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Written by Canterbury Law Group

Removing the Bankruptcy Stigmas

When you’re talking about bankruptcy, it can be a scary conversation. Unfortunately, there is still a negative stigma around filing for bankruptcy, even if it the best solution for those considering this solution.

The bankruptcy stigma comes in a variety of themes. You may be worried about how your friends and family will react when they hear you talk about bankruptcy. It can also be challenging to get a credit card, or even get one at all, which can give you an unsettling feeling.

If the stigma is what is holding you back from claiming bankruptcy and you know it is the best decision for you, disregard these issues. Remember that thousands of people have gone through the same thing and they come out on top after it all.  As mom and dad said, “this too, shall end.”

Social Bankruptcy Stigmas

One of the hardest stigmas to overcome with bankruptcy is the concern of what people will think of you. Chances are there are people you know that have gone through the same situation you are in right now. Although bankruptcy cases are a “public” courthouse matter, typically people do not go out searching to see who filed for bankruptcy. Plus, you can keep it as private as you want.  Don’t ask, don’t tell—virtually nobody will even know you went through this cleansing and liberating process.

Emotional Stigma

If you find yourself feeling guilty for filing for bankruptcy, again, it is more than okay. The federal government offers bankruptcy for a reason—people deserve a second chance.  Big time.  Lots of the time, people who claim bankruptcy had no other choice and did everything they could. Many factors are outside of your control contribute, including the local and national economy. So, if you have guilt for not paying your bills as you should be, that doesn’t make you any less responsible.  You have done your best, you will do your best again.

Financial Stigma

The social and emotional stigma with bankruptcy is something that you can and will keep private, or seek counseling to help you through. Unfortunately, the financial stigma around bankruptcy is one that need not be inevitable. When you claim bankruptcy, your credit score goes down for only a short time—it will skyrocket later. It will be initially more difficult to get credit for things like a home or car loan. The good news, though, is that you can work your way back to a high credit score and remove the stigma altogether.  Most post-discharge consumers find themselves normalized on credit and their lives within a few years.

It’s the Best Option

In the end, it’s important to remember the benefits of claiming bankruptcy in your situation over the stigmas around it. Bankruptcy came to be as a safety net for those who need help getting back to a level of life they can survive in.

If you are thinking about bankruptcy, speak with the top bankruptcy attorney in Scottsdale to help you through the process.

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Regular Post
Written by Canterbury Law Group

Three Tips to Stop Stressing About Money

Although it may seem like the answer to many of your problems, having more money will not magically solve your financial woes. Sure, earning more money can certainly help your situation, but it is not the be all end all. Ultimately, you will experience a degree of stress regardless of how much money you make. While stress may never be eliminated entirely, you can take steps to reduce it as much as possible. Bankruptcy lawyers in Scottsdale recommend using the following three tips to quit stressing.

Find a side gig

Living paycheck-to-paycheck is never easy and the inability to save money can lead to worry and financial stress. In order to avoid this, think about ways to earn extra dollars, such as finding a higher paying job or an awesome side gig. Sustaining multiple sources of income is essentially like an insurance policy; it helps you not only pay the bills but also have reliable income if you lose another job.

Be in the know

Understanding the nature of your finances is critical. Failure to stay up-to-date with your money will exacerbate your financial distress. Thus, opening and addressing mail immediately is important. Not only that, you should maintain a calendar so you know and understand when things are due. If you are having a difficult time paying your bills, find a financial advisor or creditor to help you.

Cut your expenses

There is no doubt that overspending will lead to a diminished savings account and an increased balance on your debts. Not to mention, this all has a significant impact on your level of anxiety. You should take some time to eliminate unnecessary expenses. Consider your mortgage, for example. Ultimately, you should keep your mortgage or rent payment to less than 25% of your gross income.

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5 Logical Ways to Grow Your Money

Saving and growing your money is, oftentimes, easier than you think. There are a number of rudimentary saving habits that you can start today that could positively impact your money. Top bankruptcy lawyer in Scottsdale recommends adhering to the following five tips in order to double your money this year.

Automation

It’s important to automate your financial life. This means transferring your funds directly from your checking account to an interest-bearing savings account. Think about it: when you automate your financial life (putting money into a retirement or savings account), you won’t feel inclined to cut back on savings.

