If all this has made you feel that you too might be in a similar boat here are a  few tips to help you plan your retirement better and ease in to the transition and ensure retirement security.

Retirement Guide – Tips To Help Secure Your Retirement

1. Set Your Retirement Date: By setting your retirement date, you will be able to zero in on a time frame and hence gauge whether your current savings are sufficient to last you and guarantee you a secure retirement. If this is the case you may be able to extend the date a little longer there by giving yourself a couple more years to boost your retirement savings. However if you feel that you are already in that position it wouldn’t make any sense in prolonging your retirement more than you would have to.
2. Place: Another important decission which you will need to consider where are you going to retire to? Are you going to stay in an unencumbered house, or are you going to downsize to a smaller place? Are you going to be carrying be a mortgage or will you be debt free? Are you going to move to a retirement village or relocate etc. These questions will also help you decipher the amount of money you will require in your retirement and ensure retirement security.
3. Insurance Options: One fact that all retirees must consider is getting long term care insurance. While experts suggest that getting this prior to the age of 65 is not good, prolonging it may mean that you develop a condition or suffer an illness that will disqualify you from getting this insurance. It is always advisable to consult an expert in the field prior to getting this insurance.
4. Debt: Most individuals like to enter their retirement phase debt free. In order to do this make sure that as you approach your retirement date you have paid out your outstanding credit card balances and any other looming debt that you have so you can enjoy a hassle free and secure retirement. Some individuals may also think it prudent to consult an attorney or bankruptcy expert with regard to these issues.
5. Budgeting: Once you have detailed the above it is always advisable to budget to ensure retirement security. Creating a budget will ensure that you have planned your retirement expenses and have an estimate as to what your spending should be through the years so as to ensure that you do not deplete your hard earned money all too quickly.
6. Checking Your Social Security Options and Estate Planning: Individuals can start drawing on their social security benefit payments by the age of 62. However, if you prolong this, it will ensure that your benefit checks are larger, thus guaranteeting you a more safe and secure retirement. While looking into your social security payments and benefits options, it may also be advisable to consider estate planning. If you have not made a will and a power of attorney then it might be time to make sure that these are in place to ease your affairs for your loved ones on your passing. If however you have already had these drawn up then it may help to have them reviewed.

There are a few simple steps that should help you plan your retirement out better and ensure a happy, peaceful and secure retirement.

References:

1. Retirement Advice – Wallet Pop
2. Plan Your Retirement – Social Security Online

Life After Bankruptcy: Chapter 7 vs Chapter 13

Consumers often get confused as to what the difference is between a Chapter 7 bankruptcy and a Chapter 13 bankruptcy. The difference is simple. In a chapter 7 bankruptcy the consumer pays absolutely nothing back prior to filing for bankruptcy and in a chapter 13 scenario the consumer attempts at paying back part of the debts owed. However, there is still uncertainty as to the effects and impacts of the each on individual credit reports. It however may interest you to know that it is possible to rebuild credit after bankruptcy and it is possible to get back on your two feet. However is is essential that you take the right steps.

Rebuild Credit After Bankruptcy

In order to rebuild credit after bankruptcy, you must work on your credit report in a systematic manner.Make an attempt towards obtaining credit after bankruptcy and it will help you a long way in improving your credit score after bankruptcy.

1. Obtain Your Credit Report: After being discharged from bankruptcy, it is advisable to obtain your credit score to gauge your credit score at the point in time. It may surprise you but clients have been known to emerge with credit scores of well in excess of 600 post their bankruptcy periods. Once you have your credit score you can charter a path for credit repair after bankruptcy. It may be beneficial to regularly obtain your free credit report on an annual or semi-annual basis to track your progress.
2. Make Your Repayments During The Bankruptcy Period: At times certain debts are not discharged with bankruptcy. The court may order you to keep making repayments on certain loans even after filing bankruptcy. These often include debts like federal debt or student loans etc. While in your bankruptcy period it is very important that you keep making these payments and make them on time and if possible make higher contributions.
3. Obtain Secured Credit: You will find that in your life after
   

   Obtaining New Credit Is Important After Bankruptcy

   bankruptcy, it is extremely difficult to obtain credit or credit cards due to a poor credit score after bankruptcy. Even if you do, they will be with very low spending limits and with relatively higher interest rates. The way around this issue is to obtain a secured line of credit loan or a secured credit card. What this means is that you will have to place your own funds as security equal to the line of credit or credit card. If you keep paying off your balance in full each month, at the end of a couple of years you should be able to obtain a regular credit card or line of credit. This is an excellent method to help you out with credit repair after bankruptcy.

