Journal of Finance and Accounting – TanasiJournal

Archive for the ‘Debt’ Category

1. Credit card companies can change almost all of the terms of the credit card by giving just 15 days notice.

We get used to credit card companies adjusting their lending rate by 1/4% as interest rates fluctuate but did you know they can alter any of the terms for any reason. For example they can increase the late payment fee and they can increase the interest rate without the need to justify it. If you are late or miss just one payment the low rate you are currently being charged can double or even treble almost overnight.

2. Credit card companies can increase the cost of a purchase months after you bought it.

If you purchased a widescreen plasma TV 3 months ago, using a card which at the time was costing 9.9% apr, and you are late with just one payment, the credit card company can charge you a late payment fee, say $40, and increase the interest rate to 29.9% apr, or even more, and there is nothing you can do about it.

They can, in effect, increase the cost of your TV months, or possibly even years after you purchased it. The TV retailer wouldn’t be allowed to do this but your credit card company can.

3. Discount offers are only good if you keep up all your payments.

Interest free balance transfers and initial periods can dissapear for any minor omission. Failure to keep to all the terms of a card will result in special terms being withdrawn and possible penalty interest being applied. If you have interest free purchases and balance transfers make sure you keep up the payments.

4. It’s not just your card payments you have to keep up.

If you miss a payment on your mortgage, or your car or any other financial payment, your credit card companies can re-assess your credit score and increase your interest rate accordingly.

If you therefore miss a loan payment on your boat or car, but still pay the payments due on your cards, you can find that your credit card interest charges jump to 2 or 3 times the original rate.

5. Credit card companies are today making record profits from you.

If you don’t pay your cards in full each month credit card companies make the majority of their profits from you and a substantial portion of that is in the additional charges they levy.

It makes little or no sense to keep money in the bank earning 5% maximum and pay 29.9% or 19.9% or even 9.9% on your cards. Pay off the card and use the card for emergencies rather than the savings. Without the card payments you will be able to rapidly replace the savings.

Without your knowing credit card companies can hold you hostage at the very time you may really need financial assistance. Don’t allow credit card companies the continuing opportunity to make record profits at your expense, and at the same time the opportunity to benefit from any misfortune.

If you can pay the balance off withing 3 to 6 months do so otherwise consider some form of consolidation loan to remove the noose credit card companies have around your neck.

Are you sick of paying interest on your monthly student loans with no end in sight? Afraid of cash-flow problems that may prevent you from paying your student loans on time? I know I was and there is a solution to this problem. It is called student loan consolidation.

What is Student Loan Consolidation?

Student loan consolidation simply means consolidating all your student loans into a single loan with a monthly payment plan. Effectively, all your previous student loans are written off and a new student loan is created which you have to pay off monthly.

Benefits of Student Loan Consolidation

Here are some of the benefits of student loan consolidation

1. Lower monthly payments

By consolidating all your student loans into one loan, you only need to pay off one loan monthly instead of several student loans monthly. Thus, your monthly payment is lower

2. Pay only one loan monthly instead of several student loans monthly

It is a lot easier if you have to manage only one student loan instead of several student loans with different payment deadlines. Also, sometimes with many student loans, you may ended up forgetting to pay one student loan.

3. Low, fixed interest rate

By consolidating your student loans, you will be able to take advantages of low, fixed interest rates. Currently, by law, student loan consolidation rates cannot exceed 8.25%. Furthermore, national interest rates are at a 40-year low therefore this is a good time to get one.

4. No credit card check or processing fees

No credit card check is required during the application of a student loan consolidation. The payment plans and terms are usually quite flexible in that they can customize it according to your financial standing.

5. Make monthly student loan payment electronically

While it is not necessary to make payment electronically, most lenders will knock 0.25% off your student loan rates if you make payment electronically. Also, using direct debit from your bank account will prevent you from forgetting to make a payment.

Sometimes it can get quite confusing as to the qualification of applying for a student loan consolidation. The official stand from the government is that students who are still in their grace period or who are still studying in school may qualify for government student loan consolidation

The government student loan consolidation nowadays are quite competitive compared to private sector, therefore I would recommend going for a government student loan consolidation. With so many benefits of getting a student loan consolidation, it is quite obvious to save money in the long run is to get one.

If you think that being bankrupt is the worst thing that could happen to you than think again! Yes you are right…Worst is yet to come, but of course you can control and eliminate that worst scenario by simply making correct decisions! Hiring a wrong attorney for filing your bankruptcy can be like a nightmare coming true!

So it is better that before hiring you do some research and make sure that you find an attorney who could really show you way attorney who could really show you way out from the bankruptcy mess!

Facts about selecting the Attorneys:

As most of the attorneys are usually overworked, they aren’t able to give ear to full details of your case. You may feel that your attorney isn’t pursuing your case the way you want him to pursue and ultimately you will feel irritated.

Many of the attorneys aren’t qualified enough to lead your bankruptcy case. So such attorneys don’t fulfill your expectations. Certificates are important indicators to judge whether the attorney is qualified enough or not.

Asking from friends won’t take you to any good lawyer, unless your friend has gone through filing for bankruptcy but it may be useful to take advice from legal professionals.

You can even go to a bankruptcy court and observe the attorneys there. Maybe during your observation, you will find some attorneys who are good enough for you.
Once you find the attorney, you can satisfy yourself completely by asking him the right questions. A short conversation can tell you a lot about the attorney you have chosen. You can ask him about his expertise and his working and consultation hours. After conversation, you can evaluate the attorney to see if that attorney is really right for you or not!

Once you select the attorney, you must discuss with him what type of bankruptcy should you file? There are eight different types for filing bankruptcy. You attorney can best point out which type suits you for filing bankruptcy.

Secondly, you need to ask him how you can file for bankruptcy. You have to file for your bankruptcy in the state where you are living. The Attorney can prepare the necessary paperwork that would be needed to present to the courts.

Thirdly, you must know the fees that are involved in the filing for bankruptcy. The total fees will comprise of the attorney’s fees plus the court fees that you need to submit to file for your bankruptcy.

Fourth, you must know where you should file your bankruptcy claim. You need to consult your attorney on how to get there and what documentation is required.
Finally you must know the after effects of filing for bankruptcy. As soon as you file for bankruptcy, creditors will receive notification from the courts and will not be allowed to contact debtor for payments. A hearing in court will be set. The case will proceed depending on type of bankruptcy filed.

Remember that this is your fight, so you have to be really involved in it and follow the case. You just cannot leave everything on the attorney!