Guide to Superannuation

Superannuation funds are a great way to invest for your retirement since it can allow you to save gradually until you retire. These funds work in a similar way as life insurance policies or pension funds. It is a scheme constructed to encourage individuals to save for their own retirement as a solution to the increasing amount of workers that haven’t saved enough for their old age and the decreasing power of the State to spend for pensions.

One can join a superannuation fund in the place where they are employed. Meanwhile, you can also decide to join and contribute to a self managed superannuation fund or Do-it-yourself (DIY) funds. DIY funds are established for a small group of people which is usually less than 5. These groups are monitored by the Australian Tax Office. It is a trust fund, and being such, the fund members or contributors are its trustees which has the responsibility for the operation of their funds and in constructing and implementing an investment strategy. The money accumulated from its members will be for the sole purpose of providing for the retirement benefits of its members and not for the personal use of any of its members. This superfund is governed by super laws and the trust deed which is a legal paper that sets out rules for creating and operating the fund. The trust deed in this fund will specify the following:

  • When contributions are allowed
  • Availing of benefits
  • Appointment of professional advisers like an auditor
  • Winding up procedures
  • The powers, duties and responsibilities of the fund’s trustees
  • The rights of the members
  • The fund’s objectives
  • Who the trustees are
  • Qualifications of a trustee
  • Manner of appointment and removal of trustees
  • Qualifications of members

This kind of superannuation is an arrangement which requires an enormous amount of time and investment skill to manage and operate profitably. The one who would lead setting up this kind of fund must be prepared to follow strict requirements stated in super laws. It is highly advisable to seek expert advice when setting up this superfund.

All kinds of superannuation funds are entitled to tax benefits such as lower income tax rate and other allowable deductions to contributions made. These funds also enjoy government benefits which even provide total permanent disability and insurance coverage for its trustees.

In general, it can be said that anyone can join a superfund even though you are not employed or you have a low income. If you don’t have a job or not earning enough, your spouse can contribute for you until you reach your retirement. Self-employed individuals can also join a super fund and claim a full tax deduction for every contribution made.

Since saving for the future is really important, you should not touch your super fund, and you are not supposed to even try to touch them until you are retired, or too ill to work. But, if you want access to all your access which includes your superannuation fund, you must need to understand the terms and conditions in a super fund. The terms and conditions in a superfund differ from one fund to another but they follow some similar basics such as:

  1. The preservation of age is the minimum age requirement before you can begin to access your superfund. The preservation of age differs from the year you were born. For those born after 1960, the preservation age is 60, if you were born before this year, you can check with your fund manager or the Australian Tax Office for more details.
  2. The benefits that you would want to access may be governed with a set of rules that determines when and how they should be released. The rules differ according to category: Preserved, Restricted non-preserved and unrestricted non-preserved. With this, you need to know what kind of benefits you want to release.  The hardest to access are the preserved benefits. The benefits that can be released as long as your employer has paid your contributions and you’re terminated from your job are restricted non-preserved benefits. Meanwhile, the unrestricted non-preserved benefits are yours to spend whenever you want.

Finally, there are other important principles in a Super Fund. These will supplement all the knowledge you gathered from what was discussed earlier. It is always important to remember these:

  • Your employer must contribute money to your super fund account on your behalf in compliance to superannuation guarantee laws.
  • The contributions made by your employer and any concessional contributions you choose to make are taxed at a minimum rate of 15% when the contributions enter the super fund.
  • If you make an after-tax contribution to your superfund, the government may put some tax-free money into your super fund depending on your level of income.
  • The money you earn from your super fund investment is taxed no more than 15%.
  • You will pay penalty tax if you make a super contribution exceeding the caps each year.
  • You are free to choose the super fund you want. If you don’t choose, your employer chooses for you.
  • Your fund must send you regular reports on its performance.

 

When you retire on or after the age of 60, you pay no tax on your superfund benefits, unless you serve as a long-term public servant.

Guide to Personal Loans

It seems like it is getting easier and easier to get in trouble when it comes to financial issues these days and our needs and wants are not getting any simpler! Tuition fees/food/rents are skyrocketing like crazy and better, grander gizmos/clothes/cars are popping out from every direction! What is a simple employee with a meager pay have to do to be happy or to pay the bills these days, right? Easy, get a personal loan! Personal loans can be life savers and the cause of your death so you better think hard about the following before you grab your coat and head to the nearest bank or lending club:

  1. What do you need the loan for? Is it absolutely necessary?
  2. If it’s not “absolutely necessary” (i.e. car, gadget, phone, etc.), will you be able to make good use of it?
  3. Can you save up and wait a little bit longer for it?
  4. How much do you earn? Can you stomach paying for the interest?

