Category Archives: Debt

10 financial tips for young people

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If I could go back in time, I would do certain things differently. I’m not saying I have a lot of regrets. But when I was younger, I tended to have myopic vision. For instance, it was hard to imagine that one day I would be older. Even today, sometimes I look in the mirror and wonder, who the hell is that?

I wish that, when I was younger, someone had sat me down and told me a few things. Or else I wish that I’d listened when someone attempted to do this.

If you’re young, take a seat and listen up. These gems will help you on your quest for financial success.

  1. Go to college.You may want to do something that doesn’t require a college degree. For instance, you may dream of playing professional golf or running a barn and training horses. But give serious consideration to enrolling in college anyway. Yes, it’s a major investment, but if your parents are unable to help you pay for it, makes it happen yourself, even if it means taking out loans. One way to save on costs: Go to a community college first; then transfer to a four-year university after two years.

It’s easier to get a degree when you’re young than when you have a home, family and all the adult responsibilities that go with these things. Your earnings potential increases significantly with a college degree — which will come in handy if your other dreams don’t materialize. Plus, you will likely experience a love of learning that you will never outgrow.

  1. Find your purpose.If you’re having trouble figuring out what you want to do with your life, look within. You were born with certain talents and natural abilities. You know which subjects you excel in and which ones you struggle with. Choose a career that enables you to maximize your gifts in a way that fulfills you or helps others. As you grow, your career may change along with your desires. But for now, gravitate toward a field that feels like home.
  2. Begin retirement planning with your first job.This tip is so important. If the company you work for offers a 401(k) plan, sign up at your first opportunity. If there’s no such plan, divert some of your paycheck into an IRA. Believe it or not, if you’re lucky, one day you’ll find you are older, so it’s best to be prepared. Setting up automatic contributions to either one of these retirement vehicles at a young age will help you build wealth painlessly.

Just as an example, let’s say you invest $200 a month beginning at age 25, and you earn 7 percent annually on that money. By the time you turn 65, you will have about $525,000 saved up. If you wait until you’re 35 to begin saving, assuming the same monthly investment and rate of return, you’ll have amassed less than half that amount — about $244,000. This illustration simply shows the impact that a 10-year head start can make on your savings, thanks to the magic of compounding.

By Barbara Whelehan • Bankrate.com
Read more: http://www.bankrate.com/finance/retirement/10-financial-tips-for-young-people-1.aspx#ixzz3Klf5jQGz

What Is Bankruptcy: Five Things You Might Not Know

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What Is Bankruptcy Really? Five Things You Didn’t Know About This Option

We’ve all heard of bankruptcy, whether we’ve seen it in a movie or read about in the newspapers. Bankruptcy is a means to resolve the issue of a debtor ETF, personal finance, bankruptcy, personal debt, being unable to repay his or her debts. You may not know anyone who’s been through the bankruptcy process, but the fact of the matter is it can happen to anyone. Here are some things about filing for bankruptcy that you may not have known.

1. You don’t necessarily need to give away your assets

Not all types of bankruptcy involve giving away your assets like most people believe. One type of bankruptcy lets you keep them, specifically Chapter 13 bankruptcy. Chapter 13 bankruptcy involves creating a repayment plan so that you’ll be able to repay your creditors without giving up the assets you require.

2. Bankruptcy does not release you from all debt obligations

There are certain types of debt that are impossible to discharge through bankruptcy. The most commonly known type is student loan debt, but those who’ve been through divorces also won’t be able to discharge payments to spouses or children of spouses. Some types of money owed to the government, like fines or recent back taxes, also must be paid regardless of bankruptcy status.

3. Filing for bankruptcy requires credit counseling

The 2005 Bankruptcy Abuse Prevention and Consumer Protection Act requires everyone filing for bankruptcy to receive credit counseling. The organization providing the counseling must be approved by the government, and individuals must have taken part in such counseling in the six months before they file for bankruptcy. For those dealing with bankruptcy, bankruptcy specialists like us might be able to help.

