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Category Archives: Get Out of Debt

How to Budget ― Without a Budget, A Practical Strategy

Most of us understand that following a budget is important. A major aspect of financial health is living within (or below) our means. This means having a budget and sticking to it. But still many of us don’t have a budget or don’t consistently follow it. Even with the best of intentions and the fanciest of budgeting spreadsheets, many of us still fail to follow through with proper budgeting.

If this speaks to you―read on to learn how to budget without a budget.

How to Budget Without a Budget, A Practical Strategy

If you’ve struggled with budgeting this simplified and practical strategy may be for you!

Even this practical strategy is not without leg work up front. It is absolutely critical that you know what your income is and are clear on the reality of your spending.

Simplified Financial Benchmarks

Instead of breaking down your budget into categories like housing, savings, food, entertainment, this simplified budgeting methods deals only with simplified financial benchmarks.

Monthly Minimum

Your monthly minimum is the actual cost of living your life, counting only necessities. You can think of your monthly minimum as your make or break number. This is the figure you must earn in income just to cover your bare bones living expenses.

  • Calculate your monthly minimum by adding up the costs of your necessities, including housing, insurance, and food. Remember to include expenses that occur annually instead of monthly. To calculate the monthly costs you can divide necessary annual expenses by twelve.
  • Once you have your minimum monthly of your actual expenses, then add in a buffer of at least 10 percent. Life necessities are expensive and prices often increase.
  • Next, add in the amount you want to save or use to pay down debt. Adding this figure to your monthly minimum prioritizes your financial goals.
  • The monthly minimum figure is also an excellent financial benchmark for people with inconsistent income to use, like business owners or freelancers.

If your income falls below your monthly minimum then you are living beyond your means. If your income is above your monthly minimum, the extra is discretionary funds that can be spent on things beyond necessities, like an evening out with friends.

Discretionary Spending Priority Point

Your discretionary spending priority point is your monthly minimum plus the monthly costs of discretionary, non-necessity expenses that are a priority to you.

To properly calculate this financial benchmark you will have to be honest with yourself about what expenses are a priority to you and what expenses you can forego. For example, paying for ice skating classes or dinners out with friends may be important to you. But when you really think about what matters to you, you may find that your gym membership or $5 daily lattes are not priority expenses.

Just as your minimum monthly accounts for annual expenses, your discretionary spending priority point should as well. Don’t forget to include the expense of giving holiday gifts or attending a friends destination wedding.

If your discretionary spending priority point is higher than your monthly income, then you are living above your means and you need to re-evaluate what you’ve included in your priority expenses.

The Kitchen Sink Point

Your kitchen sink point is what your monthly cost of living would be if you spent money just as you wanted to― if you included everything and the kitchen sink. This number includes your minimum monthly, your discretionary spending priority point, and everything else you would spend money on. It is likely that your kitchen sink point will be higher than your monthly income.

Spend Within Your Benchmark Numbers

Now that you’ve defined these three benchmark numbers, keep your expenses within these numbers. Most often keep your expenses between your monthly minimum and your discretionary spending priority point. This is how we budget without a budget.

This approach ensures that your necessities are covered, you are saving or able to pay down debt, and you still have flexibility in how your money is spent.

You will still have to track your income and the amount of your expenses to ensure you are earning enough money and not over-spending. Each month you simply compare your totals with your defined financial benchmarks. You do not have to use complex budgeting systems or adhere to spending within defined categories.

 

Are you are struggling with massive debt?

If you’re deep in debt, have fallen behind on payments, and your credit card debt is mounting, it is time to take back control of your finances.  Take an honest look at your situation. It may be time to explore all of your debt relief options, including bankruptcy.

Follow us on Facebook for money saving tips and information on how to get out of debt!

Meet with us for a free, no-obligation consultation. Call us at right now at (912) 351-9000, or email info@BrazielLaw.com. We are here to help you evaluate if bankruptcy is the right choice for you.

