Planning

Financial planning is must for every individual. When we start saving money for our goals, there is always a fear of the unknown. We can’t predict the future. So just by doing investments we cannot ensure that all is well. Buying insurance is a good way to protect yourself, your family & assets. Learning some basics of insurance will help you invest wisely.

You are working hard every day to earn a decent living standard. Based upon your monthly expenses, you can do some savings. You do financial planning based on your current health & wealth status. But with time as your age increases health problems can also surround you. It may be major surgery, a fracture or an infectious disease. Every medical problem poses a hurdle in your path. In such conditions having an insurance policy is a big advantage, not only it provides financial support in a crisis but it also gives a sense of security.

Insurance plans can be different types like endowment plans or unit linked plans. All these have their importance. Selection of a proper plan is not easy. You may have to take the help of an investment expert. For example the amount of life cover required is not same for all of us. It is calculated using parameters like your age, current assets, total liabilities, monthly income & number of family members. So, take proper advice to find out what is best for you. Insurance helps your personal finance in one more way by offering tax benefits.

Insurance policy is a contract between the insurer & policy owner. A fixed amount has to be paid by the policy owner either in lump sum or annually, which is called as premium. The premium is calculated on the basis of insurance cover required & the duration of insurance. Depending upon the term & conditions mentioned in the policy one has to pay the premium for certain years, known as premium paying term. If you fail to do so, the policy will be lapsed. The maturity value or sum assured is the amount guaranteed by the company in case of death of policy owner or when the policy term ends. The life cover may continue after the premium paying term, in some plans, till whole life.

Buying a policy is very easy nowadays. You can now buy them online. All leading insurance companies are offering this service. You can easily compare different plans & choose the perfect one. There are some other sites which provide you with insurance plans of different companies, you just have to submit some basic information about yourself & all the plans will be displayed in a tabular form.

To sum up, life insurance is an important tool when planning your personal finance. Due to availability of so many options in market choosing the right one is difficult. Take the help of a financial advisor if you are not sure about it. Live a happy & secured life!

Manage Your Debts Efficiently With The Debt Consolidation Loans

Are you feeling puzzled managing multiple debts against your name? Are you having nightmares about lenders standing at your door pestering you for repayment of their money?

If the answer to the above questions is ‘yes’, then it is definitely high time you start considering rearrangement of your finances.

Debt consolidation loans provide an effective means to repay all your pending multiple debts through a single loan amount. Thus, debt consolidation loans enable you to replace the pending debts with a single loan. It is definitely more easy and convenient to handle a single loan and a single lender than multiple loans and multiple lenders.

Debt consolidation loans have a longer repayment period. This helps to reduce the monthly instalments you pay. So, you can save a considerable amount of money each month with the debt consolidation loans, as compared to what you were previously paying for the various debts.

Usually, it is seen that people get into the trap of multiple debts due to the overuse of credit cards. A spendthrift person gets tempted by the gleam of ‘plastic’ money and do not realize that he is the one who needs to pay the ‘real’ money. Then, there are some genuine reasons due to which people suffer from the problem of multiple debts. For example, a person may be bed-ridden due to some illness or accident, as a result of which he might not have received the paycheck in full. This may lead to accumulation of debts owing to the inability to repay the monthly bills.
Whatever be the reason… now, there is no need to bear the brunt of unmanageable debts any longer.

Apply for Debt consolidation loans [] fast. A thorough research and online comparison of loan deals from various lenders will enable you to get a competitive deal.
Make sure that you make sincere efforts to repay the loan in time. This will not enable you to get rid of debts completely but also help you improve your credit rating.
So, do not delay. Bring order in the financial aspect of your life and enjoy a peaceful sleep.