If you answer “to pay for my mortgage” or “to pay for my sister’s tuition for the university”, and “definitely yes” to question number one, don’t dash out to the door to get a loan right away. You have to know about your options.

Banks are not the only ones that can offer you loans for such cases or any kind of loan for that matter. One option would be what the financial industry call “peer to peer” lending, in this arrangement, network is key. You need to know who among the circuit offers the best rates and you also need to know a lot of people who can attest to your good records. The requirements maybe very strict on this one and it may be hard to find the right people in the beginning, but once you get into the circle and you are able to prove your good records and clear intention on paying back, you will be set. Not a lot of people know about this option and clearly, that is a shame. Peer-to-peer lending offers the lowest rates and are flexible on debt consolidations. The requirements vary from every individual or group that are willing  to give out loans, check for local lending clubs in your area to know more about the requisites.

We need to ponder more on questions 2 and 3 for a bit. We all have our wants and we all have our dream (insert very unnecessary luxury here), but the question is: will you be able to make use of it for the longest time if not forever? Or you will you just get sick of it after a couple of months? Until then you will still be paying for it. If it’s not a real good invest might as well just ditch the idea of owning whatever that is or save up for it and see how it feels to throw away hard earned money. People always mistaken material gain for happiness and this usually ends up in an unending debt cycle. Be cautious when buying things you don’t really need because they may make you very happy now but they can cause future headaches and a whole lot more.

Question number 4, how much do you earn?  This is where being mature about your finances should kick in. You have to ask yourself, “do I know how to budget my money?” and if so, “do I follow it?” This is not a very popular question to the impulsive buyer and the hoarders of unnecessary things but as I said, this is where being mature about your finances should kick in. Money and finances are not to be dealt with lightly and are not child’s play. If you have a fairly good record when it comes to budgeting and allotting payments for so and so, go ahead, avail a personal loan but if not, you might not want to get one if you can’t even make your money last ‘til the next payday. Budget your money wisely for everyday and every month so that you will be able to keep track of your bills and payments. If you are opting to get a personal loan for that new tablet PC, divide its cost plus the monthly interest to 30 days and see how much it will cost you every day. If you think your salary can cover for it go ahead. If not, try to look the other way when passing by the tablet PC store next time.

Some people avail loans with all intentions of running away from it. They think it’s their gateway pass to getting what they want or covering for what they need. This is where they are wrong. Sure it’s easy to ignore the notices and the phone calls, but your records in the loaning industry will be tarnished and the only ones who will be willing to give you a loan are those companies that give astronomical rates. This may be an exaggeration, but it has its dose of reality.

 

There are a lot of options in getting a loan these days, all you need is to think hard about what you are getting the loan for and being on top of your payments. In the loaning business, a good track record can go a long, beneficial way!

Guide to Payday Loans

If you are in need of instant cash, one of the best possible solutions is to apply for a “Payday” loan. This is also the best way to bridge the gap between when you got paid and when you will be receiving your next pay. Instead of being hassled of filling out banks documents and passing the standard requirements of a certain loan, the payday loan is the best alternative.

This loan can be used in paying for medical bills, repayment of mortgage, loans, or other payments. This can also be used to avoid the bouncing of any other check. It is an unsecured loan and it is only available for a short period. This type of loan is one of the most popular loans that people avail because of its instant availability and few complications.

In applying for this loan, it doesn’t demand much from the borrower and you don’t even need to have a good credit rating. The only thing that is required to get this loan is that you just got to have a source of regular income. Once you’ve successfully availed this kind of loan, the funds are deposited straight into the account you provide, and are available for immediate use. In addition, there are multiple online payday loan companies which make applying for a payday loan very easy and accessible.

You won’t need to deposit any cash as a down payment or security since this kind of loan is unsecured as said earlier.  The process in applying for this loan wouldn’t take you time to wait for it to be processed. It can be completed in just a few hours. The only thing that you can complain about this loan is the high interest rates placed on it. Despite this fact, people still take these loans without considering the interest rates. In addition, payday loans offered differs from bank to bank in terms of tenure of payment, amount and other details. There are banks that offer nominal interest rates and low processing fees to withstand the competition. Some banks may lend you a small amount, but if you pay on time, they can give you a bigger amount the next time you apply for this kind of loan. This is the way they determine your credibility to pay and your reliability to pay the loans.