 

We are proud to serve people in Savannah, Richmond Hill, Hinesville, Pooler, Port Wentworth, Tybee Island, Clyo, Ellabel, Midway, and Ludowici Georgia.

We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.

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Thinking About Consolidating Your Credit Card Debt? What You Need to Know.

Trying to manage credit card debt is tough. The fact is that if you’re carrying credit card debt forward each month then you are likely to pay hundreds, even thousands of dollars in interest charges over time.

If you are in a position to pay down your credit card debt, start now. If you are only able to make the minimum monthly payments, or no payments at all, we encourage you to explore all of your options on getting your credit card debt under control.

Thinking about consolidating your credit card debt? Here’s what you need to know.

  • Consolidating your credit card debt means taking out a new loan. Your current credit card bills with be paid off by the new loan and you will be responsible for paying one monthly payment.
    • Make sure you can afford the new loan payments.
    • Make sure the interest rate on the new loan and other lending terms are more favorable than the terms of your current credit card debt.
  • If you consolidate your credit card debt and then continue to make purchases on your cards, then you are going deeper into debt. In this scenario, you are unlikely to succeed in paying down your debt.
  • Keep an eye out for promotional interest rates that only last for a short period of time. In some cases if you do not pay off the balance of the loan prior to the promotional rate expiring, you will have to pay the new, higher interest on the whole amount. Read the fine print.
  • Take the time to shop around and compare loan terms and interest rates. You want to know how much you will pay in interest and fees over the life of the loan.

 

Credit Card Balance Transfers

Many credit cards offer a zero-percent or low-interest balance transfer for a period of time. You may be thinking about transferring some or all of your credit card debt to another card offering this incentive. It is important to know how long the promotional interest rate applies. After the promotional period expires the interest rate may be quite high and your monthly payment may increase.

If you choose to do a balance transfer, avoid making new charges to that credit card until the balance transfer is paid off in full. This helps ensure you will pay off the balance and not get hit with additional interest charges.

Make paying down your credit cards a priority.

Not all debt is created equally. For example, paying a mortgage over 30 years is generally considered a wise investment. Paying on a credit card for years is not a wise financial move.

Consider this: If you owe $4,717 on a credit card with a 15 % interest rate and make only the minimum monthly payment of $189, it will take you 10 years to pay off the debt and your total repayment amount will be $22,896.

Make paying off your credit cards a priority.

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If you’re deep in credit card debt that you cannot pay off.

If you are struggling to make ends meet, and you simply do not have enough income to reasonably pay down your credit card debt, then bankruptcy might be the debt relief solution for you.

All of us at the Law Office of Barbara B. Braziel are here to help you end your financial struggle and gain financial freedom. We offer free consultations. Contact us at (912) 351-9000 today!

 

We proudly serve the people of Savannah, GA and the surrounding areas, including Richmond Hill, Hinesville, Pooler, Port Wentworth, Tybee Island, Clyo, Ellabel, Midway, Ludowici, Springfield, Pembroke, Brooklet, and Garden City.

We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.

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An Overview of Debt Relief Options

When your mailbox is stuffed with overdue bills and your phone is ringing nonstop with debt collectors demanding payment, it can suck much of the joy out of life. Being buried in debt is hard. It’s scary and stressful. It may keep you up at night with worry. It may stress you out so much that you feel debilitated and try to ignore the issue.

But when you’re deep in debt the best thing you can do is face your problem head-on. A debt problem ignored will only get worse.

An Overview of Debt Relief Options

There are a number of debt relief options available. We encourage you to explore each one and choose the one that is feasible and best for you. Remember that a true debt relief solution addresses your entire debt problem, not just a portion of it. And the debt relief option best for you is reasonable and doable.

  • Paying Off Your Debt
  • Debt Settlement
  • Debt Consolidation – Taking Out a Loan
  • Debt Consolidation – Hiring a Debt Consolidation Company
  • Bankruptcy

Paying Off Your Debt

If you have adequate income and can stick to a budget tailored to quickly and reasonably paying off your debt, then this is an excellent solution to your debt problem. So long as you can reasonably afford to pay back your debt within three years, then paying it off is likely your best option. However, if paying off your debt means struggling to pay for living necessities like rent or food, paying high interest on debts for many years, and paying off debt in lieu of having an emergency savings fund―that is not reasonably paying off your debt and we encourage you to explore your other debt relief options.

