Monday, September 3, 2007

Bankruptcy and the Investor

Investing is all fun and games until someone goes broke. One hard reality which ever investor has to come to terms with is that you are not always going to gain. In a matter of six months, with bad decisions, a stock portfolio can be completely destroyed. Leaving the investor with no cash flow and no way to pay bills. There are very little options for investors who have had some bad luck other than to file bankruptcy. Bankruptcy is a process in which an individual who is in debt can seek relief from that debt from the government. It can be a viable option to an investor debt relief but certainly should not be the first choice.

There is no clear way to know if you should file for bankruptcy or not. Discuss your with your financial advisor or seek the help of a credit counselor. Additionally, most bankruptcy attorneys offer a free advisory meeting to help you clarify issues and see if you are a good candidate for bankruptcy. Bankruptcy is a choice that you will have to live with for years. It will affect your ability to get a loan, lease a car, rent an apartment, and invest. Individuals who file bankruptcy are considered back risk for lending and investment companies. There are alternatives to filing bankruptcy. Below are a summary of those options. Choosing which option is for you is going to depend on your specific situation and how much in debt you actually are.

Hire a Financial Advisor - This may be hard for an investor to do but often giving up the control of your money can help you get a grasp on your life. A financial manager takes your money, pays your bills, gives you set allowance. This is done until your life, finances, and spending habits are in control. If feel you can help self control seek out a financial counselor that can help you set up a budget. Making a budget is the easy part, adhering to it can be extremely difficult. Make sure you select an experienced and moderately priced financial manager. Many managers offer services for large fees and have very little experience.

Working with Creditors - Calling up your creditors, explaining your situation, and hoping that they will be able to work with you is always an options. Some creditors are more than willing to help their clients through a time of financial crisis. Most creditors are aware that some debts are just hard to collect even if there has been a bankruptcy therefore it is in their best interest to work with you.

Refinance What You Can- If you own a home, and have some equity in the home, consider refinancing your home to pay off all of your high interest debt. Make sure you seek out refinancing options from a bank or respectable lending institution. There are many companies who will offer to combine all your debts into one low payment but these companies also charge huge fees for this service. In other words to not give up one group of debts for another (perhaps more damaging) debt.


http://www.articleco.com/Article/Bankruptcy-and-the-Investor/39737

Getting A Credit Card After Bankruptcy

If you have had to declare bankruptcy for any reason, it is easy to get overwhelmed by the sheer volume of things to consider. But, getting a credit card after bankruptcy is one of the best ways to begin rebuilding your credit score, if you are careful and selective about choosing the right card and provider.

Lets face it; a bankruptcy is a huge blow to your credit-worthiness. However, a sober assessment of your situation, followed by learning from the mistakes that may have led to the bankruptcy, is key to getting your financial house back in order by obtaining lines of credit that you can use to rebuild your credit score.

Get Credit Reports From All 3 Major Credit Bureaus

The first step to finding the best rates on a credit card after bankruptcy is getting a copy of your credit report from each credit bureau. Lenders rely on the credit reports from 3 main credit agencies to determine your credit-worthiness, and the rates that you will pay on borrowed money. These agencies are: Experian, Equifax, and TransUnion.

After you receive your reports, carefully examine them for inaccuracies that can continue to undermine your efforts to re-establish credit. If you discover claims that are false, contact each agency and:

Keep a record of all correspondence.
Write a letter to each agency disputing the inaccuracies.
Notify the business that reported the false claim in writing and tell them that you are disputing it.
Request that the agency contact the business so that the dispute can be resolved.
Make sure that a record of your disputes is included in future credit reports.

Secured vs. Unsecured Credit Cards, Which is Best For Your Situation

There is no stock answer that will work for everyone on this. The particulars of each persons situation will dictate which option will work best for them but here are some facts to inform your decision:

Secured Credit Cards

Secured credit cards are cards that are issued from banks or credit unions that guarantee a specific line of credit as long as you have a corresponding balance in your account that they can use as collateral if you default on a payment. For example, if you have a $500 line of credit, you must maintain a balance of $500 in your account.