4. Getting credit after a bankruptcy won’t be as difficult as you think

Most people believe getting credit after filing for bankruptcy is nearly impossible. As it turns out, many lenders will let you take out loans just six months after a bankruptcy if a down payment is provided, and credit cards companies are generally also willing to issue cards with which you can rebuild your credit after you file. The reason for this is that once you file for bankruptcy, you won’t be able to file again for four to seven years.

5. You can repay some of your debt, but not all types of bankruptcies require it

It’s not necessary to repay any of your debt through Chapter 7 bankruptcy, though it requires you to liquidate all your assets. With Chapter 13 bankruptcy, however, you’re required to repay some of your debt.

Most people who live within their means and don’t need to borrow enormous amounts of money with a risk of losing all or part of their income will not need to worry about bankruptcy. But for those with no other options, bankruptcy can be a means to solve the problem with advantages and disadvantages that many people aren’t aware of.

 

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Bankruptcy Signs

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There can be numerous signs of a person heading towards bankruptcy, but when times get tough, we may be too blindsided at the moment to realize it. Here are some signs that you may be heading to bankruptcy.

 

  1. Inadequate coverage for your health. Medical bills are one in the five factors of bankruptcies.
  2. Maxing out your credit cards or as some say, “wining and dining on a beer budget”. Credit card debt is one of the biggest reasons people go into bankruptcy. Sometimes, we may end up overspending and not realize it — or realize it but fail to act upon it. A good tip is to use no more than 30-40% of your available credit. This provides help in case you run into situations such as a job loss, illness, divorce, or any other threats to your income.
  3. Taking out more than you can handle on your home equity loan. Talk to a friend or a family member before taking out a credit line you’re your home. Will you be able to pay it off? Is it important? Sometimes it’s better to keep that credit line only for home improvements. If you decide to pull it out, make sure you can make your payments comfortably.
  4. No backups. If you’re living from paycheck to paycheck with little to no savings for emergencies, you can be at a higher risk for bankruptcy.
  5. Only paying the minimum on your credit cards. Because paying off your credit cards—while paying the minimum—can take 20-30 years, make sure what you’re buying now is really worth 20-30 years of paying it off.
  6. Co-signing troubles. Careful who you co-sign for, especially if you know that they aren’t so good with their own financials. It’s common factor for many bankruptcies when the person you sign for defaults, and you are held responsible by their lender.
  7. Receiving a tax lien or your home becomes foreclosed because you fail to make payments on time.

Credit Card Debt

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In 2012 Equifax reported that the Sacramento region’s credit card debt had fallen 1.4 percent. This comes as no surprise as many people decide to be more frugal and responsible with their money in tougher economic times.

“In places where the housing bust was the worst, such as Florida, California and Nevada, and in places like Detroit and Ohio where the recession was particularly deep because of a dependence on manufacturing, consumers are continuing to be prudent about using credit,” said Trey Loughran, president of the personal solutions unit at Equifax.

On average a household in Sacramento carries nearly $5,000 in credit card debt per household. This is lower than other cities in the state such as Los Angeles, San Diego, and San Francisco. Those three cities’ averages are much closer to $6,000 on average.

 

Equifax said that the total credit card debt of Sacramento fell from about $4.47 billion as of January 2012 to about $4.4 billion by January 2013. Contrast that to the $4.65 billion total regional credit card debt for January 2011. Our region’s numbers are piddling in comparison to larger cities. New York City, the number one city on the report led the country with a total credit card debt of $51.4 billion and Los Angeles came in a distant second at $35.3 billion.

 

If you have any questions or concerns about your own personal situation I would be happy to give you a FREE one on one legal consultation. You can call me at 877.442.4577 or send me an email at tgreene@tedgreenelaw.com or just visit my website at TedGreeneLaw.com.

 

Ted Greene

California Attorney and

licensed Real Estate Broker