Track Expenses

It’s absolutely critical to have an in-depth understanding of where your money is going. You must look closely at your spending habits in order to figure out where you can cut back.

Monitor

Another important component to growing your money is making sure you monitor and measure your progress. Consider evaluating your net worth on a daily basis; you will find this both motivating and rewarding.

Alter Your Mindset

It’s never too late to start saving. Thus, you need to commit to saving money right here, right now.

Invest

The only way to build significant wealth is to have your money go to work for you through investments. Rather than having your money idle in a savings account (which is still good), throw those funds right into the market. Ultimately, the compound interest you earn will provide great returns.

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Five Must-Know Money-Saving and Success Tips

As you know, people rarely find success by accident. It’s important to set yourself up for financial gains by adhering to some of the best advice out there. Let’s take a look at five indispensable money-saving and success tips for your personal benefit.

Be Passionate

For most individuals, finding exactly what they love and monetizing it is one of life’s biggest challenges. Those tips are exactly what tycoon Warren Buffet says drove him to success in investing and finding great deals. Ultimately, being successful in almost anything means having a passion for it. If you see someone with even fair intelligence and a burning passion for what they do, they will almost undoubtedly find success.

Write Everything Down

Some of the most successful people make lists of all kinds. These can vary from lists of people to call, ideas, and/or companies to set up. Furthermore, you can create lists of topics to blog about, tweets to send, and even about upcoming plans. It’s important to write down every single idea you have, no matter how big or small, and then to challenge yourself to follow through. In doing so, you’ll be able to set financial priorities and reach your goals.

It’s Not All Luck

It’s easy to chalk up your success to being in the right place at the right time, but at the end of the day, no legitimate achievement can come without hard work. At times, success can be a lousy teacher; it seduces smart people into thinking they can’t lose. Don’t ever stop hustling or learning. As logic tells us, past success doesn’t ensure future success. Even the smartest and most talented people can lose.

Be Disciplined

The first step to getting rich requires a tremendous amount of discipline. Bankruptcy lawyers in Scottsdale note that if you really want to be rich, you need to find that discipline. If you’re looking to make money, you always need cash available. You aren’t saving for retirement. You are saving for the moment you need cash. Buy and hold is a relic. Ultimately, the first step to becoming rich is being a smart shopper and following through on that.

Find Online Resources

It is wise to check for discounts before you make a purchase. Websites like couponcabin.com and apps like Pic2Shop can help save you a lot of money. Furthermore, don’t forget to always check sites that give you cash back for your purchases, like ebates.com.

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Why Waiting to File for Bankruptcy Can Hurt You

Filing for bankruptcy is generally viewed as an admission of personal and financial failure. While many individuals try hard to avoid it, they end up paying the price for waiting.

Ultimately, the longer people wait to file bankruptcy, the more they struggle. By the time these people declare bankruptcy, their well-being and financial life are negatively impacted, undermining the fresh start the bankruptcy legal tool provides them.

Bankruptcy lawyers in Scottsdale explain the following reasons as to why waiting to file bankruptcy can be so damaging in addition to precisely when you should consider filing.

Why waiting is draining

The time frame prior to a person filing for bankruptcy is sometimes referred to as the financial “sweatbox.” This is the period when people are facing legitimate asset depletion, debt collection lawsuits, and avoiding necessities like food to avoid filing bankruptcy.

Unfortunately, most people sweat it out for years before truly coming to terms with their debt. The misery of the sweatbox is an increasingly common American experience.

“Long strugglers” are denoted as those who endure the sweatbox for two years or longer. Shockingly, around 30% of people wait five years or longer to file for bankruptcy.

It’s imperative to know that the longer people linger in the sweatbox, the worst their overall financial situation becomes. For example:

  • Long strugglers have 50% of the median assets compared with other debtors, or those who didn’t wait two or more years to file bankruptcy.
  • The median debt-to-income ratio of long strugglers is over 40% higher than other debtors.
  • Around half of long strugglers face debt collection lawsuits.

