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What is the difference between an unsecured and a secured credit card?
A secured credit card is basically a training wheel credit card. You may be a young person applying for a credit card. The credit card company may want to know why it should give you a credit card. You have no credit history at all and you are too big of a risk. So what you can do instead is get a secured credit card. You basically put like $500 or $1000 down. Over time, you will charge something and you will pay it off. The credit card company will see you as a trustworthy person. Finally, they will graduate you to an unsecured credit card where you do not have to put money down, but they basically just trust you.
According to CreditNet, an unsecured credit card is a credit card that you could apply for that does not require what they call a deposit. You will get credit limit increases over time. Sometimes you have the ask for credit limit increases, usually around every five or six months. A secured credit card is where you actually have to give the company a deposit. They have to own either a portion of the funds that you will not have access to or they have to get all of it.
Credit card options after Chapter 7
After people file for bankruptcy, they may think they will not be able to get a credit card. However, bankruptcy usually does not prevent people from getting new credit cards. A previous blog discussed the effects that bankruptcy can have on a credit score. This blog discusses the options people can pursue to get a new credit card after they file for Chapter 7.
After bankruptcy, some people may want to get the same kind of credit card they had before. Nerd Wallet says it is important for people to remember that this may not always be possible. If people did not pay off their credit cards before bankruptcy, some traditional lenders may not always be willing to open a new line of credit. If people can get the same kind of card, they may face high interest rates. However, people still have options available to them. Some people may want to get a secured credit card. With this option, people usually put down a deposit and this deposit serves as the limit they can spend. This may be helpful if people worry about overspending on their credit cards after bankruptcy.
Can bankruptcy improve your credit score?
Whether you want to buy a new car, purchase a home or even set up a cellphone plan, you likely need to have decent credit. If you struggle to pay your bills, though, your credit score may not be as high as you would like. You may also worry about ever having the financial means to improve your creditworthiness.
Credit reporting bureaus use a variety of factors to calculate your credit score. If you have a poor debt-to-income ratio or have missed payments, you may not have sufficient credit to provide for yourself and your family. While a bankruptcy filing may cause an immediate drop in your creditworthiness, it may also lead to an eventual improvement of your credit score.
Bettering your debt-to-income ratio
Before extending credit, creditors typically check to see whether you have the financial means to pay back what you borrow. Your debt-to-income ratio compares the amount you owe with your income. If you have too much debt relative to your income, you may have a low credit score. A bankruptcy filing may allow you to deal with your debt proactively. That is, if your income remains consistent while your debt falls, your credit score may gradually improve.
Why elderly bankruptcy is on the rise
Bankruptcy is a legal status where a person declares they are in a financial fix and might not be able to pay for their debts. Individuals, businesses, and even big companies file for bankruptcies all over the world.
What is alarming is the high number of older people filing for bankruptcy recently. A study by Social Research Network reveals that the number of seniors filing for bankruptcy in recent years is double the number that registered in the last 25 years.
In a bid to determine what could be causing this worrying trend, researchers reveal that the decline in pension fees and an increase in healthcare costs might be the major causes of the broke seniors. Data from the Consumer Bankruptcy project confirms that high healthcare costs could be the primary cause of the increased number of older people filing for bankruptcy.
Top divorce and bankruptcy considerations before filing
Financial struggles faced by Maryland residents can cause a marriage to fail. When the couple decides to split and file for bankruptcy to start life anew, there are a few considerations before filing one or the other. Keep in mind individuals should assess their situations carefully before making a decision.
Mediate.com recognizes the difficulties in making either decision. Depending on the type of bankruptcy a person considers filing can have a huge impact on whether they file for bankruptcy or divorce first. A Chapter 7 bankruptcy only takes a few months while a Chapter 13 bankruptcy can take a few years to resolve.
When considering which type of bankruptcy to file, look at the assets, income, situation and marital debts. Couples with too much money in income and assets may not qualify them for Chapter 7. However, amicable situations may benefit from double exemptions when filing for bankruptcy. Marital debts decided and separated during bankruptcy can help with the division of assets during the divorce proceedings.
What is the best way to avoid owing the IRS money?