Now, let us understand how a payday loan works. A payday loan is made to satisfy the small money needs of an employed individual in between his paydays. As its name suggests, this loan has to be repaid on the payday of the borrower. This is why it is important that the individual should be of legal age having steady income and can provide a debit account. This loan is also different from traditional loans that one can receive from a bank or another financial institution. Remember, these loans are only suited to fix a short term problem, and it is due automatically on the date of your payday.

Let’s open up the hassle free no credit check offered in this kind of loan. This is a very favorable deal for a lot of people who have a poor score, because of past accounts, charge-offs, and bounced cherubs. This aspect of the payday loan makes it a life saver have since credit scores are sensitive can drop easily just because of a late payment on your credit card.  Isn’t it a good thing that no credit checking is required in this loan?

As mentioned earlier, these loans can be availed online. Because of this, this kind of loan has become child’s play. This loan can be filled within a few minutes while sitting on your bed without waiting, interview, and no embarrassing questions asked. It’s processing and approval is made through the internet. Online payday loans are among the most popular loans. They are convenient, but is should not be used too often and not an additional source of income.

However, this kind of loan has received bad comments and many believe that this loan can make the situation worse. This is because many individuals just choose to take this loan without considering if they can pay them back or afford a small financial fee.

If you feel that you are able to repay this kind of loan in time, you will highly benefit with a payday loan since it can help you save money from late fees and reconnection charges a disconnection can cause. You will be thankful that this kind of loan is offered when an unexpected problem arises, and especially if you have nowhere else to turn.

My advice when getting a payday loan is that you should only use it as source for immediate requirement and practice taking payday loans intelligently. Make sure to have a plan and foresee the possible difficulties in taking this kind of loan.

Guide to Home Loans

First mortgage, Second Mortgage, Refinance loan, Home equity loan, what do these all mean? We will go into detail about these later but first we must understand what a Home loan is. A Home loan would generally mean that you will be using your real estate asset as collateral for a loan that you might want or need to get. It is like saying, “If I don’t make my payments for my loan, you can claim my house as a form of payment” to your creditors. Now, as I have mentioned above, there are a lot of types of home loans that you might want to acquaint yourself with if you are interested in availing one since you would want to find the one that fits your needs and your capabilities to pay. Let’s start with the definitions:

First mortgage

The basic and most sought after form of home loan for starting families. It is when you are putting the house you want to buy as collateral, your financing firm will cover the cost of the house but you have to pay them back or else your dream home will be foreclosed. This is the most flexible and also one of the most endearing of all types of home loans because it offers flexible payment schemes and also big discounts. There are some companies who offer 100% coverage so keep an eye out for those.

Second Mortgage

A form of second loan to your home, this comes with a higher interest. If you are not able to make payments to your first and second mortgage, your second mortgage won’t be able to take claim of the property (your house).

Refinance loan

This is the type of loan that pays your original loan. Meaning you avail this form of loan to pay for the loan that you have. This buys you nothing but time.

Home equity loan

This withdraws equity from your loan and can also finance different things such as cars. These are the fastest ones to get and are appealing because of its financing aspect.

There are a whole lot more forms of home loans that you can avail and make use of in the market but when putting the roof above your head in the line, you need to make sure that you will be able to be on top of the bills or risk getting foreclosed. Getting the right type of advice from your administrator or different home loan providers will give you a better insight when it comes to availing these types of loans and making the most out of your assets.

Home loans are the most popular type of loans as it makes use of the most accessible asset of everyone but it can also be the most risky. Losing your house would be the last thing you want to do to your family, you wouldn’t want to find yourselves making a home out of the shade or under the bridge, would you? Many people today opt to just lose their house altogether because they can’t keep up with the payments anymore. Home loan creditors are predators on the pounce once you miss a payment on your plan, that is why before entering such agreement you have to make sure that you will choose the one that will custom fit your needs, capabilities to pay and your monthly income flow. This is also the number one reason why people are being put out on the street, payments reaching until your neck won’t exactly put you to sound sleep at night.

Be transparent about your income and your needs to your creditors. Make sure you find the firm that is the most understanding and the most flexible when it comes to payment arrangements. There may not be a lot of other routes for secured loans such but they can be fairly cooperative with their clients. What you have to do is to make sure that the plan you avail in the beginning is something you will be able to withstand until the end of the agreed period of time. And pay for what you owe as well.