Because your debt is secured by a predetermined amount, you can generally get a more favorable rate of interest from these lenders. But, it is recommended that you pay the full balance each month to keep your account in good standing. Look for a card that will offer the option of becoming unsecured after a period of responsible use.

Unsecured Credit Cards

Unsecured credit cards are easily available from all sorts of lenders and there lies the rub, easy availability. These cards offer huge come-ons about increased lines of credit without the need to maintain a balance, but you run the risk of repeating some of the same mistakes that may have contributed to your bankruptcy in the first place.

In fact, there are many credit card outfits out there that specifically target people that have filed for bankruptcy and take advantage of this by offering egregiously high interest rates. Also, they further leverage their position by nickel and diming you with all sorts of application fees meant to prey on your financial vulnerability.

Whichever type of credit card that you choose, make sure that you explore all of your options, and read the fine print before you sign the agreement. There may be hidden fees and costs that will hinder, not help, you in your quest to rebuild your credit rating. Also, make sure that you do not apply for more than 1 or 2 different credit cards. Each rejection will negatively affect your credit rating, and defeat the purpose of getting a credit card in the first place.

Summary

Getting a credit card after bankruptcy to start rebuilding your credit rating is a marathon, not a sprint. You must carefully plan when and how to use your credit card so that it becomes an asset instead of a liability.

Make sure that you pay off the full balance each month, well before the due date, and use your credit card only when absolutely necessary. After every 6 months of responsible credit management, call your lender and ask for a lower interest rate. They might not honor your request each time, but they will like the fact that you are actively pursuing the means to manage your credit more effectively.

The next time you reach for your wallet and dont have the cash on hand to make a purchase, ask yourself, Is this a want or a need. If the answer is the former, put your wallet away and congratulate yourself for making another step on the long road of credit rating recovery.



http://www.articleco.com/Article/Getting-A-Credit-Card-After-Bankruptcy/48857

Discharged Bankruptcy These Steps Could Help

If you have a discharged bankruptcy, here are three steps that could help increase your chances of qualifying for credit and loans:

1. Order copies of your credit reports

You will want to order copies of your credit reports from the major credit reporting agencies (Experian, Equifax, and Trans Union) after your discharged bankruptcy. You can order your reports by mail, telephone, or online.

You may even be entitled to a free copy of your credit report - check with each of the major credit reporting agencies. In After Bankruptcy Credit Solutions I cover five ways to get a free copy of your credit report. But free or not, ordering copies of your credit reports after your discharged bankruptcy is important if you are planning to apply for any credit or loans.

2. Clean up your credit reports

Once you have copies of your credit reports, you will want to review each one carefully. You will want to make a note of any inaccurate or obsolete negative information that needs to corrected or removed. You will also want to make sure that your discharged bankruptcy is being reported correctly on each credit report.

While there is not enough room here to go into detail on how to correct or remove any inaccurate or obsolete negatvie information on your credit reports, I explain how in After Bankruptcy Solutions - and also what to look for when cleaning up your credit reports after a discharged bankruptcy.

3. Focus on increasing your credit score

Cleaning up your credit reports after a discharged bankruptcy is one way that could help increase your credit score. There are a number of other ways as well including: Establishing some new accounts and paying them in a timely manner over time, maintaining low balances on your credit card accounts, and even adding years of positive credit history to your credit reports.

In this article we looked at three steps that could help increase your chances of qualifying for credit and loans after a discharged bankruptcy. There are a number of other strategies you can use � but I will save those for future articles dealing with credit and loans after a discharged bankruptcy.

The company and product/service names referenced in this article are the trademarks, registered trademarks or service marks of their respective owners. None of the owners have sponsored or endorsed this article.

DISCLAIMER:

This information is designed to provide only a general overview of the subject matter herein.

This information is provided with the understanding that neither the publisher nor author is engaged in rendering legal, accounting or other professional advice. If legal or other expert assistance is required, the services of a professional should be sought.

Neither the publisher nor author shall be liable for any loss or damages, including but not limited to special, consequential, incidental or other damages, caused by the information contained herein.



http://www.articleco.com/Article/Discharged-Bankruptcy--These-Steps-Could-Help/3339