4. Prepare A Budget: Once you have come out from your bankruptcy period it is important to learn from your mistakes. Prepare a budget and try to ensure that you are making higher contributions than your minimum loan repayments to help build your credit score after bankruptcy.
5. Obtain Short Small Amounts Of Credit: In your life after bankruptcy, it is important that you obtain small amounts of credit and pay them of as soon as possible. While living without debt is advisable, you cannot live completely on cash as that will not improve your credit score after bankruptcy. Obtaining small amounts of credit and paying them off will help with credit repair after bankruptcy.

It is important to remember that while bankruptcy is very serious and affects your credit score in the worst possible way, it is not the end of the road and there is life after bankruptcy. With corrective steps and by following the tips to improve your credit score after bankruptcy you could be on the road to recovery and on to a healthy credit score.

References:

1. Bounce back fast after bankruptcy – MSN Money
2. Credit after bankruptcy – Moran Law
3. Chapter 7 impact on credit – Bankrate

What Are Time Barred Debts?

In simple terms a time barred debt is a debt which if from so far back that the creditor or debt collector cannot sue you in respect to that debt. Depending upon the state you are in and in accordance with the statute of limitation, there is a certain period after which debt collectors may no longer file charges against you.  It is best to check the period after which a debt is considered time barred. Information regarding the same can be obtained from the Attorney General’s office (1).

Debt Collection On Time Barred Debts

The Federal Debt Collection Practices Act (FDCPA) does not place any restriction on the collection of a statute of limitations debt by a debt collector. However the one restriction in place with regard to statue of limitations on debts is that debt collectors cannot sue or threaten a client in regard time barred debts. In the event that you have been sued by a debt collector for a debt with a statute of limitations, the law suit can be annulled by informing the judge that the debt has reached the status of being time barred.

Time Barred Debts and Your Credit Report

There has been a lot of speculation with regard to whether or not a statute of limitation debt can appear on your credit report. It must be kept in mind that irrespective of whether or not the debt is time barred, it can appear on your credit report depending on the period of delinquency. Once a debt is more than seven years old it usually falls off your credit report. Debt collectors cannot collect on debt that has been discharged in bankruptcy, irrespective of when the debt was incurred.

Efforts To Collect On Time Barred Debts In The Future

It may be in your best interest to get a written confirmation from your creditor stating that you have been released from your debt obligation. In relation to this written confirmation it may be advisable to consult an attorney in regard to the validity of the document. Once you have received this document debt collectors can no longer pursue you with regard statute of limitation debts. If a debt collector is pursuing you in regard to a time barred debt, you have the right to sue the debt collector. In the event that your law suit is successful you will be entitled to claim not only damages but also a sum of $1,000 and all your attorney fees and court charges.

Hence these are the basic rules governing time bared debts. It is very essential for consumers to completely understand their situation and obligations with regard to time barred debts before seeking any form of action or pursuing any law suit.

References:

1. Home Page – National Association of Attorneys General
2. What are time barred debts? – BCS Alliance
3. Time Barred Debts – Federal Trade Commission

Charge Off Definition – What Is A Charge Off?

When an account has been in collection for over a period of 180 days or 6 months, the creditor terms this account as a “Charge Off”. In addition to this the creditor will place a charge off listing on your credit report. This is quite similar to the concept of a bad debt in the books of the seller. However unlike as in the case of the bad debt, the creditor will still try and recover the said amount from the debtor where charged off debt is involved. In most cases the creditor sells the account to a collection agency who then pursue the client to collect payment.

How Long Does A Charge Off Stay On Credit Reports?

There are many misconceptions out there regarding charge offs. It is essential to understand that a charge off on your credit report can stay for a maximum of 7 years and no more. However, consumers are somewhat of the opinion that if a collection agency sells the collection account to another collection agency the clock on the 7 year period starts again. This process is known as re-aging and it must be noted that it is illegal. No matter how many times the charge off debt account is bought or sold the time period will remain as 7 years and no more from the date the charge off was listed. Certain collections agencies use a hoax by telling clients that the 7 year period on the charge off will recommence but this is only to make consumers pay and the legally the charge off can only remain for 7 years.