Unlike personal loans and other unsecure loans, you can’t run away quite so easily from home loans as doing so would only make it easier for them to retrieve your property. That is why you need to think very hard before thinking of availing this particular form of loan and make a projection of what this can do to your finances in 5 to 10 years time. If it will put you and your family’s finances in limbo and it’s not absolutely necessary, opt to save up for your dream home instead! It still is a home sweet home if you don’t have payments to worry about, isn’t it?

Guide to Debt Consolidation

So you are in over your heads in debt and you are dodging bankruptcy with the accuracy of a 2 year old, what do you do? Do you run to a remote island in Asia and change your name? I don’t think that is how a mature adult should think. You should take control of the situation and know your options! Running away from your debts may be easy but they won’t be lulling you to sleep in this lifetime. There are service providers who are out there to help you out in forms of consolidating your debts, what is this, you ask?

Debt consolidation is where you apply to have your debts collated and then reduces to its minimum interest rate and you are given an easier monthly payment schemes for your multiple debts. It’s as simple as that. Your debt consolidating manager will look for ways to reduce your penalty fees and interest rates to its all time minimum. It’s a bargaining deal being done for you by your assigned consolidating manager. Sounds like a pretty good deal? Someone doing all the nitty-gritty work for you, eh? Well this is not without a catch; in order for you to be approved of this debt consolidation, you must give a collateral to your service provider. If you don’t make out your payments right, you will lose your collateral. Don’t think that you can use any old heap of trash lying around the garage for your collateral, though. Your records and application will still be evaluated before you will be able to get on with the program. It is best if you choose your house, real estate, car or any other asset you may have. This will also be the overhanging threat for those who are not planning on paying back, as it may result to you loosing the roof above your head.

Applying for debt consolidation would mean that you are involving yourself with yet another loan under your belt and if you screw this one up, it will all spiral out of control and you might just lose your house earlier than expected. It has its risks and it has its luring qualities, but if you are resorting to this endeavor to put you out of your financial misery and you swear on your life that you will do better with your finances, then you can very much take the plunge on this one. You have to be smart, not only about the finances from the time of application but in choosing your service provider as well. Don’t jump in right away; do your research and discuss all concerns with your manager.

As an interested applicant, before getting into another agreement involving your finances, you have to digest them first on your own. Look as to what types of debt you have; are they mostly secured or unsecured debts? If they are the latter, they can be settled in consolidations. But if it is the former, there will be no other way of paying them off and settling them but by having your assets taken away. Look into the timeline of your debts and mark out the ones with the most damage. Which one is the oldest? Has it accumulated sky high interest rates? Which one has the highest principal not to mention interest? Put those on the priority list.

Bankruptcy is not what your creditors want and that is most definitely not what you want. When you file for bankruptcy, your creditors won’t be receiving your payment for the debt and you will be on the one way train to marginal living. That is why they would rather you settle your payment in lesser value rather than not to receive anything at all.

Once you have digested your lists of debt make sure to do more research on the companies that you will go to for help. Debt consolidation can help you as much as it can drive you out of your house. Apply wisely and do your best to be on top of your finances from now on! Hard work pays off and so do your overtime. Debt consolidating companies may try to lure you in with too good to be true rates so don’t go jumping for the first one that you see, ask around and see how the company manages its clients and how they handle their businesses with them so as to get a feel of what is coming up next!

Guide to Debt Agreements

Most of the people who are struggling with their debts and finances are no longer aware of the options that they have. Sometimes they have difficulty looking for ways to pay their debt. What they don’t understand is that there are services out there that will help them gain their financial equilibrium again.This is where debt agreement programs come in.

Debt agreement is a form of contract that you get into together with your administrator in order for the interest rates of your unsecured debts to be frozen for a certain amount of time and make you pay for the principal amount of what you owe. Sounds easy enough, right? Yes, but there are strict requisites to such a contract and it demands for you to be completely honest about what you owe and how much you are earning. If you are thinking of applying for a debt agreement, make sure to secure the following:

  • An administrator
  • A proposal

Your administrator will serve as the mediator between you and your creditor. He will digest your finances and provide a projection of them so as to better convince your creditors to approve your application. You will have to pay for your administrator, which is why you have to choose wisely and discuss as to when and how much you will be paying him/her. You are, after all, hiring him because you are in a financial rut. Like availing the services of a doctor or a lawyer, you have to pay your administrator with the acceptance/professional fee and of course, the administration fee. You have to look for one who is duly registered and who will be flexible and understanding of your financial situation. You wouldn’t want to hire someone who will put you into more debt, after all.

