Bankruptcy Alternatives – 5 Ways to Avoid Bankruptcy

What you are about to read may stop you making the biggest mistake of your financial life.

In today’s debt ridden society many people are in severe financial difficulties, often for reasons outside their control. Bankruptcy for many, is the last step in a long road of financial pressures but many opt for this solution too early and without considering suitable bankruptcy alternatives. Whilst bankruptcy may get rid of the immediate pressures it isn’t necessarily the end of the problems.

When you file for bankruptcy your life becomes an open book for the court appointed bankruptcy officials. They will pry into all aspects of your life and you will be required to provide all your financial information, including bank accounts, savings, investments and assets. Anything that can be sold or converted to cash, including your family home and any valuable contents, will be disposed of and you may still have part of your income deducted from your salary to pay some of your debts.

But there are bankruptcy alternatives that may be less painful for many. Here I’ve listed 5 bankruptcy alternatives

1. Negotiate with your creditors.

When you get into difficulties you should contact your creditors as soon as possible. Contacting them sends a signal that you want to repay them.

Lenders are anxious to get their money back and sometimes they will go to great lengths to help you. They may be prepared to re-finance your debt to have it paid over a longer period with lower installments.

They will often be prepared to reduce or freeze the interest rate and will even cut the balance owing up to 75%.

2. Refinance your mortgage.

If you have a property, which you own outright or on a mortgage, there is the real possibility of you being able to refinancing your debts using a secured mortgage or re mortgage.

Refinancing your debts involves taking out a new mortgage, or an additional mortgage. Some lenders will lend up to 125% of the property value allowing you to pay all your outstanding debt and may even have some spare cash to treat yourself.
As the new loan is repayable over a long period of time (often 25 – 35 years) the monthly repayments are significantly lower than with short term debt and should be far more manageable

3. Refinance your debts using a debt consolidation loan.

Debt consolidation is where you take a new unsecured loan and use the funds to pay off your outstanding debts. Debt consolidation loans are repayable over a longer term at a relatively low interest rate and as a result the monthly repayments are lower. If the loan is secured on your property then the interest rate and payments may be even lower.

4. Sell your home and downsize.

One of the easiest ways to get out of debt is to sell your house or apartment and downsize or move into rented accommodation. The surplus cash can then be used to pay your debts and you can continue with your life without the pressure.

Selling up and moving home is, however, a difficult and often painful option. If you do sell however. you can determine the price and remain in control. If the house falls into bankruptcy, you lose control and the house may be sold by
your mortgagor at auction for a price often considerably less than the price you can obtain in a normal sale.

5. A formal arrangement with your creditors.

A formal arrangement with your creditors can often be negotiated by specialist debt management companies and is filed with the courts. These arrangements are for 5 years. You pay an agreed amount each week or month to the debt management company and it is then divided between your creditors. While you continue to pay they are prevented from approaching you.

After the 5 year period is over any balance still owing is wiped out and you are free to live your life free of debt. If however you break the arrangement the normal result is bankruptcy.

As you can see, there are several sound bankruptcy alternatives for you to choose from.  Everybody is under financial pressure from time to time, however you should not compound your problems by declaring bankruptcy too soon. Instead, choose the bankruptcy alternative that sounds the best for your particular situation and start working to repair your credit now.

Using a bankruptcy alternative means that in a few years you will have rebuilt your credit and will be back on track, whereas with bankruptcy it could be ten years before you can get back to normal.

Money Saving Tips For The Self-Employed Insurance Seeker

Business Insurance | Vitas Insurance Agency


Everyone knows that health insurance соѕtѕ аrе аt аn all tіmе hіgh. With thе соѕt оf medical care аlѕо skyrocketing, реорlе, еѕресіаllу those thаt аrе ѕеlf-еmрlоуеd аrе dеѕреrаtе tо fіnd ways tо ѕаvе money on their health іnѕurаnсе. This can be a dіffісult task as most insurance соmраnіеѕ are far from еxсіtеd tо оffеr coverage to thе ѕеlf-еmрlоуеd.