The Credit Preview for Equipment Financing and Leasing

Many companies have been affected by the fluctuations in the economy the last couple of years. Sales would surge one month, completely go flat the next and it has been difficult for many of us to manage cash flow and the repayment of debt. Company and small business credit has taken a hit and damage has been done, yet we still push forward to improve our businesses and try to grow them into the future. The situation makes us hesitant to take on new debt or try to finance new equipment even though it is absolutely necessary if we are to survive. New equipment will allow us to offer the latest product or services or simply keep up with the growing market trends in our industries.

It’s time to apply for that new machine but we cringe at what the procedure might reveal. A solid solution which many progressive finance companies are offering is called the Credit Preview; it is a step which can take a lot of pain out of the application process. A preview doesn’t cost you anything and will provide valuable information on the condition of your company.

The Credit Preview entails taking your basic minimal business and financial information and reviewing it to determine if there is good potential for a finance approval without requiring all of your tax returns, financial statements, debt schedule, etc. It will save you time, stress and energy since the preview will offer quick feedback on the chances of getting approved. Finance companies understand it doesn’t make sense to dig out 2-3 years of financials if your business has no chance for the type of approval you’re wanting.

A standard Credit Preview only requires the following:

1) Credit Application – should be completely filled out, legible and be sure to sign

2) 3 months of current bank statements – all pages should be included since the underwriter is trying to determine the money coming into your business

3) Vendor Quote or Proposal detailing how much equipment, labor, etc. is involved. The underwriter wants to see how much “soft” costs like labor and consultation is part of the purchase as opposed to “hard” costs like equipment and machines.

That’s all that is needed. The Credit Preview process will provide a much better analysis than those online “quickie” finance credit reviews which only checks your credit score; the preview checks 8 different areas to get a true picture of where you stand and how to move forward. Even with damaged credit, at least you will know some of your alternatives.

The Evolution of Financing a Small Business

For years I have read the popular business magazines, all having so called experts write articles for entrepreneurs on how to finance their business. “The top 10 strategies for financing your start-up”, “How the SBA can help your small business”, “Personal credit is the key for entrepreneurs” and so on. In most cases I’m willing to bet those writing these articles are journalists that have never had a successful start-up. How can I come to that conclusion you may ask? Because of the bad advice they give.

Going to the SBA for a loan, using your retirement funds, tapping all your personal credit cards or giving up 75% of your idea to an investor are all ideas I have read from the popular magazines. The thing is, in every one of these cases you are using your personal credit and not separating you from your business. You are putting 100% of your credit and assets at risk.

I have worked with thousands of small business owners who have been very successful without the need to use their personal credit cards, retirement funds or fill out stacks of paperwork and wait months for a response from SBA backed banks. In fact I have seen entrepreneurs with access to hundreds of thousands of dollars without giving up a percentage of their company or having any of the money show up on a personal credit report. Sounds good right? Well, there is one catch. You will need to go through the evolution of financing your business. You can’t start at the end. This is the problem with most entrepreneurs. They want fast results and aren’t willing to wait. By taking the quick fix they give up ownership and put their personal credit at risk.

The evolution of business financing starts with a solid foundation for your business. A solid foundation is comprised of several parts. The first of which is structuring your business entity appropriately. I recommend to every entrepreneur that you use a Sub Chapter S-Corporation, C-Corporation or Limited Liability Company to operate the business. This is the first step in separating the business owner from the business. The next phase of building the solid foundation is to ensure the business is in compliance with the lending markets. Several business owners are surprised when I tell them most lenders we work with when reviewing a credit application will first call directory assistance to see if your phone number is listed. It’s a simple check, but it’s the first flag that will be raised for them if the business isn’t listed. Why would a lender finance a company that doesn’t want anyone to find them?

There are hundreds of other due diligence phases that a company must go through in order to ensure the owner and business are not considered “high-risk” for obtaining credit and financing. The more a business has in place to show that it is a real business the more likely a lender will grant credit to that company.