Your debt agreement will be your second chance at getting back on top of your finances but they will not be without its toll. Aside from the payment you have to make with your administrator, it will also reflect in your records and stay there for at least seven years. Expect that those from the loaning business will be wary of your application and it won’t exactly be cherry picking when you try to apply for a loan within that time frame.

Your proposal is something you should closely map out with your administrator. Look at it as your pass to getting that debt agreement which in turn will help straighten your finances out. You must know all of the terms and clauses going in on these sheets of paper as this will be your bargaining tool with the creditors of course. Your creditors would rather have you pay for the principal amount of your debt rather than receive nothing at all. Bargaining on paying back shouldn’t be so hard. You have to know all of the terms being put into the proposal so that you won’t be shocked or appalled with the amount that you have to pay for every month within the period agreed upon. You have to make sure that you are sure you can pay for the agreed upon amount or else you will be risking putting yourself into greater debts. Don’t bite off more than you can chew this time around.

A lot of firms will offer out their services but I always suggest that you look around for firms with the most flexible and understanding terms and conditions. You will be working with your administrator for an extended amount of time that is why it is absolutely necessary that you find someone who will be able to work with you through the rough and smooth times of this process, look at it as looking for your financial soul mate/fixer upper.

At the sight of trouble or if you have a feeling that you will not be able to meet up with the monthly payment that you initially agreed upon, make sure to contact your administrator right away so as they will be able to amend the agreement to better suite your situation. Don’t make promises you can’t keep on this one because this can damage your already damaged record and that will drive you out of your house faster than you can say “I swear to never borrow a single cent in my entire lifetime”.

 

Debts are hard to come on top of but don’t think that once you are behind your fees and your interests are shooting up that you can’t fix it anymore. Knowing what your choices are and making better decisions this time around will help you come on top of your bills and regain security for you and your family.

Guide to Business Loans

Putting up a business is a very crucial decision since you will need a lot of resources such as funds, market, and advertisements. One of the most difficult issues for any business, big or small, is raising funds for projects. Many of us aren’t capable of shelling out enormous amount of cash in one sitting. We would need other sources more than just our savings. A very useful source that helps many business raise funds is organizations such as banks, venture capitalists and government organizations.

For many years, these organizations provide funds to businesses that have the potential to earn huge income. They provide funds either through leases or loans. In this entry, I would be discussing only about business loans. Here, you will be guided about the basics of business loans, how it works, and how it can benefit your venture into business.

Basically, business loans are also a way of borrowing money from a bank wherein a rate of interest is charged upon repayment which will depend on the length of repayment. These loans are very suitable for enterprising business people who are just starting their own company, and individuals who have existing companies needing additional resources for certain projects. These loans can address to the needs of both new and established businesses. To add, one can choose business loans from a wide range of options which differs on the rate of interest and preferred repayment needs.

You can avail either short-term or long-term loans depending on your business needs. If you would be funding short-term projects, short-term loans suit you. And if you want to acquire assets, or to expand your business, a long-term loan will best suit you.

In applying for a business loan, you can find it more difficult than applying for a personal or home loan because it is a more involved process. Here, the evaluation of requirements is done differently and the standards are stricter than the usual loan. Also, the loans offered by a bank can differ from another in loan packages, and set of terms and conditions. With this, you need to check out which bank has the best to offer. It is best to investigate the business loans being offered by the banks in your community.

In the application process of a business loan, it is normal that banks and other financial institutions will become very interested in your credit rating because this will help them decide how much money they can lend you and how much interest you will pay on the loans you avail. Credit ratings can also serve as an indication if your loan would be a high risk loan.

Now, let’s discuss what business loan could probably be offered to you by your bank. If you have an established business, your bank can offer you additional cash flows to give you funds to make purchases, to make essential payments for rent, payroll, and other expenses. If you would be starting up a new business, your bank can offer you a loan to spend for your capital.

To help you choose whether or not you should get a loan, you need to consider your business’s investment needs and the money you can invest. Your decision on how you will invest for your business will depend on the cash that you have and the investment for the business. This is because when you take out a loan, you are saving the money you have which means that your liquidity is also preserved.

It wouldn’t be hard to get great loan conditions if you have strong cash status, but it would be a lot hard to get a business loan that would be favorable to you if you are in dire need of money. This is for the fact that the interest placed on your loan and the amount you can loan will depend on your ability to pay your loan back. If your cash status is precarious, you will notice that your lender will give you a higher interest rate because they feel that they are taking more risk.