Charge Off On Credit Report – Impact

Charge offs as you already know, negatively impact your credit report. A charge off on your credit report can impact your credit score by up to 100 points. This lowering of your credit score could be the reason that you are denied new credit contracts. Moreover charge off debt will affect your payment history and lenders view it negatively as it means that an account on which you owed a debt has been in collection for over 180 days. This does not reflect well when you are applying for a new credit contract or are even thinking of increasing an existing credit contract.

Remove Charge Offs From Your Credit Report

It must be noted that a charge off can be removed from your credit report only by the original creditor. In order to remove charge offs you might have to negotiate with the creditor who might either accept a partial payment for the charge off or might demand full payment. Remember to get the terms of your agreement in writing. If however the charge off debt account has been sold to a collection agency it will remain on you credit report for 7 years. Try and negotiate with the creditor prior to the creditor bringing a judgment on your account to recover the debt.

It is beneficial for clients to ensure that they stay on top of their contractual payments to avoid situations such as charge offs and debt recovery. If however clients do fall in to these situations it is up to them to ensure that they negotiate their way out the charge off and have it removed from their credit report prior to it being sold to a collection agency as this would result in the charge off being on your credit report for a period of seven years.

References:

1. Utility charge off could hurt credit score - Bankrate

Getting A Home Loan After Bankruptcy

At the very outset you should remember that once you have been discharged from bankruptcy it is best to wait for at least 2 years prior to applying for a bankruptcy morgage loan.  If however you do decide to apply for a after bankruptcy home loan prior to the 2 year gestation period, ensure that you have flawless repayment history and that all your contractual obligations associated with the bankruptcy have been paid and are up to date. Once the 2 year wait period is up it is fairly easy to get a bankruptcy mortgage loan and in certain cases you can even get up to 100% finance. Lenders when considering bankrupt client applications look at the following things:

• Repayments history post discharge from bankruptcy.
• Timely payment of all financial obligations related to the bankruptcy, especially government debt if any.
• Source of deposit for property.
• Employment and stability of income.

These are a few things which lenders keep a close eye on. One thing that you might have noticed is that lenders nowadays are very particular about the source of the deposit on the property. This is particularly important owing to the fact that in the past clients have tried to defraud banks when getting a home loan after bankruptcy by misstating the source and details of the deposit. If your bankruptcy mortgage loan deposit is from a relative, the banks might need you and your relative to get a signed statutory declaration stating that the funds are a non-repayable gift. This is done so that the bank is satisfied with the source or else it will also constitute another loan or credit contract.

Home Loans With Bankruptcy – Tips

Applying for an after bankruptcy home loan is not the same as applying for a regulr home credit loan. Listed below are a few tips to help set yourself up well for home loans with bankruptcy, after you have been discharged from bankruptcy. This should ensure that you are in a good position while applying for a after bankruptcy home loan.

• Budget: One of the most important things post bankruptcy is budgeting. Take into account all of your fixed overheads. Then take your income and subtract your expenses from it. This will give you a residual surplus which you can use to start a savings pattern or use to reduce bills faster before you apply for an after bankruptcy mortgage loan.

• Rectify Mistakes On Your Credit Report: Quite often consumers emerging from bankruptcy find that there are still a number of accounts which appear as delinquent, overdue or open on their credit reports when in fact these should actually be closed and are credit report errors consumers are often unaware about. Take these issues up with the appropriate credit bureaus and try and resolve them as soon as is possible. This will ensure that your credit report looks a lot healthier when applying for a home credit loan.

• Apply For Small Chunks Of Credit: By applying for small amount of credit you will put yourself in a position to repay these small loans like car loans and personal loans a whole lot sooner and thereby build your repayment history and increase your credit score. This will work in your favour when applying for a bankruptcy mortgage loan.

• Use Your Credit Card Sparingly: Having a credit card and using it only as required is another way to build up your credit score as discussed in the post about credit card balances. When you use your credit card sparingly and pay out the credit card debt in full each month, this adds a lot not only to your credit score but also your repayment history, making it possible for lenders to trust you when you apply for a bankruptcy home loan.

