Many think that bankruptcy is the final station on the train to financial ruin, but statutes under Title 11 of United States Code sets forth provisions that can help one maintain hope and bounce back. An individual struggling under the duress of debt can typically file for bankruptcy either under Chapter 7 or Chapter 13. Under Chapter 13 bankruptcy, an individual has the opportunity to reorganize their finances and avoid losing their assets. It enables someone with a regular source of income to propose a plan to repay their creditors over a three- to five-year period, and the courts have the power to approve the plan without the approval of the lenders as long as it meets certain requirements. This is in contrast to Chapter 7, which provides for discharge of certain debts and liquidation of non-exempt assets without giving any rights towards coming up with a plan of reorganization.
There are a total of six types of bankruptcies defined under Title 11 of the United States Code. While some of them deal with corporates, municipalities, international debtors and farmers or fishermen, the most common types of bankruptcy filed by individuals and small businesses fall under Chapter 7 and Chapter 13. Chapter 7 involves discharge of certain debts without repayment, whereas Chapter 13 contains provisions which allow individuals with regular wages to develop a plan to repay all or part of their debts over a number of years. Whether an individual qualifies for Chapter 7 or Chapter 13 is partly determined by their income. Chapter 7 is the most common form of bankruptcy in the US with ~65% of consumer bankruptcy filings being Chapter 7 cases.
Credit card companies make it very easy for borrowers to replace the cash in their wallet for the plastic card. Credit card companies spend billions of dollars on marketing cards to borrowers and making them appealing with cashback or airline miles. If you choose to use a credit card to build your credit score, be cautious of these common credit card mistakes.
Recent college graduates receive heavy social pressures from friends or family about when their timeframe for purchasing their first home. However, they might discover that those same student loans that allowed them to finish their studies are now holding them back from purchasing their own home. The National Association of Realtors recently published that 83 percent of the non-homeowners state that student loan debt prevents them from buying a home.
Most of us understand that financial literacy is the key to becoming a successful adult. As adults, sometimes we wish that we learned financial literacy more in high school or younger. Now that some children are getting their education at home or through virtual sources, it could be the time to teach your children about those financial topics you wished you learned earlier in life. Wonderful lessons for children are to teach them how to earn money, spend it, and save for future purchases.