The second step in the evolution of small business financing is to define what the business does, what makes it unique and why it will be successful. The business owner must create a one-page “sales pitch” for the business, also referred to as an executive summary. The executive summary can be used when applying for credit, seeking investors and developing marketing campaigns.

Business owners need to keep in mind when seeking financing that the most important thing for a business is to produce a profit. Without revenue there will be no profit. Marketing the business will help produce the revenue and the executive summary will help create the marketing.

Third, a company must build a business credit report separate from the owner’s personal credit. By working with trade credit, the single largest source of lending in the entire world, a small business can tap into limitless leverage for buying goods and services they need to start, run and grow the company. The beautiful thing about trade credit is in many cases it’s free money. If a vendor grants terms of net 30, a business owner has the ability to use the vendors goods or services for 30 days without interest before they need to pay the vendor. The other wonderful part of trade credit is that there are companies offering products and services small business owners need who will report the credit to a business credit bureau. The reporting of the trade line will create a business credit profile separate from the personal credit of the business owner. Eventually the business will be able to access more and more credit under the business name only if it maintains a positive business credit score.

The more credit received under the business name the more likely other companies will grant that business credit. No one wants to be the first in line to grant a business $50,000 in credit, but if others already have they will be more inclined.

Fourth, is to use the owner’s positive personal credit score in combination with a positive business credit score as leverage for obtaining hundreds of thousands of dollars in unsecured lines of credit for the business. The key is to do this with lenders that don’t report the accounts to the personal credit bureaus but rather the business credit bureaus. Many banks offer business lines of credit and loans, however finding the right type of product from these banks can be tricky. A business owner needs to make sure the loan or credit line they apply for reports only to the business bureau.

By keeping business debt separated from the personal credit report, a business owner has the ability to keep their personal credit score high. The more a business owner uses their personal credit in the business, the lower the score will drop. Credit scores determine the ability to buy homes, rates on car insurance, and several other factors. Keeping a personal credit score above 720 is extremely helpful in the business owner’s personal and business life.

The fifth stage of the business financing evolution is to look at other alternative financing the business may be able to obtain. Leasing is one key area. Why use precious cash reserves to buy equipment or software when you can make a small monthly payment? In addition 100% of the payment on the lease is expensed.

The final stage deals with investors. The majority of investors don’t want to look at companies unless they have already progressed through the business evolution stages outlined above. Keep in mind that an investor is not just investing in a business they are investing in the business owner as well. If the business owner has tapped every available resource for credit and cash personally and never taken the time to establish business credit, financing or lease arrangements an investor will toss that company’s proposal in the garbage quickly.

Not every business owner will find themselves at the stage they need an investor. They may have a combination of enough cash-flow, credit and financing in place from the early stages that they won’t need additional capital. However, if a business needs to grow with the help of additional capital or financing there are two typical ways an investor will look at the deal.

The first is through debt financing and the second equity financing. Debt financing with an investor is where they provide a loan to the business in exchange for a pre-determined amount of interest. Equity financing is where an investor puts money into a business in exchange for ownership. There can also be a combination of debt and equity.

The majority of small business owners believe this is where they should start, with the investor. In reality this is the last place a business owner should look. Investors want to use their money to grow a business by having the money spent on revenue generating activities. The typical small business owner that goes to an investor says “I need a million dollars to start my business.” When asked what they’re going to use the money for they say, “start-up costs and payroll”. This is where the investor walks away. No investor wants to fund a project so the business owner can make payroll, buy office furniture, equipment or office supplies.

This is the perfect example of the evolution of business financing. The company starts out as an idea, then structure is put in place. Next, the business becomes real with licenses and a sign outside the building. Next, the business creates an identity with the right message. Then the business obtains trade credit that separates the personal and business credit in order to obtain larger lines of unsecured credit. All of which is used to build the infrastructure of the business without maxing out all the available credit for the business or business owner. Last, the business has the ability to seek investors because it has done everything required to create the solid foundation.

