The American economy has been largely built on a consumer population addicted to and reliant upon credit. Big ticket items like cars, appliances, furniture, and homes have been purchased on borrowed money for decades and it has gradually become the norm to overspend and to utilize the once sacrosanct credit cards for day to day purchases. This has spiraled outward for many people into an overall attitude toward and handling of money that has left them scrambling or unable to make ends meet. When financial obligations are greater than you can afford, it may be time to consider filing for bankruptcy protection under the chapter of the Bankruptcy Code suited to your debt and asset situation.

Making the decision to enter bankruptcy is difficult, primarily because there is a longstanding social disapproval of the practice. But as more individuals and businesses find themselves struggling to cope with unemployment, stagnant wages, and rising interest rates on mortgages, credit cards, and other financial instruments it is becoming an unspoken and necessary step for many. The matter is further complicated by intentional disinformation put forth by debt collectors and other entities and the presence of countless finance gurus and laypersons who offer their opinions unsolicited and sometimes with serious misunderstandings about the subject at hand. (more…)

For many people, it’s no big secret that declaring personal bankruptcy is not necessarily good news, that it definitely is not easy and that it comes with consequences. So as well as considering whether you have alternatives to declaring bankruptcy before you decide to do so, you also need to familiarize yourself with the potential harmful consequences and make sure you know how you will deal with them.

First of all, your financial reputation will be tarnished. Your credit record will carry information ascertaining to your declaring bankruptcy for around ten years. This is going to make it very, very difficult to obtain any kind of finance and in situations you find you are able to get credit, you will find yourself on the receiving end of very high interest rates. You can rebuild good credit, however.

You may also find that your family members and close friends have little sympathy. Many people, particularly those of an older generation, a generation before hire purchase and when everyone only bought what they had the cash for, struggle to understand credit, excessive finance and thus bankruptcy. You may also feel embarrassed about declaring personal bankruptcy and feel that relationships are strained with those who feel let down by this. (more…)

There may be no hope for Excel Airways or US banking giant Lehman Brothers, but many struggling small businesses and sole traders could still survive the oncoming recession – all they need is some good business sense and top quality bookkeeping.

Now that the credit crunch is really digging its heels in, there’s no doubt that things are going to get worse before they get better for the majority of British businesspeople. Recent forecasts warn of a winter recession, while a survey of British workers revealed that many are now experiencing sleepless nights over financial concerns.

Whilst lack of sleep may not be an effective way of safeguarding your livelihood, it is also a very bad idea for business people to ignore the problems they are facing. For those who are struggling in the current economic climate, the most important thing is to monitor the progress of their business with effective bookkeeping and to react swiftly to any warning signs.

Here are five reasons why small businesses need to put even more emphasis on bookkeeping during the recession:

1. Monitor and Control Expenses

Now more than ever, it is important to watch the level of expenditure and not to let it get out of control. Regular accounting will tell you how your expenses are running when compared to your targets, and will also allow you to compare monthly income against monthly expenditure. (more…)

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPC), brought about a few changes to the current USA bankruptcy laws, but in essence the structure of the 1978 Act remains the same.

Bankruptcy is a legal procedure that protects an individual or business that cannot pay its debts; it also protects the creditors. These legal proceedings may be:

• Voluntary, which is initiated by an individual or business unable to pay its debts.
• Involuntary: where the creditors take action, provided they prove the individual or business has debts in excess of $5,000.

Resolution

Once the petition is filed, the court will decide under one of the three following means:

Chapter 7 calls forliquidation; that is the sale of the assets of the debtor and the proceedings of the sale used to pay the claims of the creditors. Excluded from this chapter are railroads, banks, insurance companies, or government units. The act specifies that secured creditors have priority over unsecured creditors.

Chapter 11 calls for reorganization; that is the individual or business is given 120 days to present a reorganization plan that eliminates the factors that cause the distress. Such plan must be confirmed by the court. In many instances the plan works and the bankrupt individual or business comes out stronger and ready to function on its own once again. Federated Department Stores, Macy’s, Texaco, and some airlines are examples of reorganization. (more…)

One of the popular choices for those who need it is nothing other than the simple and basic FHA mortgage program. Way back in the 1930’s, the FHA was already the best option for low income families as well as those who were borrowing money for the very first time. But as the years passed, a lot of additions and expansions to the FHA program envelopes almost all types of people who need to borrow money.

Right now, there are roughly 30 million clients. This is undeniable proof that applying for their loan programs is really beneficial. So what are the advantages of applying for this federal program?

- This type of loan will give you leeway to purchase a house with a miniscule down payment. Future homeowners will only need to shell out a down payment worth 3% of their entire home purchase value. There are also some instances when the down payment can be given in gift form. One must be aware though that aside from the down payment amounts there are usually other fees to take care of such as insurance and processing. (more…)

Nobody likes to pay taxes and that’s a fact. But taxes are necessary for the state to fulfill its purposes and the IRS is implacable when it comes to collecting. Yet, nobody should pay more than one is obliged to and so, when it comes to calculating the exemptions, benefits and deductions on taxes it is imperative to be trained. As a homeowner you are entitled to many benefits and deductions on taxes that can provide a lot of ease to your finances. Learn what you can deduct, what you cannot and where to turn to if you have any doubts.