If you want to improve the chances of getting a better business loan, you need to show how much you are reliable with your loan repayments to the lender. If you have past loans, you can use it to prove yourself to the lender that you are not a risk. Show your earnings history, or a realistic assessment of your business’ potential to earn big. Another thing that would help is that if you have personally invested in your own business since this will show the lender that your interest will be the same as theirs, and you are both sharing the risks in investing for your business.

Before signing with any financial institution for a loan, grant or investment, it will be recommended that you take the advice of a business advisor who can help you discern the pros and cons of a certain loan.

Importantly, you will be responsible and liable for the payments in the loan taken. If you’re in a partnership, all partners are responsible. It is also true that if you are a company, all the directors will be responsible.

There are many flexible financial institutions that offer a variety of business loans today, so don’t give up on your dream or ideas just because you don’t have funds.

Guide to Bankruptcy

It is without doubt that most of us fear being bankrupt, and even the word itself. But many don’t even know what bankruptcy really means, and what it entails to file a bankruptcy. In this entry, I would be discussing the basics of bankruptcy and all you need to know about it. Here, the questions in your head about bankruptcy will be answered.

Bankruptcy can be defined as the state of being in the brink of losing all your assets while being in big financial debt. Yes, this is true, but there is a legal term for it. Law defines bankruptcy as a legal process wherein the person affected is provided with immediate financial relief. It can be said that a person is a candidate of bankruptcy if he can no longer afford to pay for his bill, and past due debts are already about to be collected. This can be really frustrating since it is really hard to figure out where to get funds while you have nowhere else to turn.

Fortunately, with the help of bankruptcy laws, bankruptcy can help the person saved from legal actions that can be filed by his creditors. This can even help the person get out of debt and help him normalize his financial status.

The first bankruptcy law was passed in the late 1500s which was derived from the word “bankus” meaning a tradesman’s table and “ruptus”, meaning to break. This law was first made to serve as a solution for the creditor solely.  And it only applied to traders wherein if you owe excess money, you can be declared bankrupt.  Nowadays, bankruptcy laws can help a debtor to formulate a plan by which he is able to resolve his debts towards his creditors. With this, an individual or an organization can file bankruptcy. Here, the debtor is enabled to get relief from his debts from the court, either partially or in full. The court may rule to impose a payment procedure that depends with the debtor’s condition.

There are different versions and loopholes pertaining to bankruptcy, and they change most of the time. As a candidate of bankruptcy, one needs to know the few basics about this law. According to this law, the candidate will be required to file an assignment of bankruptcy and notify his present creditors that he is starting to file a bankruptcy. Here, it may be required that the person would have to cash in on some things that you own to get out of debt. You may also be asked to file tax returns and attend credit counseling sessions. After the discharge process, you will be officially filed for bankruptcy. Before anything else, it would be wise to consult a legal professional when it comes to these matters.

To illustrate, here are the steps in a bankruptcy proceeding:

  1. Filing of bankruptcy petition. This is filed at court by the debtor or the creditor. If filed by a creditor, this will follow a legal complaint where you will be required to attend a hearing in court. Prior to these proceedings, you must not transfer any assets or cash to family or friends.
  2. After the petition is filed, you will be given a certain period of time to clear your debt.
  3. Once you’re officially in bankrupt status, you will cease to have any direct contact with your creditors and the government will assess your affairs. You may be required to attend an interview conducted face to face or via telephone.
  4. Usually, the time frame of a bankruptcy is 1 year. During this period, you will be allowed to incur credit, but you need to notify your creditor of your bankrupt status.
  5. Throughout the state of bankruptcy, you will need to maintain employment. When the period of your bankruptcy is over, and you have cooperated fully, your debts are removed.

Before declaring bankruptcy, you have to be careful in making this decision. Take time and consult a financial advisor if you still have other choices than declaring bankruptcy. If you take a look at your finances and see an alternative, it would be wise to take it. This decision is not an easy step, you will have to spend time to think about it, and it will require risks financially, physically, and emotionally.

Remember, once you’ve declared bankruptcy, this declaration will stay on your credit report for many years. This will make it difficult for you to make big purchases, or obtain credit cards. This is all because you are a high risk borrower since you’ve defaulted on all of your debt when you declared bankruptcy. Make bankruptcy plans the last option if you can’t really find a way out of that financial dilemma.

As you can see, going through bankruptcy proceedings is not an ideal situation. However, it would be best to file a bankruptcy rather than being in the state of financial ruin while the calls of your creditors keep your phone ringing.