Simple Ways to Manage and to Limit Family and Personal Credit

Experienced shortage of money? Have difficulties in managing your credit? You are one of those who had trouble with their credit.

Credit is a byword everywhere because seldom can you find a person who do not have any form of credit. It is sometimes beneficial provided you know how to manage and to set limits to your personal debt, otherwise, you will be caught off-handed and experienced budget deficits and shortage of funds. This problem can only be solved through careful planning and management of one’s credit and finances.

Credit management implies a lot of things to companies and individuals alike. To some it
means the imposition of policies and rules aimed at mitigating and reducing the debt, while to others it means avoiding extending credit terms to bad debtors.

Despite the difference in meaning, it only means one thing, that is, the management of one’s finance to reduce and to manage personal debts. It takes a lot of motivation, dedication and courage to control one’s finances.

To regain financial stability, pay your debts and loans on time because your credit record is not only affected by the amount you pay, but also on how quickly you pay them. Most often, late payments of loans and credits had their associated interest fees, the greater the amount borrowed, the greater the interest once you defaulted on them. Good credit score is important in obtaining financing from banks and other financial institutions.

To control your monthly expenses, develop a budget scheme to save money and to set aside payments for outstanding bills. Prioritize payments for important items, like food, medications, education and gasoline. If you plan to have a vacation or a holiday, set aside money ahead of time. Most important of all, save money for emergencies.

Reduce your interest obligations by monitoring the interest rates of your credit cards, mortgages, personal loans. Make sure that interest rates are not above 12%, otherwise negotiate with your creditor to get it lowered. If it hesitates to lower the rate, transfer to another financial institution that has lower rate. Monitor and pay your interest obligation monthly.

When paying for interest rates, pay first those with highest interest rate and largest debtor because it will give you best satisfaction.

Before applying and committing for a loan, know and understand the credit agreement, interest rate and terms offered. Select those that has the smallest term and fixed interest rates.

If you fail to pay your loans and creditors hunt you, take time to call them and ask for extension or credit workout scheme. Majority of them want to work with you to get things sorted out, rather than bring the matter to court.

If you have defaulted on your credit cards, call the credit card company and ask for their assistance. Ask them and negotiate to reduce your interest rate. Some firms are willing to decrease the interest rates because they do not want you to default on your loan and they want to get the principal amount back.

If all steps failed, always make it a point to consider debt consolidation or consumer credit counseling agencies your last resort. Some of these companies can help you by offering debt reduction plans to help you pay your debts.

How To Deal With Your Small Business Finance Needs

One of the most challenging and time-consuming tasks for any business owner is to finance even a small business. While it is considered an essential part of running and expanding a business, it should be done properly and carefully so that it won’t hinder the establishment of the business as a whole. Small business finance is basically the connection between cash, value, and risk. Maintaining the balance of these three factors will ensure the good financial health of your business.

The first step that a business owner needs to take is to come up with a business plan as well as a loan system which comes with a well structured strategic plan. Doing this will certainly result to concrete and sound finances. It is of necessity that prior to your financing a business, you figure out what exactly your needs are in terms of small business finance.

In trying to determine your business’ financing requirements, keep in mind that you have to have a positive mindset. As the owner of the business, you should be confident enough in your own business that you will be willing to invest as much as 10% of your small business finance needs from your own pocket. The other 30% of the financing can be from venture capital or other private investors.

In terms of the private equity aspect of your business, you would want it to be around 30 to 40 percent equity share in your company for a period of at least three years and a maximum of five years. But of course, this will still be dependent on the value of your small business along with the risk involved. Maintaining this equity component in your company will assure you majority ownership of the business. As a result, you will be able to leverage the other 60 percent of your small business finance needs.

It will also be easier to satisfy the remaining financing needs of your growing business. You may opt to get the rest from a long-term debt, inventory finance, short-term working capital, and equipment finance. Remember also that as long as you have a steady cash position in the business, many financial institutions will be more than willing to lend you money. In this respect also, it is recommended that you get an expert commercial loan broker who will do the selection of your financing options. This is also a crucial stage as you would want to find the most appropriate financing offer to meet all your small business finance requirements.