Home Loan Interest Tax Deduction

When you take a mortgage loan, the payment for the money owed is the interests on the loan. The interests you pay each year on your mortgage are tax deductible and thus, you can include them on your tax presentations for reducing your tax payments. Bear in mind, however, that there are certain limitations for these deductions, especially when the amounts are significantly high because the administration believes then that your payment capacity is higher and any amounts that surpass certain level are no longer deductible. For more information about this issue, you need to contact a tax advisor or certified public accountant that will be able to evaluate your particular situation. (more…)

If you’ve got a lot of debt, you may be thinking that bankruptcy is your only option. But, don’t file that bankruptcy petition just yet. These six steps may be all you need to stay out of bankruptcy and get your finances under control.

1. Write out all your monthly expenses, in detail.

Do you have a mortgage or an auto note? If so, what is your interest rate? How much are your monthly payments? What is the outstanding balance on those loans? List them, in full detail.

Next, write down all your necessary monthly expenses. These expenses include things like electricity, telephone, insurance, food, etc. You should know how much you spend each month on all of these items.

After surveying your necessary monthly expenses, take a look at your discretionary monthly expenses. Discretionary expenses are those things that are optional. You don’t have to have them. But, you may enjoy them. Representative discretionary expenses include entertainment, eating out, club memberships and any impulse buys you make in a given month. (more…)

When you are bankrupt, you have no easy way of securing a home equity loan. Your bad monetary situation and the black mark you got from the recent bankruptcy compel lenders to treat you as a less likely candidate for a loan. Even within this backdrop, if you follow the right advice and build your credit worth, lenders should not neglect your application for a bankruptcy home equity loan or a bankruptcy home loan.

The main aspect you have to work on after bankruptcy is finding ways to regain your credit worth to an acceptable level. This is vital as banks and lenders check your credit with credit bureaus before lending a bankruptcy equity home loan. If you maintain a healthy bank account and a credit card without misconducts and delays, you will reach the position you were at earlier on after about two years.

Avoid paying minimum rate to your credit card and pay cash somewhat higher than the required minimum rate and be careful to deposit it every month in time. If you have a permanent employment at one place for over a year it will also help you to gain the confidence of the lenders. Normally, interest rates for home equity loans are a little bit higher, but still considerably lower than what is paid for other types of loans.

Sometimes, you may not have a clear idea what options you have to get a loan, due to overworking yourself to raise your credit ratings. Get a loan broker if it is the case, as they know how to find a lender and all other tricks and tips of the trade. Your true bankruptcy situation should be revealed to the broker when contacting him as it helps the broker when discussing with a lender for a suitable bankruptcy equity home loan (more…)

It is a little known fact that the IRS is under a mandate from the Congress to achieve 80% electronic filing by the year 2012. The IRS Restructuring and Reform Act (RRA) was passed in 1998. In the nine years since the enactment of RRA 98, the percentage of individual e-filed returns nearly tripled, from 20 percent in 1998 to about 58 percent in 2007. There has also been steady growth in the number of self-prepared individual returns filed electronically. As the Electronic Tax Administration Advisory Committee (ETAAC) noted in its 2007 e-file report to Congress, this progress is very gratifying as it indicates that e-file is catching on with those who had previously resisted it. As per IRS data, nearly 80 million returns were filed electronically in 2007, out of which about 22.5 million were filed from home computers.

There are major benefits to filing taxes electronically. The IRS tax code is enormously complicated, and it requires considerable patience and skill to navigate the tax code in order to figure out the best possible tax situation for an individual. If one attempted to sit down with the many forms pertaining to one’s tax situation and proceed to accurately fill them out, it could be many days’ work, and even then possibly with unintended errors. This is why trained tax professionals and accountants are in such great demand during the tax season. But for an individual filer, the possibility of e-file is a heaven send. There are many quality internet tax sites managed by tax professionals that make the process of preparing an individual return straightforward and error free. All one needs is an internet connection.

The most important advantage of e-file is that the individual does not have to understand the intricacies of tax code. The rules also change from year to year, and this adds a layer of complexity to an already complex enterprise. The way most internet tax sites work is that one creates a user account with the site with a personal login and a password. The user is then asked a series of simple questions such as age, birthday, marital status, number of children, the kinds of income that the user plans to report, information from W2 forms etc. Thus, for example, the W2 form is replicated on the screen with the possibility of inputting the information exactly as it appears on the W2. Once the user has input all the information asked for by the site, the program calculates the best possible tax situation. All of the relevant information is then input into the appropriate forms and the return is electronically filed with the IRS. Once the return is filed with the IRS, an acknowledgment is usually received from the IRS within a couple of days. If there are no unintended errors, the return is accepted by the IRS. (more…)

If you are caught up in a bad debt maze and are looking out for ways to get rid of them there are couple of alternatives from filing bankruptcy. IVA is an alternative to bankruptcy filing and helps those who are in bad debt problems. If you are unable to meet your multiple loan payments, credit cards bills and are being harassed by the creditor’s collection calls then you must consider IVA.

IVA is an individual voluntary arrangement used as a financial solution to allay debts. It helps those who owe money, repay a percentage of their loan amount to their respective lenders and credit card company. This will be paid up to 5 years and any amount left after that will be nullified. In other words your pending debt after five years will be considered as settled debt. This Individual voluntary arrangement is signed in front of a licensed insolvency practitioner (IP) and the parties involved are borrower and lender. It is a formal agreement signed by both the consenting parties.

It helps to manage your debts wisely and systematically. You need not face any public embarrassment as there is nothing published in the newspaper about your debts unlike bankruptcy filing. You can still apply for another loan despite of facing an IVA. This is a distant reality in case of a bankruptcy filing, no lender will risk his loan amount. It is the most achievable and most affordable way of getting rid of debts. This agreement between the two parties, creditors and debtors will be kept confidential and private only to the parties. (more…)