Archive for February, 2015

Is My Credit Card Debt Too High?

Wednesday, February 25th, 2015

It is not uncommon for American households to carry a credit card balance. It would be ideal to pay them off, but most people have a hard timecredit card debts getting to that point. But how much is too much. The items below (from Money Crashers) can give you a good idea.

All Your Money Goes Toward Debt
Take a minute to calculate how much you spend on debt payments each week. Pull out your credit card statements and other financial reports, tally your minimum debt payments, and then compare this figure to your monthly income. In a perfect world, debt payments should not exceed 36% of your gross monthly income. But if you’re spending 50% or more on debt payments each month, it’s time to make some financial adjustments.

Working simply to pay off your debt is exhausting and can lead to burnout. While you can’t do anything to get rid of credit card debt overnight, you can take steps to eliminate other debts. For example, you can rent a cheaper apartment, or get a roommate to lower your expenses. There’s also the option of selling your car and lowering your car payment. Do you have a timeshare? If so, consider letting the property go to reduce your debt payments.

You Can Only Afford Minimum Payments
If you can barely afford the minimum payment on your credit cards, you’re likely carrying too much debt. Get on the phone and plead with the credit card companies to lower your interest rates. If you’ve paid on time and you have a good history with the creditor, the company will likely work with you.

Otherwise, transfer balances to a card with a low introductory offer rate. In this scenario, it’s ideal to pay off your debt – or as much of it as you can – during the intro APR period before it adjust to the higher standard APR. While a rate decrease will lower your current minimum payment, if you continue to pay the original minimum, you’ll decrease the debt faster.

It Casuses You Anxiety
Too much debt often results in credit cards that are nearly maxed out. Furthermore, creditors can repeatedly call your home phone or cellphone if you’re behind on payments. The stress of not being able to keep up with payments can affect your sleep routine, happiness, appetite, and anxiety level. If you’re constantly thinking about your debt – or being reminded of your debt with collection calls – you’re probably carrying too much.

You Have Been Denied for New Credit
The amount of debt you owe affects your credit score. The more debt you carry, the harder it is to get new credit. Your streak of credit approvals can quickly come to an end as lenders and creditors review your applications and decide that you’re overextended.

Creditors and lenders send rejection letters after turning down credit applications, and these letters often explain the reasons behind a rejection. Common reasons include a low credit score, no credit history, high balances, and, sometimes, too much credit.

There Is Nothing in Your Savings Account
A comfortable nest egg is a sign of good personal finance management. This provides income after a job loss and cash for other emergencies. However, if you’re spending all your money on debt payments, there’s probably little left for savings.

Earning additional income from a side job or a pay increase doesn’t have to preclude buying a bigger home or a better car. Take a look at your personal savings accounts: How much do you have in liquid funds? Do you have at least six month’s income in a cash reserve? Lack of a savings account can indicate a huge problem – especially if you’re constantly shopping and accumulating new creditors.

You Pay Your Bills Late
When you’re carrying too much debt, it can be hard to keep up with your monthly payments. You can forget about creditors and due dates altogether, or send late payments. Owing too much can hurt your credit score, and if you begin sending late payments, your score takes another major hit.

Carolyn Secor P.A. focuses its practice in the areas of Bankruptcy and Foreclosure Defense in Clearwater, Florida.  For more information, go to our web site
or call (727) 254-1704.

Should Older People File Barkruptcy?

Tuesday, February 10th, 2015

Older people run into unexpected problems, just like anyone else. And if they are not working and don’t have a lot of savings, they may not be old couplein a position to deal with the problem. However there are some things to consider. (refer Bankruptcy Network).

Their retirement can’t be garnished and the credit industry can’t get at it (in most cases). Social security is almost completely protected from creditors. And, so is the house: a credit card company can’t force you to sell your home even if you owe them a lot of money. At least not in California, and, I would guess, most other states as well.

So, what possible benefit can there be to an elderly couple to file bankruptcy? Here are four good reasons why not to file:

1. It’s humiliating. We were all taught to pay our debts; and no one wants his or her neighbors to know that they can’t handle their economic obligations.

2. It costs money. The attorney and the court have to be paid.

3. It “ruins” a perfectly good credit score.

4. It sets a bad example for the children.

Those are very good reasons not to file; but the benefits far outweigh the detriment. Four of the many advantages to filing a bankruptcy:

1. It stops the collection calls and letters.

2. It will, ultimately, improve your credit score.

3. It teaches responsibility: facing your economic problems and doing something.

4. It is one of the best forms of estate planning there is. Imagine you pass away with credit card debt and no cash to pay it. Your house will have to be sold to cover those charges! But if you file bankruptcy, your house is exempt from being sold – you get to keep it – and the credit card debt goes away! Now, should you die, your children or loved ones get to keep the house.

All in all, bankruptcy can be a wonderful tool to free you to enjoy the rest of your life. See an experienced bankruptcy attorney to discuss your financial situation. Carolyn Secor P.A. focuses its practice in the areas of Bankruptcy and Foreclosure Defense in Clearwater, Florida.  For more information, go to our web site
or call (727) 254-1704.