These are just some of the important considerations that need to be taken when financing a small business. There are, however, so many business owners who do not pay enough attention to these things unless their business is in crisis. As a business owner, what you should keep in mind always is how you can grow and expand. Therefore, have a small business finance plan as early as possible so that you can make sure that every financial aspect of your business is in good condition.

Buying A Car With Bankruptcy Without Giving Up Your Dignity

There are special financing car dealerships and auto brokers who can work with you to get you into your next vehicle, despite a recent bankruptcy. Here are a few things to help you know that you are working with a quality special financing dealership when buying a car with bankruptcy.

Bankruptcy and all of the emotions that go with the process of filing can leave you feeling hopeless and defeated. Begin by realizing these are simply thoughts of where you are right now. This is not a permanent situation. A different approach may be to look at this as a fresh new beginning. Your financial slate has been wiped clean. There are quality special financing dealerships that are eager to help you buy a car after bankruptcy.

Here are some tips on how to spot a special finance dealership or auto broker that will gratefully assist you with your fresh new beginning.

Begin by asking friends and relatives if they know of anyone that helps people buy a car with bankruptcy. This may be your best resource. You can also check online for dealers in your area.

After locating a couple resources, pay a visit to the dealership and ask to speak with the special finance department. Notice how the person who greeted you has treated you. Did you feel welcome, even after speaking the term “special financing”?

You should feel as if you have been treated with respect and dignity right from the start. If instead you are feeling as if the dealership personnel are looking down on you, or if you feel that you are being ignored, don’t be afraid to walk away and find another dealership that treats you better.

There are quality special finance departments available and this will make for a much more pleasant experience. In addition, this will help ease your concerns. You can then feel confident that you will get the best deal while buying a car with bankruptcy.

Once you feel comfortable with the dealer, ask the special finance salesperson to see some of the vehicles that would be available with your circumstances. You want to see that the dealership is putting you in a quality used car rather than an old, run down jalopy. Make sure the car has been safety inspected and get the history report for the vehicle. Feeling confident that the car will remain in good condition through the length of the loan is an important step.

Once you have seen the quality of the cars, sit down with the dealership and provide them with the information they need to begin working a deal to help you when buying a car with bankruptcy. They will want to see check stubs to prove that you have a steady income. In addition they will want to see proof of residency and bringing along a couple utility bills will provide this proof. You will need a current driver’s license along with proof of insurance. In addition, they may ask for references.

Now, watch the dealership work their magic. A quality special finance dealership can get you pre-qualified to help make the process go smoothly and more quickly. Once you are pre-qualified, you should be in a new vehicle within about 2 hour’s time!

When buying a car while in bankruptcy, finding a quality special finance dealership will relieve stress and give you the greatest chance at a fresh new beginning.

Financing Loan – For What You Really Want

When talking of financing, it means you borrow money to pay for something that is valuable or has value. So a financing loan can be used by a person borrows money to financial institutional or bank. There are many types of loans, there is car or auto financing, home financing, business financing, student financing, etc.

When you are looking for financial institution to have your loan, it’s more important that you get the right reputable lending institution that will give you an access to a suitable loan. Every lending or financial institution has different terms in payments and has different interest rate as well.

The most common loan is the car, the business loan and student’s loan. For businesses, they might have financing loan to expand their businesses or need more funding to their capital. People who want to have a car can also avail the financing loan as well or people wants to have a house of their own. And if you want to go on with your study and lack of money, you can also avail this type of loan.

Financing loan has a higher interest rate compare to regular loans and one must be aware of that although there are some that offer low interest rate but that financial institution is you need find. That is why the best way to get the lowest interest rates on loans to shop around, get quotes and compare.

