Debt Consolidation Or Personal Bankruptcy

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Consolidate Credit Card Debts
Many of us have fallen into the trap of overindulging on our credit cards. And who can blame us? We waltz through the department stores and they constantly tempt us with their seemingly never ending sales. Clearance sales, Winter sales, January sales, it goes on and on. The credit card companies rub their hands together with glee as we rack up higher and higher credit card debt at exorbitant inter... Read debt consolidation 1 article



Debt And Bill Consolidation Programs
Are you worried about your financial situation? You are confused in handling your disorganized finances? Moreover you are not familiar with financial information since you don't have any clue with many a jargons or terms? - You are not the only one to face the problem and there are debt Management Programs and Bill Consolidation companies to help the people like you to get out of this awkward situ... Read debt consolidation 1 article



Debt Consolidation Or Personal Bankruptcy
As a licensed trustee in bankruptcy in Canada, I meet with many people who explain their debt problems to me, and then they ask me if they should get a debt consolidation loan, or go bankrupt.

I answer their question by explaining the differences between debt consolidation loans and personal bankruptcy. Obviously both alternatives are methods for dealing with debt, but they have very different implications.

A debt consolidation loan is simply a loan where you use the money to repay other debts. If you have a lot of credit card debt, you could get one loan from the bank, repay your credit cards, and end up with a loan at a lower interest rate, and perhaps a reduced monthly payment, and all of your credit cards are paid.

If you file for personal bankruptcy, all of your debts are also paid, but of course you are left with a bankruptcy note on your credit report. In that case bankruptcy is not better than a debt consolidation loan.

To decide which option is right for you, do some math. If you were able to get a debt consolidation loan at a zero interest rate (which is generally impossible, but let's keep the math simple by asking the question), and you were to borrow enough to repay your debts in five years, what would be your monthly payment? For example, if you have $60,000 in credit cards that you want to consolidate, your monthly payment over a five year period, with no interest, would be $1,000 per month.

Can you afford $1,000 per month? Obviously your loan payment will be more than $1,000 per month because there will be interest as well, but if you cannot afford $1,000 per month, you clearly will not be able to afford the payment with interest either. And that's the key to the decision.

If you qualify for a debt consolidation loan, and if you can afford the payments, a debt consolidation loan is probably the correct option. If you can only afford $500 per month, a debt consolidation loan is not the correct option, because you will not be able to make your payments. You may be better off with a consumer proposal, credit counseling, or personal bankruptcy.

To answer the question for yourself, make a list of your debts, make a monthly budget, and then contact a financial advisor or bankruptcy professional to help you assess whether debt consolidation or a bankruptcy is the best option for helping you deal with your debts.

J. Douglas Hoyes is a chartered accountant, licensed trustee in bankruptcy, and co-founder of Hoyes, Michalos & Associates Inc., one of Ontario, Canada's largest personal insolvency firms providing credit counselling, consumer proposal, and personal bankruptcy services.

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Personal Debt and Relationships

For a period of almost four years, your author worked as a mortgage adviser in the UK. As you might imagine, over time all sorts of people walk through the office door.

However, there was one phenomenon that never ceased to amaze me or my colleagues and it is surprisingly common. This amazing sight?

Simply the number of people who treat their significant other poorly when it comes to money and debts.

Here is a typical scenario... A female wishes to buy a house. She has been renting or currently lives with her parents and needs to change. However, she is paying a debt each month, usually on a credit card, for a few thousand. Whilst discussing her income and expenditures, she mentions the card and that it was to pay for something (often a holiday but sometimes a rental deposit, car purchase, etc) for an ex boyfriend.

The ex boyfriend has either refused to pay anything or his share of the debt. Sometimes, he even refuses to admit that the debt exists. Fir the girl, it is easier and less painful to just put it all behind her and pay it herself.

At first, I used to think that it was just that the lady was having difficulty getting over the relationship and some poor treatment. However, as time passed and I saw this situation, or some variant, again and again, I started to realise that it probably was the ex.

What causes it, who can say? Perhaps it is purely selfish, or acts of desperation. Whatever is to blame, it certainly speaks volumes about the relationship and the person involved.

It always amazed me and my colleagues how someone, usually a man, could have such little regard or respect for a person that they had dated and obviously been close to. Of course, the post divorce finances of many are far worse. But marriage is meant to be a full partnership, till death do us part. It almost seems that some relationships are 'till debt do us part'.

Giving advice on such a delicate matter is often difficult. How do you tell someone not to spend money or help someone that they obviously love or care for? Whatever advice is given will seem mean spirited and negative. Yet, unfortunately, that is sometimes what is required. Suggesting that they 'dump' the other half is hardly likely to win you any friends!

Unfortunately, it seems that there is a small part of the population who is amoral when it comes to money and responsibility. The vast majority of us, if we owe money will work and pay it off. We are responsible and honest and keep our end of a deal.

If you are or know someone who is suffering like this, some tough love might be the only advice you can offer. It is unfortunate but true. How else can you help or be helped?




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Debt Consolidation Or Personal Bankruptcy
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