Debt Settlement

Debt settlement is settling your debts for less than the full amount owed.

This option most often requires a large sum of cash. Typically a debt settlement requires that the agreed upon amount be paid in full within a few days or weeks. Consider too if this option will address the entirety of your debt problem. Settling one or two debts of many does not address your entire debt problem. Further, debt settlement comes with potential tax consequences because “forgiven debt” is considered income by the IRS.

Debt Consolidation – Taking Out A Loan

The loan is used to pay off creditors. Then one payment is due on the loan each month.

If you can get a loan with an interest rate more favorable than your current debts, you can afford the monthly payment, and you can pay the loan back in a reasonable amount of time, then a debt consolidation loan may be a viable solution to your debt problems.

However, this option comes with a host of things that can go wrong. We caution you to carefully consider if taking out a new loan is in your best financial interests.

Debt Consolidation – Hiring a Debt Consolidation Company

A debt consolidation company will collect a monthly fee from you and attempt to make settlement deals with your creditors. Generally, these companies are paid by taking a percentage of your monthly payment off the top. They keep the rest of the funds until there is enough in the pot to make a lump sum payment on a settlement deal, one creditor at a time.

Honestly, what we typically see at our firm is that people make their monthly payment to the debt consolidation company, but ultimately none or only a few of their smaller debts get settled. Leaving them out all of the money paid to the debt consolidation company, and ultimately filing for bankruptcy anyway.

Filing for Bankruptcy

Filing for bankruptcy is a legal right that helps people erase debts and/or repay their debts over time. Bankruptcy can erase credit card debt, medical bills, and other unsecured debts. It can give you true relief from your debts and the fresh financial start you need.

Also, when you file for bankruptcy, all collection action against you must stop. It is illegal for creditors to attempt to collect from you after you’ve file for bankruptcy protection. This means collection calls stop, wage garnishments end, and lawsuits are halted.

Know that we are not in the business of talking people into bankruptcies they don’t need. We are in the business of helping people get out of debt and getting the fresh financial start they deserve. When you are deep in debt and considering solutions, you should explore all of your debt relief options. The best option for you and your family will depend on your specific situation.

The truth is bankruptcy is often the best debt relief option because the other options are simply not feasible or would take so many years to execute that they are economically damaging and would keep a person deep in debt for many years to come.

To further explore if bankruptcy is the right solution for you, read our articles:

How Can Bankruptcy Help Me?

We’re committed to helping people get out of debt and gain the financial freedom they deserve. We invite you to learn more about who we are here. If you live in Savannah, GA or the surrounding areas and have questions about your debt relief options, let’s meet for a free consultation.

Please reach out to us at (912) 351-9000 or contact us by filling out this simple web form. Follow us on Facebook for tips on getting out of debt!

 

We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.

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Savannah Bankruptcy Attorney

If you are exploring how bankruptcy can help you get out of debt, we invite you to meet with us for a free consultationcontact us on the web or call (912) 351-9000 today!

We are the premiere bankruptcy law firm in Savannah, Georgia. The Law Office of Barbara B. Braziel proudly serves the people of Savannah, GA and the surrounding areas, including Richmond Hill, Hinesville, Pooler, Port Wentworth, Tybee Island, Clyo, Ellabel, Midway, Ludowici, Springfield, Pembroke, Brooklet, and Garden City.

Relief from Your Financial Burdens

Bankruptcy is a powerful tool that can erase your debts. While choosing to file may be a difficult decision, it may be the best decision for your financial future.

We have been practicing bankruptcy law for over 35 years and often we have met clients who delayed filing until their situation became far worse than it needed to be. In many cases people spent thousands of dollars trying to avoid a bankruptcy that they ultimately needed to file anyway.