The stigma against filing and dedication to paying debts are part of what keep people from filing bankruptcy. Having said that, bankruptcy law gives the honest but unfortunate debtor a fresh and new start. This is important to understand.

When to consider bankruptcy

Many people who are in danger of filing for bankruptcy note that they wish they had reached out for help sooner. You should reach out to a credit counseling agency as soon as you begin to feel stress.

Let’s take a look at some factors that can help you determine if bankruptcy is right for you:

  • Your debts are more than 40% of your income
  • You’re using debt to pay for other debts
  • Your debts are ones that could be wiped out in bankruptcy
  • You’re forgoing core life essentials

As you might know, the two most common forms of consumer bankruptcy are Chapter 7 and Chapter 13. Which is best for you depends on your specific financial situation. Speak with a bankruptcy lawyer and nonprofit credit counselor if you are considering filing. If you do file for bankruptcy, however, it is certainly not the end of your financial life. To the contrary, it’s a way to generate a fresh start.

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3 Reasonable Alternatives to Bankruptcy

Declaring bankruptcy is a relatively extreme measure. Having said that, when used in the right way and at the right time, it can actually save you money, sustain your peace of mind, and get you back in a good place financially.  It can literally set you free.

Nonetheless, declaring bankruptcy can also be expensive and time-consuming. Furthermore, it can have an enormous impact on your credit score. As a result, this can have far-ranging effects on other aspects of your life, such as applying for an auto or home loan and even applying for jobs. You may be surprised to learn that waiting to declare bankruptcy until you are broke can actually do more harm than good.  If you’re on the path to financial ruin, you likely should consider bankruptcy sooner, not later.  You will end up with more in the end.

Because declaring for bankruptcy has long-lasting effects, bankruptcy lawyers in Scottsdale recommend the following alternatives to help you navigate through your financial situation.

Pay Bills Another Way

Working a second or third job is never a good time, nor is it a great way to spend your evenings and weekends. If it’s just for a short period of time, however, the extra income could put a real dent in your debt. What could be better? Although it may be difficult, consider working another job or two in order to make extra cash, if you can climb out of your debt hole within 12 to 24 months, this non-bankruptcy approach may make sense.

Follow a Budget

You’d be surprised to learn that many people don’t follow a budget and, as a result, don’t have a strong grasp on where their money goes (other than to pay bills, of course). In the absence of a written budget, it’s very difficult to see where or how you can make changes in your life that will free up your money.

For many people, the largest portions of our income go towards housing and transportation costs. For example, if you rent, downsizing your home and moving to a smaller place or searching for a roommate could largely impact your rent cost (it could also save you money on utilities as well). If your car is a gas guzzler, for example, selling and buying a small, fuel-efficient car could save you a lot of money that can be put towards debt payments.

Negotiate With Your Lenders

Fortunately, many lenders will lower interest rates or even consider adjusting your payment plan if you tell them you’re going to file for bankruptcy. This is particularly true of credit card companies, which stand to lose the most. Don’t be afraid to negotiate with your lenders in order to alleviate part of your situation. Or hire your bankruptcy counsel to conduct these negotiations for you.

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10 Well-Known Causes of Bankruptcy

While there are a variety of reasons as to why people end up filing for bankruptcy, there are certainly some leading causes. Based on recent studies, bankruptcy lawyers in Scottsdale break down the top 10 leading reasons. As you’ll see, the percentages represent the proportionate weight as to why an individual ultimately files for bankruptcy. Let’s take a look at them.

Medical Expenses (42%)

According to research, 42% of all personal bankruptcies are a result of complicated medical expenses. Interestingly enough, the studies also show us that 78% of those who filed had health insurance.

Job Loss (22%)

There are millions upon millions of Americans that are unemployed. As a result, this makes them much more likely to file for bankruptcy. Those who are unemployed often pay for health insurance out-of-pocket.

Unmonitored Spending (15%)

Bankruptcy can often come as a result of credit card bills, hefty mortgages, and expensive car payments. Uncontrolled spending habits can put Americans on the unfortunate path to filing.

Divorce (8%)

Legal fees, child support, and alimony can result in heightened financial stress. Unfortunately, nearly one out of every two marriages fail in America.