Consumers must remember that your bankruptcy might be on your credit report for a period of 10 years, but it will not be there forever. It will eventually come off and your credit report will go back to being normal. It is prudent to ensure that all your bills are up to date and that you are trying to build your credit report every step of the way. With these simple steps consumers who have just been discharged from bankruptcy should have no problem applying for an after bankruptcy home credit loan.
References:

1. Bounce back fast after bankruptcy – MSN Money
2. Personal Loan after Bankruptcy - The Dolar Stretcher

Relationship Between Auto Car Insurance Premiums And Credit Report

Primarily it needs to be stated that not all auto car insurance companies determine the auto insurance premiums of an individual in conjunction with their credit reports. Big names in the insurance field like GEICO and Allstate in addition o others have adopted this practice. It is not known to the public as to what calculations or formulas are incorporated by automobile insurance companies while calculating the vehicle auto insurance premiums applicable to individuals. While motor vehicle insurance companies are extremely secretive about this, it might be interesting to know the rationale behind linking auto insurance premiums to an individual’s credit report. Vehicle auto insurance companies which have adopted the fore mentioned practice are of the opinion that an individual with a good credit report is under less stress and hence is a lesser threat on the road and a more unlikely candidate to meet with an accident. However individuals with poor credit reports seem to be under pressure and are not only a greater threat to themselves but are also a threat on the road. In addition to this they also pose the threat of not meeting their regular auto insurance premium commitments.

Vehicle Insurance Policy Options

In the event that you find yourself in a situation where the vehicle insurance policy quotes for your automobile are much higher than expected, do not panic, you do have a few options.

• Firstly, speak to your auto insurance agent and inquire as to which Tier you are on. It is mandatory for your agent to disclose this information to you if asked.

• If you find that your credit report is affecting your vehicle auto insurance quotes by and large, try and pay down short term credit like credit cards, personal loans or even vehicle loans to improve your credit score and thereby obtain a lower automobile insurance quote. It might also be a good idea to get your credit report to see if there are any more credit report errors that might have crept in.

• Please note that not all motor vehicle insurers charge you premiums based on your credit score. Shop around to gauge which is the better option. You just have to find the right insurer who does not pay as much attention to your credit report as some of the others.

Considering the fact that auto Insurance is necessary in this day and age, consumers should try and evaluate their options before settling in on an automobile insurance quote. Be careful that your vehicle auto insurance premiums are not inflated owing to your credit report. If this is the case, look for insurers (and there are insurers out there) who do not focus as much on credit reports as their larger counterparts. This might be the difference between you paying an acceptable motor vehicle insurance premium and you being grossly overcharged and penalized for your credit report.

References:

1. Can Your Credit Score Affect Your Automobile Insurance Rates? – Credit Report Advice
2. What is Insurance Credit Scoring? – Insurance Scored

Refinance Your Mortgage For Better Credit Report

Consumers are sometimes misled and often believe that bankruptcy is a whole new start. While this is true, one should remember that declaring yourself bankrupt, comes with a lot of repercussions and bankruptcy affects credit reports as stated below:

• For starters, your FICO score gets affected negatively by anywhere between 240-280 points owing to the fact that bankruptcy is a matter of public record.
• Secondly clients who have been declared bankrupt find it very difficult to obtain credit and even if they do it is at a much higher interest rate.

Hence in light of these facts a mortgage refinance might just be the saving grace and one of the best alternatives to bankruptcy.

Alternatives To Filing Bankruptcy

Bankruptcy is not the only solution to manage mounting debt and there are some alternatives to filing bankruptcy that will not affect your credit report as badly. Listed below are a few alternatives to bankruptcy:

1. Refinance A Mortgage To A Lower Rate: If you are still in a product or with a lender offering a higher interest rate than the market place, it might be time to shop around and look for a lower interest rate for a mortgage refinance. A lower interest rate means lower repayments.
2. Mortgage Loan Refinance And Debt Consolidation: If you have more than one property and are struggling to keep up with your repayments, a mortgage loan refinance and debt consolidation might be a good idea. Consolidate your two separate mortgages into one facility and make one repayment on them. This usually also enables customers to make lower repayments owing to the single facility being larger and is an excellent bankruptcy alternative.
3. Line of Credit: This is a very powerful mortgage tool. This is much the same as using a checking account. The client is granted an overall account limit and can draw down from the mortgage loan as and when required. You only pay interest on the drawn down amount or the used amount.
4. Obtaining Cash Out: This type of a mortgage refinance will allow you to use the lazy equity in your mortgage loan. The diagram explains what lazy equity is.In this example the consumer can get a loan of up to 80% of the property value, i.e. 480,000 without having to pay Mortgage Insurance. Hence the client can use the additional 30,000 as per the client’s discretion. People often use the cash out component to pay off bills, credit cards and to create buffers in their mortgage account.