Sadly, many of our clients lost assets that they would have been able to keep if they had filed for bankruptcy sooner. Many borrowed against retirement in an attempt to manage their debt and stave off collection. In general retirement accounts are fully protected in bankruptcy. Others took out Home Equity Lines of Credit (HELOC) to pay off some creditors and ultimately risked losing their house to foreclosure.

Powerful and Positive Impacts of Bankruptcy

Our firm has helped thousands of families keep their cars, their homes, and other belongings. Erasing debt, halting all collection action, and protecting your belongings from creditors are just a few of the powerful and positive impacts bankruptcy offers. Bankruptcy can also erase certain older tax debts, give you the opportunity to catch up on missed mortgage or car payments, and can even lien strip away an underwater second mortgage.

Savannah Bankruptcy Attorney

All of us here at the Law Offices of Barbara B. Braziel are committed to helping people get out of debt and gain the financial freedom they deserve. We invite you to learn more about who we are here. If you live in Savannah, GA or the surrounding areas and have questions about your debt relief options, let’s meet for a free consultation.

Please reach out to us at (912) 351-9000 or contact us by filling out this simple web form. Follow us on Facebook for tips on getting out of debt!

 

We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.

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Tips to Get Your Credit Card Debt Under Control

Americans owe more than $1 trillion in credit card debt. According to a 2016 study, the average American family owes $8,377 in credit card debt.

While credit card debt may be common, there is a difference between carrying debt forward that you have accounted for in your budget and will pay off over a set number of months versus carrying debt forward that you are struggling to pay back.

The truth is, credit card debt can quickly spiral out of control. Follow the tips below to help you get your credit card debt under control. And if you cannot reasonably pay back your credit card debt within the next three to four years, we encourage you to explore how bankruptcy can help you get the fresh financial start you need.

Credit Card Best Practices

The best practice is to pay off your credit card bill in-full and on-time each month.

Using a credit card has many advantages, such as rewards points and other benefits like fraud protection or coverage for damage to a rental car. Swiping a credit card is easy and generally safer than cash transactions. However, swiping can be too easy, leading to overspending.

Keep Credit Card Use Under Control

Just as you must when you use a debit card, keep track of your spending when you use a credit card. The costs of necessities like gas and groceries add up. And charges for incidental and impulse purchases add up.

If you find that you are consistently charging more than you can afford to pay off in-full, stop using your credit cards for a while. Use only your debit card, which draws immediately out of your checking account, or use cash for a while. Only use your credit cards again when you are certain that you can use them without overspending.

Getting Your Credit Card Debt Under Control

If you are carrying credit card debt forward each month, now is the time to take control of your finances and handle your credit card debt.

  • Make a list of your credit card debts and the accompanying interest rates.
  • Pay down the card with the highest interest rate first.
  • Rein in your spending.
  • Do not make new charges.
  • Make paying off your credit card debt a priority.

Always Make More than the Monthly Minimum Payment

Your credit card’s minimum monthly payment is the smallest amount of your balance you can pay and still meet the terms of your cardholder agreement. If you are consistently only able to make your minimum monthly payment, it is a red-flag that you may have a serious debt problem.

As we note in our article What It Really Means to Make Minimum Monthly Payments, if you make only your minimum payment it will take years to pay off your debt, assuming you do not make new charges. Over the course of these years you will continue to accrue interest charges and you will ultimately pay back far, far more than the principal amount you charged.

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If You Are Struggling To Pay Off Your Credit Card Debt

If you are struggling to make ends meet, and you simply do not have enough income to reasonably pay down your credit card debt, then bankruptcy might be the debt relief solution for you.

All of us at the Law Office of Barbara B. Braziel are here to help you end your financial struggle and gain financial freedom. We offer free consultations. Contact us at (912) 351-9000 today!