You can also find loans online through the internet where in you can get a free quote with easy access and convenient. Remember that in finding the reputable financial institution, one should be careful because even in the internet, there is still scammer. Shopping online is good for window shopping only and asks for free quotes since you cannot see personally the person online unlike when you go to their office.

Borrowing for small amount of money, financing loan is not appropriate since you can borrow that to your relatives or friend without interest. What is important is that you have to pay what you borrow in due time. Going to financing loan for just small amount of money is not practical at all since you have to pay for the high interest rate.

What is important when you go to financing loan, be sure you have a good credit record for them to accommodate you. Loan is good if you get profit from it and this is good for businesses and as well for home loan. Good planning is needed when you want to have a financing loan. Study it well and have some idea before getting a loan.

Most of the financing loan, they ask for an asset or collateral to be sure that if ever you cannot pay your loan, they have something to pull out and sell it to gain back the money you borrow. To borrow is easy but to pay back is hard since you don’t know what will be your future takes. So think it over wisely before getting a loan.

Think why other financial institution accept bad credit rating to have loan from them, it’s because the profit they will get is bigger, aside from the high interest rate, if you cannot pay on expiry date, they have to pull the asset which is the collateral and they have the power to do that. That is why one should read carefully the term and conditions before signing.

Small Business Finance Success Improves With Realistic Options

The goal of being realistic when seeking new commercial loans and working capital financing will help commercial borrowers avoid a number of commercial finance problems. With proper preparation business owners should be in a better position to obtain new financing despite the difficult challenges impacting most working capital loans and small business financing. Nevertheless it should be anticipated that terms of financing will be different from prior commercial financing. Because of recent commercial lending difficulties, business owners actively assessing the most effective options for their small business finance decisions are likely to find the smoothest path to business loan success.

In view of volatile conditions which have recently impacted credit markets, this will not be a simple task. A very common example of the problem is illustrated by how much misinformation and confusion there has been about business financing and working capital availability. Getting more accurate information about what is realistically possible can be one of the most difficult challenges for commercial borrowers.

When seeking to identify realistic choices in a confusing working capital management climate, a number of harsh realities must be confronted by all small business owners. For most current commercial financing decisions by business owners, there are several major factors to anticipate. In the first example, additional small business loan collateral is being requested by most commercial lenders. Second, many regional and local banks have discontinued lending for business financing and working capital. In a third example, businesses which are not currently profitable or not current in their debt payments will have extensive difficulties. Fourth, business construction funding currently is very limited in most areas. In a fifth example, lenders are eliminating unsecured business lines of credit for most small business owners.

Despite the new business financing limitations just noted, there are practical working capital options for small business owners to consider. An increasingly effective commercial financing option in the midst of an uncertain economy is a merchant cash advance program based on credit card processing activity. Even though this commercial funding option has been available for a few years, it has not been used by most small businesses. For most businesses which accept credit cards, merchant cash advances should be evaluated as an important tool for improving business cash flow. Small business owners wanting to pursue this financing option should consult a business financing expert who is knowledgeable about this working capital management approach as well as other small business loans.

Even though working capital loans are not as widely available as they were just a few months ago, this kind of small business financing is still in fact obtainable. Since some of the largest providers have stopped making these business loans, the main change for business borrowers is the likelihood that they will be dealing with a different commercial lender. Small business owners will benefit from finding an experienced and candid business financing expert to assist in evaluating realistic options because the most effective working capital financing providers are not aggressively marketing this capability.

As stressed above, when making commercial financing decisions it is becoming increasingly important for business owners to first determine their effective business finance funding options. Because of recent volatility in financial markets, this task is likely to be much more difficult than most commercial borrowers realize. It is advisable to explore commercial finance options that might be necessary if economic conditions change even further even for business owners who are satisfied with their current working capital financing arrangements. The use of Plan B contingency financing is an important tool to assist commercial borrowers in this process.