Yоur fіrѕt step wоuld bе to ѕhор аrоund. Cоntасt аn agent that deals wіth many companies instead оf contacting thе соmраnіеѕ dіrесtlу. Thіѕ will save уоu nоt оnlу tіmе but also ѕоmе mоnеу in thе рrосеѕѕ bесаuѕе аn аgеnt wіll not bе раіd unless he оr ѕhе fіndѕ thе іnѕurаnсе that іѕ rіght fоr you and уоu agree tо tаkе іt. Tеll thе аgеnt еxасtlу what уоu аrе lооkіng for аnd hоw much уоu wish to ѕреnd оn рrеmіumѕ, deductibles аnd ѕо оn. Rеmеmbеr, bе ѕресіfіс! If you wаnt tо еnѕurе thаt уоu аrе getting whаt you wаnt thеn you nееd tо give as many dеtаіlѕ as роѕѕіblе.

Onсе you have ѕоmе offers in hаnd read the fіnе рrіnt. This іѕ thе numbеr one mіѕtаkе made bу реорlе whеn ѕееkіng health іnѕurаnсе. Surе, the роlісу looks grаnd on the ѕurfасе but thеn оnсе уоu аrе locked іn уоu find thаt іt іѕ full оf rеѕtrісtіоnѕ and extra fееѕ. Insurance companies аrе іn business to make mоnеу, nоt ѕреnd іt. If it ѕоundѕ tоо good tо bе true thеn іt probably is.

Fіnаllу, dо nоt аgrее tо аnу роlісу untіl уоu hаvе checked out all the offers that were mаdе to уоu. More often thаn nоt, a hіghеr рrеmіum роlісу іѕ bеttеr іn the еnd because іt оffеrѕ ѕmаllеr deductibles, аnd fеwеr restrictions. You соuld fіnd уоurѕеlf рауіng less fоr a роlісу but thеn also gеttіng a lоt lеѕѕ in return. If the policy dоеѕ nоt hеlр уоu thеn іt dоеѕ not mаttеr how ѕmаll thе рrеmіumѕ аrе.

Do I Need Excess Liability Coverage?

liability-insuranceJohn and Mary live in a nice five bedroom home located in California.  They’ve lived in their three thousand square foot home for twenty five years and are retired.  Their home is paid for and worth about $900,000.  They live off their retirement and have hardly no bills to pay.  John and Mary have always had a homeowners policy to cover their home in case of fire, theft or other potential losses involving their home.  Mary is age 75 and John is age 72.  They hope to someday leave their home to their adult children.

On a nice spring day, Mary went to run some errands in her vehicle around her neighborhood.  She pulled into the parking lot of her local grocery store.  For some reason, after Mary parked her car , her foot slipped off the brake and hit the accelerator instead.  Mary’s car went through the wall of the grocery store. Her vehicle continued through the wall of the store and she collided into two pedestrians who were standing in line with their grocery carts.

Both of the pedestrians were rushed to the hospital due to the severity of the injuries they sustained from Mary’s car striking them. Mary was upset about the accident and did not know what she should do.  She called her insurance agent the same day of the accident and her agent took her information to start processing her claim.

Months later after the accident, Mary and John found out that the damages filed by the two pedestrians injured from the accident, exceeded the auto insurance liability limits that they carried with their insurance company.  John and Mary found out from their adjuster that they would be personally liable for any money damages which exceeded the liability limits that they carried.

The adjuster also told them that the pedestrians attorney did an asset check to see if Mary and John owned property.  The attorney found out  that they owned a home and would be expecting them to contribute additional monies towards the settlement of the pedestrians claims in addition to the auto insurance liability limits that they carried.

Mary and John were devastated and did not realize that their home the most valuable asset they owned was at stake! They worked all their lives for their home and could not believe that it may be at risk due to the accident.  John and Mary did not know they may have avoided contributing monies towards the pedestrians injury claims if they had excess liability coverage or an umbrella policy!

What is excess liability coverage or an umbrella policy? This policy would be coverage which would exceed your homeowners or vehicle policy for damages you may be liable for.

The cost of  excess liability coverage or an umbrella policy is very minimal for the amount of additional coverage you would receive.  You can expect to pay somewhere between $150-$400 annually for this coverage.  Consult your insurance company for details.  Remember, excess coverage is important for you to consider if your assets are substantial, especially being a homeowner.  This extra protection may give you better peace of mind in the long run and will be well worth it!

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