 

We proudly serve the people of Savannah, GA and the surrounding areas, including Richmond Hill, Hinesville, Pooler, Port Wentworth, Tybee Island, Clyo, Ellabel, Midway, Ludowici, Springfield, Pembroke, Brooklet, and Garden City.

We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.

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How to Get Out of Debt

Are you struggling with debt? If so, it’s time to evaluate your debt relief options and choose the one that is best for you. We understand that if your bills have piled up, or creditors are incessantly calling you, you may feel overwhelmed and compelled to ignore the problem. But without a solid plan, your debt problem will not go away – it will get worse.

We’re here to help. We’ve complied the following list of how to get out of debt. If you have questions or want to meet for a free bankruptcy consultation, contact us here or call (912) 351-9000.

But first, a word of caution: there are a number of predatory companies that take advantage of people who just want to get out debt. If you plan to work with a company, attorney, or lender, we urge you to do your research. Check with the Better Business Bureau, Google them for reviews, and trust your instincts.

How to Get Out of Debt

If you are in debt, you have a few options on how to get a handle on it and ultimately be debt free. Not all options are suitable for everyone. When it comes to debt relief, your situation is unique and you’re empowered to choose the path that is right for you.

Options for getting out of debt include:

  • Creating a feasible plan to pay back your debts.
  • Settling your debts.
  • Debt consolidation.
  • Erasing debts through bankruptcy.

Again, not all of these options are suitable for everyone. Read on to learn more about each option.

Creating a Feasible Plan to Pay Back Your Debts

This option requires dedication to creating a budget and sticking to it. To create a plan to pay back your debts, start by making a list of all of your debts and the accompanying interest rates. Then create a list of your income and all of your expenses. Include monthly expenses as well as expenses that come up annually (like car insurance). You can divide annual expenses by 12 to get a clear picture of what your monthly expenses are. Now, it is time to create a budget and stick to it. By creating a budget you are in control of your finances and you can find areas where you can trim expenses.

Once you have a feasible budget, you know exactly how much money will be left over each month to put towards paying back your debts. Generally speaking the financial best practice is to focus on paying off debts that carry the highest interest rates first. However, if one of your debts is a small amount, you may find it helpful to pay that off first so you can feel the success of paying off a debt and be inspired to keep the forward momentum going.

If you cannot reasonably pay off your credit card or medical debts in three years, then consider the benefits of choosing another option to get out of debt.

Debt Settlement

Debt settlement is settling your debts for less than the full amount owed. Typically a debt settlement requires that the agreed upon amount be paid in full within a few days or weeks. Do you have a large sum of money to be able to pay the settlements? If not, then debt settlement is likely not the solution to your debt problem.

While debt settlement is a feasible option for some, it is important to evaluate the drawbacks of this option. For example, debt settlement may create new debt in the form of tax debts because “forgiven debt” is considered taxable income by the IRS.

If you are considering this option, read out article Is Debt Settlement Better Than Bankruptcy?

Debt Consolidation

Debt consolidation comes in two forms: taking out a loan to pay off existing debts or hiring a debt consolidation company.

The first option, entails taking out a new loan (sometimes called a debt consolidation loan) that will be used to pay off all of your existing debts. The idea is to streamline your payments and make only the one payment on the new loan every month. In some cases the interest rate on the debt consolidation loan will be lower than the interest rates on the debt being paid off.

However, if you’re going to be paying off your new loan for years to come, consider the benefits of other debt relief options.

The second form of debt consolidation is to hire a debt consolidation company. They will collect a monthly fee from you and attempt to make settlement deals with your creditors. Generally, these companies are paid by taking a percentage of your monthly payment off the top. They keep the rest of the funds until there is enough in the pot to make a lump sum payment on a settlement deal, one creditor at a time. These companies are often predatory, ineffective, and leave people worse off.

Erase Debts Through Bankruptcy

Know that we are not in the business of talking people into bankruptcies they don’t need. We are in the business of helping people get out of debt and getting the fresh financial start they deserve.