Using a mortgage refinance is a great alternative to bankruptcy as a well managed mortgage loan improves your credit report rather than the damage bankruptcy causes. However, there is one more alternative to bankrtupcy as well:

• Filing For A Chapter 7 or Chapter 13: Clients can sometimes file for a chapter 7 which is commonly known as liquidation as alternative to bankruptcy. This does not disqualify a client from obtaining a mortgage refinance as long as 2 years have passed since the client was discharged of the bankruptcy. On the other hand if the client files for a chapter 13, he/she can still obtain a mortgage refinance as long as the payments in relation to the mortgage and the bankruptcy have been made on time.

In a changing credit environment, consumers can no loner rely on the “one size fits all” principle. It is essential that clients reassess their situations and are full aware of all bankruptcy laws before making a decision. As as an alternative to bankrtupcy, one can refinance mortgages out of their present financial institutions and on to cheaper rates and solutions. This could be the ideal alternative to bankruptcy and helping you maintain a blemish free credit report.

Reference:

1. Could Mortgage Refinance Help You Get Out Of Debt? – Legal Helpers

Pre Paid Credit Card – How Does It Work

A pre paid credit card is much like opening up a savings account and linking a debit card to it. In order to activate your prepaid credit card you will need to open up an account and deposit funds into it. Your prepaid credit card is linked to this account and you can use it just like any other normal credit card. Once you have exhausted the funds in the account, you will no longer be able to make transactions on your prepaid credit card until you deposit funds in the account again. This is ideal for individuals with poor credit histories owing to the fact that prepaid credit cards for bad credit consumers give you the freedom of a credit card without the attached liability. Consumers must remember that when they initially deposit money into their prepaid credit card accounts they are charged a deposit fee of around $5-$10. This is a recurring fee and is charged every time consumers deposit money into the account.

Difference Between Pre paid Credit Cards And Debit Cards

In essence there is no real difference between prepaid credit cards for bad credit consumers and debit cards so to speak. Neither of these cards affect your FICO score as they are directly linked to accounts which have funds in them. Pre paid credit cards just as debit can be used almost anywhere, except car rentals, where debit cards cannot be used. Another difference between the two cards is that prepaid credit cards charge you a deposit fee every time a deposit is made into the account, whereas debit cards do not.  Prepaid credit cards are for individuals with either a poor credit history or for those who do not wish to have a liability of a credit card but want all its features. Debit cards are more popular among teenagers and students, owing to its no liability factor and you only spend what you have.

Prepaid Credit Card For Consumers With Very Poor Credit – Advantages

Prepaid credit cards for consumers with very poor credit has its advantages.
•    Consumers can only spend what they have in their prepaid credit card account and once they have exhausted the funds, the prepaid credit card cannot be overdrawn.
•    Pre paid credit cards do not affect your FICO score in any way therefore avoiding the worry of a credit card balance affecting credit reports.
•    Prepaid cards are beneficial for customers who want to curtail their spending habits yet would like the features and freedom of having a credit card.

Pre Paid Credit Cards For Bad Credit Consumers – Disadvantages

While pre paid credit cards for bad credit consumers have their advantages, these prepaid cards have their drawbacks too.
•    Consumers are charged a deposit fee every time they deposit funds into the prepaid credit card account.
•    Certain online merchants do not accept prepaid credit cards as payment. This stems from the fact that they are unsure that the prepaid credit card will be able to cover the transaction.
•    Obtaining goods on prepaid credit cards via finance can be very difficult as instalments are deducted from credit cards at fixed intervals of time and retailers or merchants may not accept prepaid credit cards as a repayment options.
For bad credit and poor credit consumers looking for the freedom of a credit card but attempting to avoid the credit card debt, a prepaid credit card is a good option to use until you get your credit report back on track.

Reference:

1. What Are Prepaid Credit Cards – WiseGEEK