Unexpected Disaster (7%)

Unanticipated disasters such as earthquakes, floods, or hurricanes can be very hard to prepare for. Without insurance, this can possibly result in bankruptcy.

Avoiding Foreclosure (1.5%)

Someone can spend nearly a lifetime preparing to buy a home. In order to avoid foreclosure, some Americans will file for bankruptcy to reorganize debt in an effort to save their homes.

Poor Financial Planning (1.5%)

In the absence of a logical financial plan, bankruptcy can always occur. You should always build up your cash savings for out of the blue expenses that could lead to debt.

Preventing Loss of Utilities (1%)

With a foreclosure, you also run the risk of losing utilities. Keeping your lights and heat on too often can have severe financial consequences.

Student Loans (1%)

Fortunately, it may be possible to consolidate student loans with a bankruptcy.  Speak to your bankruptcy lawyer about your options, if any.

Preventing Repossession (1%)

If a creditor repossessed your car, bankruptcy may put you in a position to have your vehicle returned, in addition to any other personal property that may have been repossessed.

In order to avoid bankruptcy, consider steering clear of the aforementioned leading causes. Reading often and talking to people in order to education yourself will help you in the long run. Doing a few things right and maintaining those habits will put you a great place financially and will help you see through your monetary goals.

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When to File For Bankruptcy

When it comes to filing for bankruptcy, timing is everything. While everybody’s situation is different, divorce lawyers in Scottsdale suggest paying attention to the following four signs, which may mean that it’s the right time to file for bankruptcy.

Behind on Bills

Sure, life is certainly unpredictable and, generally speaking, you may not be prepared for a financial crisis. If you are in a tough position and know you won’t be able to pay your bills on time each month, (or have already fallen behind), filing for bankruptcy can really help you get back to where you need to be. For example, a Chapter 7 bankruptcy is deemed a liquidation bankruptcy that is structured to immediately eliminate your debts. Throughout this process, your Trustee will sell your property and use the funds to compensate your creditors. Unless otherwise
specified by you, your automobile can also be included in the sale of your property.

You’re in Debt Through a Collection Agency

If you have debt that’s been building up, there is a chance you may end up being sued if you continue to ignore debt collectors. Filing for bankruptcy can really help if you think you may end up in this position. Filing for bankruptcy puts what’s known as an “automatic stay” against debt collectors and can put an end to any additional collection actions.

Your Wages Are Garnished

In order to pay down a debt, creditors often take extra action to ensure the amount owed is legitimately paid. In doing so, collection agencies obtain a court order to garnish your wages. As soon as this happens, your employer is bound by law to hold back a specified amount from each paycheck, which ultimately goes towards paying down the debt that you owe. Similar to being sued, the automatic stay after filing for bankruptcy can block a company from further garnishing your wages.

You Might Lose Your House or Car

Let’s say you’re behind on payments for your house or car. Bankruptcy might be an effective way to stop repossession or even foreclosure (even if it’s temporarily). Furthermore, this will give you enough time to catch up on payments. Nonetheless, you’ll always want to speak with your lender regarding various options before you take an initial step.
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A great deal of thought should go into the decision to file for bankruptcy. As always, you should seek advice from an attorney if this is something you are considering. The sooner you consult a lawyer, the better, do not wait until the last minute when all of your money is gone and your debts are at their peak levels.

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Reasons for Bankruptcy and How to Avoid Them

When it comes to bankruptcy, there is both good news and bad news. In 2017, bankruptcy filings fell by 3%. Good news, right?

Having said that, there were still over 770,000 bankruptcy filings. This is something upon which we must improve.

In doing so, it’s important to examine the fundamental reasons why people end up in bankruptcy. Bankruptcy lawyers in Scottsdale have assembled the following five reasons in addition to how to avoid ending up in this dismal situation.

#1 – Job Loss

Although we are currently in a period of low unemployment, it was recently very high not too long ago. If you don’t plan correctly and fail to have a financial safe hold in place with sufficient funds, you can easily end up in bankruptcy. Things you’d have to consider in an emergency fund include food, rent, transportation, insurance, child-related expenses, and various asset expenses. Furthermore, you always want to prepare for medical expenses just to be safe.