If the above options will take you many years to get out of debt, we encourage you to consider the benefits and drawbacks of bankruptcy. Bankruptcy is not the solution right for everybody, but it is an option that should not be avoided out of fear or a lack of information on how bankruptcy helps people.

Bankruptcy is a powerful legal tool to end your financial struggles. Bankruptcy has the power to:

  • Erase credit card debt
  • Erase medical debt
  • Erase most unsecured debt
  • Stops harassing phone calls from creditors
  • Stop wage garnishment
  • Stop bank freezes and levies
  • Stop lawsuits filed by creditors and other plaintiffs
  • Puts an end to all collection action
  • Allows you to keep most or all of your belongings, including your home and car (depending on your specific situation)

Carefully Evaluate Your Options on How to Get Out of Debt

Take an honest look at your financial situation and evaluate your options. Once you have all of the information, you’ll be able to make the decision that is best for you.

Follow us on Facebook to learn more about getting out of debt!

If you have questions about your debt relief options or bankruptcy call us today at (912) 351-9000 or contact us via the web to schedule a free consultation. We are here to help you get out of debt and gain the financial freedom you deserve.

For over 30-years we have proudly served the people in Savannah, Richmond Hill, Hinesville, Pooler, Port Wentworth, Tybee Island, Clyo, Ellabel, Midway, Springfield, Pembroke, Brooklet, Garden City, and Ludowici, Georgia.

 

We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.

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Should I File for Bankruptcy?

Making the decision to file for bankruptcy is not an easy one. Many of our clients express to us feelings of guilt or shame. We encourage you to think of bankruptcy as a financial decision – and if you’re choosing to file, it is because it is the right financial decision for you. Living under the weight of debt is stressful and holds you back from creating a healthy financial future for yourself and your family.

How do you evaluate if bankruptcy is the right choice for you? First, consult with an experienced bankruptcy attorney. Many bankruptcy attorneys offer free consultations, so you can learn about how bankruptcy can benefit you. If you live in the Savannah, GA area we invite you to come meet with us for a free consultation!

Second, be honest with yourself about your situation. If you are experiencing any of the following situations, then it is time that you seriously consider how filing for bankruptcy can help you and give you the fresh, debt-free start that you deserve:

  • If you are making only your minimum monthly payment on your credit cards.
  • If you have been sued for non-payment of debt, of if your wages are being garnished or bank accounts levied.
  • If you have fallen behind on your monthly bills.
  • If you are taking drastic measures just to stay current on your monthly bills, such as borrowing against your home or retirement savings.
  • If you have or are facing a home foreclosure or car repossession.
  • If you are older and have a lot of credit card or medical debt, but do not have much in retirement savings.
  • If your debt load is very large in relation to your income.

If any of the foregoing are happening in your life, it’s time to seriously consider the benefits of bankruptcy. Essentially, if you are carrying a massive amount of debt that you cannot reasonably pay off in the next three years, bankruptcy may very well be the best solution for you.

It is important for you to understand the benefits and drawbacks of bankruptcy, and to understand which of your debts can and cannot be erased in bankruptcy. While credit card debt and medical debt are erased through bankruptcy, debts such as student loans, back child or spousal support, and some other types of debts are not erased through bankruptcy.

Consult with a bankruptcy attorney to learn how bankruptcy will affect you specifically. You may be surprised to learn that many people who file for bankruptcy get to keep most or all of their belongings. You may also be surprised to learn that bankruptcy is not a courtroom battle.

Here at the Law Office of Barbara B. Braziel we will make sure you understand the benefits of bankruptcy and how filing with affect you and your family. We take the time to explain the bankruptcy process to our clients. We invite you learn more about our firm here and come meet with us for a free no-obligation consultation.

Reach out to us by email at info@BrazielLaw.com or call (912) 351-9000.

 

We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.

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How to Create a Budget

Creating a budget is the foundation for a solid financial plan. You can’t make long-term financial decisions until you understand how your income is being spent each month, and how you can reallocate your spending to reach your goals.

