Economics Finance

Expectations are running high in the equity release market that home reversions plans could become a more popular choice in view of the current housing & economic climate.

It is common knowledge that in periods of low house price inflation, home reversions can become the favourable option as opposed to the roll-up lifetime mortgage.

The two comparable equity release schemes can experience different fortunes in such a static housing climate.

In summary, a home reversion scheme involves selling a percentage of the value of the property to the reversion company in exchange for a lease for life.

Therefore, in times of low house price growth the reversion company will not make as greater profit, as they will not benefit from the property value increasing.

In contrast, a roll-up lifetime mortgage in times of low house price inflation would suffer. Due to the nature of the plan & with the annual compounding of the interest, it would result in the ever increasing debt catching up with the property value quicker than if the house price was increasing. Continue reading ‘Are Home Reversion Schemes Turning Back the Years?’ »

If we look at the latest stock market activity, with the S&P 500 up more than 40% since the March lows, people looking for ways to repay debt are facing an interesting dilemma. Although interest in debt removal, debt elimination plans, and other debt settlement information has peaked over the last couple years, people with debt trouble should really evaluate positive ways to repay debt. Here is why.

Stock Market Returns Are Leading Indicators

We hear all of the time about leading and lagging indicators. A leading indicator tells us what is expected to happen (higher stock market returns suggest companies are expected to make more money). Lagging indicators tell us what has already happened but is only surfacing now — for instance, the statistic on higher bankruptcy filings tell us that more people were unable to repay debt. It does not mean that they cannot repay debt today, but when they filed they had no other means.

With this in mind, with so many companies expected to become more profitable going forward, it seems employment expectations should improve as companies spend on expansion and other plans. Instead of looking up debt settlement information, which will damage credit, looking at more creative ways to repay debt might make more sense. Continue reading ‘Stock Markets Gains Tell Us to Repay Debt, Not to Write it Off Through Bankruptcy’ »

If you are at a point where you are considering the possibility of declaring yourself bankrupt as a last resort to deal with debt problems, then it is probably fair to assume that the last thing in the world you want right now is another bill. For this reason, a number of people look to attempting a do it yourself bankruptcy, that is to say, they seek to go it alone without the assistance of a lawyer.

But let’s get straight to the point. A do it yourself bankruptcy is NOT feasible.

You might have heard people talking about how they went through a do it yourself bankruptcy successfully but the chances are that this was before 2005. Continue reading ‘If You Are Considering a Do It Yourself Bankruptcy, Read This First!’ »

A recent study shows that 62.1% of personal bankruptcy cases in 2007 were linked to medical expenses. Given our countries financial crisis it’s safe to say that this is an even bigger problem today in 2009. In this study released by Harvard professor Elizabeth Warren it showed that most medical debtors were middle class families that owned homes, were employed, and 75% had health insurance.

So what does this study reveal about our current health care situation? One serious illness can cause unaffordable medical expenses or a decrease in or lack of income which results in bankruptcy. Most families have nothing to fall back on if they become ill and lose their job, which consequently causes the loss of health insurance.

Most all bankruptcy debtors had some medical debt, but about half of the debtors, according to the study had mostly medical debt. While this study only encompasses a handful of bankruptcies, 2,314 to be exact, it does make sense. In 2005 laws were passed to make bankruptcy a bit harder to obtain, yet the numbers increased after a few years. Continue reading ‘Tough Times and Health Problems a Recipe For Bankruptcy’ »