In terms of your job, focus on being a productive employee with an amicable attitude. In addition, it’s always good to make yourself more marketable over time with additional certifications and skills.

#2 – Decreasing Income

Simply put, with less money and cash flow, the greater the chances are that you’ll end up bankrupt. While you may not be completely unemployed, a change in roles or a reduction in hours can really make it hard to stay afloat.

While this may be hard to avoid, you should prepare for this in the same way that you’d prepare for losing your job. Another option might be to pursue side gigs to augment your income.

#3 – Credit Card Debt

Credit card debt can really be a slippery slope, and if you let it get out of control, you’ll be in trouble quicker than you think. While it may be tempting to simply make the minimum monthly payments, you’ll actually just be dragging things out and losing money in interest over time.

There is a simple solution here – only purchase what you can afford and pay off your credit card every month.

#4 – Medical Expenses

It’s no surprise that one of the leading causes of bankruptcy is, in fact, medical expenses. We understand that medical treatment generally is not optional and also is quite expensive.

To avoid getting into debt because of medical expenses, focus on living a healthy life through clean eating, exercising regularly, and going for annual physician screenings.

#5 – Divorce

Divorce is one of the last major causes of bankruptcy. Outside of legal fees, which can be tremendously expensive, financial assets are not always allocated equally. If and when they are, you must consider the idea of living alone versus living with a spouse. A financial system that supported two people may not successfully support one person.

It’s important to work hard to keep your marriage healthy and strong. This can be achieved through active communication, romantic gestures, and honesty.

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Rebuilding Credit After Bankruptcy

Your life doesn’t end when you file for bankruptcy. There are many positives to this, such as having unsecured credit card debt discharged. There are also some negatives, mainly a major blow to your credit score. It’s not impossible to improve a bad credit score once your bankruptcy lawsuit is final.

Here is the good news.  Once your bankruptcy case concludes, you should take a hard look at the current state of your finances. Even if the court discharged some debt, you may have to still repay secured loans under a new payment plan. There may be tax issues to discuss with your bankruptcy lawyer in Scottsdale. More importantly, you should focus on your current credit score. Here are several tips for bringing it back up to what it once was:

Don’t Make the Mistake of Avoiding Credit Cards

Once you have undergone one bankruptcy, it’s easy to think that you will never use another credit card again. But this is usually noted feasible. You will likely need a credit card to improve your credit score. Not having a credit card is similar to having bad credit. A credit score reflects your reliability as a borrower. You can earn it back by proving that you are a responsible borrower to the bank. Therefore, you should keep your credit card or open a new account. However, do make payments on time. Once you keep making payments over time, your credit score would naturally improve.

Focus on Your Credit Utilization Ratio

Credit utilization ratio (CUR) is sometimes called the balance-to-limit ratio. It refers to how much credit you use as opposed to how much is left unused at the end of the month. This little number plays a major role in how fast and effectively your credit score improves. If you have a high utilization rate, this would negatively affect your credit score. If you have a $1,000 limit on your credit card, and if you use all $1,000 to buy things each month, then your CUR would be extremely high, reflected in a bad credit score. Ideally, you should keep your CRU in the 50 to 60 percent range. For the aforementioned credit card, if you were to spend only $500 or $600 a month, you would have a roughly balanced ratio that would work to your advantage.

Pay Off Majority of Credit Card Balances Each Month

Pay at least 75 percent of credit card balances each month. Ideally, you should repay it all back. Maintain your CUR with payments on time. Keep in mind to never max out the credit limit.

Use a Secured Credit Card

A secured credit card is similar to a regular credit card, but there’s a cash collateral required to obtain one. You will receive one of these after making a security deposit. These cards are designed to help those with bad credit gain positive credit scores. Unlike with regular credit cards, banks typically make payment information about secured credit cards available to credit agencies without delay. Therefore, you can rebuild your credit faster with a secured credit card.

It’s also advisable not to borrow money, such as for a loan, until your credit score is at an ideal level. And don’t rush to increase your credit score either, as it can bac-kfire. Develop an actionable strategy that works best for you to gradually improve your credit score after bankruptcy.

Bankruptcy is a bridge to your new future.  Let Canterbury Law Group take you there and create your future!

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