 

Budgeting is also a necessary part of the bankruptcy process. Before you file for bankruptcy, you will have to list all of your income and expenses to determine if a bankruptcy is truly necessary and how much disposal income you have to pay off your creditors.

 

Assess Your Financial Situation

 

You can only spend as much as you make, so you’ll need to know your income (after taxes) to get started on your budget. Then, you can plug in fixed monthly expense like rent or mortgage payments, car payments, and other payment that’s the same every month.

 

Expenses like food or entertainment are a bit more difficult to estimate. You might think you know what you’re spending, but it’s a good idea to create a spending journal or use a budgeting app to track these expenses and get accurate information on your expenses.

 

Once you’ve tracked your income and expenses, there may not be much or any room left over if you are experiencing financial difficulties. Everyone should be setting aside money for an emergency fund, but how can you if you aren’t even keeping up with your debt payments? The next step will help you figure out what you need to be doing, even if you aren’t doing it yet.

 

Understand Your Financial Goals

 

If you want to pay off your debt within five years or retire in 20 years, you have a clear goal that you base on financial decisions on. If you know how big you want your nest egg to be, you can work backwards to figure out how much you need to save each month to reach your goal.

 

Some people may have difficulty figuring out their goals or prioritizing which goal is most important. A budget consultant can help you with this process.

 

Create a Budget That Takes You Towards Your Goals

 

Once you know where you are and where you want to be, you can create a budget that puts you on the right path. However, this process can be quite challenging because you may need to make significant changes to your lifestyle.

 

You may need to cut expenses in some areas to make your plan work. You may also find that your goals are unrealistic, or that you will need more time or extra income to reach them.

 

For some people, eliminating some of their debt through bankruptcy will be the only way to create a realistic and sustainable budget. Once you’ve received a discharge, you’ll be able to stick to a sustainable budget that keeps on track to reach your goals.

 

Bankruptcy is a complex and nuanced area of law. Contact the Law Office of Barbara B. Braziel to talk about your unique financial situation and how a bankruptcy could help you.

 

We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code

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What You Need to Know About Your Credit Report

The information contained in your credit reports matters. Also, if you’ve filed for bankruptcy, how your accounts are reported after bankruptcy matters. The information in your credit report dictates your credit score, and your credit score determines your credit-worthiness. The higher your credit score, the more likely it is that you’ll be able to get loans or lines of credit with low interest rates and other favorable terms.

What Information is Included in My Credit Report?

There are a number of things a credit report may list, including:

  • Open and closed lines of credit.
  • Account balances.
  • Monthly payment history and/or missed payment history.
  • Your name and social security number.
  • Your current and previous addresses, name and address of your employer, and your income level.
  • Anywhere you have applied for credit (any party who has pulled your credit report).
  • Information regarding lawsuits, foreclosures, repossession, and whether you have filed for bankruptcy.

On-time, Monthly Payments Improve Your Credit Score

On-time, monthly payments are good for your credit score.

In fact, one way to start rebuilding your credit after bankruptcy is to have on-time, monthly payments on secured debt (like your mortgage or car payment) reporting.

Monitor Your Credit Report

It is crucial that you monitor your credit report. Whether or not you are having financial struggles, everyone should keep an eye on their credit report.

It is not uncommon for information to be misreported on credit reports. Also, it isn’t just mistakes or misreporting to be concerned about. Monitoring your credit report is a way to detect fraud and identity theft.

You Are Entitled to a Free Credit Report!

Everyone is entitled to a free credit report annually. You are entitled to one from each of the three credit reporting bureaus: Equifax, Experian, and TransUnion.

Order your free credit report(s) online from AnnaulCreditReport.com. Ordering from this site helps ensure a secure transaction. AnnualCreditReport.com is the only authorized source by federal law for free credit reports.

Credit Reporting Agencies Have A Legal Duty to Accurately Report

Pursuant to the federal Fair Credit Reporting Act (FCRA), credit reporting agencies have a legal duty to accurately report information and keep information up-to-date.

Dispute Inaccurate Information

You have the right to dispute inaccurate, incomplete, or outdated information, or other mistakes or misreporting on your credit reports from Equifax, Experian, or TransUnion. The credit reporting agency must investigate your dispute and they must correct or delete inaccurate, incomplete, or unverifiable information within 30-days.

The Federal Trade Commission (FTC) offers step-by-step instructions for disputing inaccurate information here. The FTC also offers a sample dispute letter you can use here.

 

Follow us on Facebook for tips on living debt-free!

The Law Offices of Barbara B. Braziel helps people get out of debt. We offer free consultations to people in Savannah, GA and the surrounding areas. Contact us at (912) 351-9000 today!

 

We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.

READ MORE

What It Really Means to Make Minimum Monthly Payments

The minimum payment is the smallest amount of your balance you can pay and still meet the terms of your credit card agreement. Making the minimum monthly payment allows you to avoid late fees and to have a good repayment history on your credit report.

But the truth is: if you are consistently only able to make your minimum monthly payment, it is a red-flag that you may have a serious debt problem.

It will take years to pay off your debt, assuming you do not make new charges. Over the course of these years you will continue to accrue interest charges and you will ultimately pay back far, far more than the principal amount you charged.

Carrying credit card debt forward is not a wise financial decision. If you truly can only make the minimum monthly payment, then it is time to make an honest assessment of your overall financial situation. If you cannot reasonable pay off your credit card debts within 3 years, then it is time to consider filing for bankruptcy.

What It Really Means to Make Minimum Monthly Payments

The minimum payment amount is calculated off of a percentage of the total balance. Typically your minimum monthly payment might represent as little as 1 or 2 percent of the total balance you owe. This is why it takes years to pay off a credit card making only the minimum monthly payment. This is also how credit card companies make a fortune in interest off of consumers.

Thanks to the Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009, our credit card statements are required to have a minimum payment warning. The disclosure must inform you of:

  • How many months it would take you to pay off your balance making only the minimum payment.
  • The total amount you would actually pay back making only the minimum payment.
  • The calculation is based on no new charges being made.

Many people are shocked to find out just how much making only minimum monthly payments actually costs. It is not uncommon for a borrower to pay back more than twice the amount that was actually charged to the credit card.

Paying the Bare Minimum – An Example

The following is an example demonstrating the massive cost of paying only your minimum monthly payment.

Assume you are carrying a credit card balance of $1,000 with an annual percentage rate (APR) of 18%. Assume also during this time period you make no additional purchases on the card.

  • Monthly Minimum Payment, calculated as 2.5% of your total balance: $25.00
  • Number of Months To Pay Off Debt: 63 (that’s 5 years and 3 months!)
  • Total Interest Charges During 63 Month Payback Period: $566

By paying just the minimum payment due each month on $1,000 of debt, it would take over 5 years to pay off the debt and you would ultimately pay a total of $1,566.

If you pay twice the monthly minimum payment, the repayment period is cut by more than half. In this example, if you pay $50/month it will take 25 months to pay off the credit card. You would pay a total of $1,205, saving you $361 in interest charges and getting you out of debt three years sooner!

Certainly, the best option is to pay your credit card balance in full each month. Of course this is not always possible. When you are carrying credit card debt, be diligent to pay it off as quickly as possible. As you can see in the example above, paying even just double your minimum monthly payment makes a significant difference.

Minimum Monthly Payments & Exploring Bankruptcy

Bankruptcy erases credit card debt and allows people to get out from under the weight of debilitating debt that would otherwise have lasted many years.

Bankruptcy is a powerful legal tool that can help you in many ways. To further explore how bankruptcy can help you and if it is your best debt relief option, read our articles:

We’re committed to helping people get out of debt and gain the financial freedom they deserve. We invite you to learn more about who we are here. If you live in Savannah, GA or the surrounding areas and have questions about your debt relief options, let’s meet for a free consultation.

Please reach out to us at (912) 351-9000 or contact us by filling out this simple web form. Follow us on Facebook for tips on getting out of debt!

 

We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.

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