No matter the time of year, it is always best to think about the upcoming tax season. Being caught unawares could result in you owing the IRS money rather than receiving a refund check.
To help, the Nest provides several ways to keep your tax bill as low as possible. Be sure to keep the following in mind, no matter the time of year.
Take advantage of all your deductions and credits
Sit down with your accountant to discuss all credits and deductions for which you qualify. This is an especially good idea if you leased a car for work, recently made upgrades to your home designed to save energy or enrolled in school.
Make changes to your W-4 form with your employer
Have you married or divorced since the last time you filed your taxes? Maybe you welcomed a new baby or simply got a promotion at work. Any major changes to your life (or your tax bracket) may require a change to your W-4 form with your employer so that you do not incur an unnecessarily high tax bill.
Understanding unfamiliar bankruptcy terms
Bankruptcy is a scary prospect for many consumers. However, it is not necessarily as bad as you might imagine. Its purpose is not to ruin your financial prospects forever. Rather, it is to help you rehabilitate your financial situation.
As a consumer, there are usually two types of bankruptcy available to you: Chapter 13 and Chapter 7. The former helps you to repay a portion of what you owe by reorganizing your debt. The latter eliminates at least a portion of your debt, and sometimes all of it, but may require you to sell some assets.
Part of the reason bankruptcy may seem intimidating is that the legal terminology associated with it is unfamiliar to you. Understanding common bankruptcy terms may give you a better idea of what to expect from the process.
- Discharge
This is the ultimate goal of the bankruptcy process. Discharge of your debts means that the bankruptcy process has completed and your creditors have received whatever payment the court has deemed appropriate.
How can I prevent medical debt?
Injuries and illness can strike just about everyone, which is why it is so important to have the right health coverage in place. However, even with health insurance, you might find yourself mired in medical debt. Here are a few ways to prevent accruing debt, even when you are covered by health insurance.
Have you ever received a medical bill that seemed much too expensive? It helps to look into each and every bill you receive to verify its accuracy. It is possible that the bill you received has errors, and without checking you may end up paying more than your treatment was actually worth. Contact your doctor or insurance company if you have questions about the charges listed on your bill. In most cases, the erroneous charges can be easily rectified and your bill can be adjusted.
You should also take steps to ensure treatments are priced correctly. While you should never sacrifice quality care for cost, keep in mind that not all clinics and hospitals charge the same for the same services. As a result, it may be possible for you to get the same procedure or test at another location for a lower cost. Being smart about healthcare costs can save you quite a bit of money, especially when you require frequent care.
Who is at risk for high medical debt?
There is no denying that the cost of medical care is way too high. One serious illness or injury can put your family in serious financial trouble. This is true even if you have medical insurance. The out-of-pocket costs seem to only be going up. This poses a huge problem for many people in Maryland who simply cannot afford medical care and end up in debt because of it.
The Kaiser Family Foundation explains that medical debt is an issue at almost every age and income level. The costs are so astronomical that even those who have high incomes and good insurance are at risk of struggling with medical debt. The problem is even worse for those in lower income brackets with many lower income individuals often having to choose between basic necessities and paying medical bills.
Many times, debt starts out with a medical emergency. This is something that requires medical attention immediately. All it takes is one surgery or stay in the hospital to accumulate debt that often is higher than what you make working in one year. It is very easy to end up with medical debt that rivals student loan debt, which is another area that causes severe financial issues for many.
What are some basic facts about discharging tax debt?
The intimidating power of the IRS can make it seem there is no way to escape the burden of mounting tax debt even with bankruptcy. However, that is not the case. It is possible to successfully discharge some tax debt by going through bankruptcy in Maryland, though it is more likely under some circumstances than others. Understanding these circumstances may be beneficial as you contemplate a possible bankruptcy.
Per FindLaw, if you are going to discharge tax debt, you are more likely to do it under Chapter 7 bankruptcy than Chapter 13. The reason is that Chapter 13 is focused primarily on repaying your debts, including tax debts you may have. Since Chapter 7 involves liquidating the assets of a person to pay off debts without a long term repayment plan, there is more latitude to discharge debts. While some tax debt cannot be discharged, it is possible to discharge some debt under Chapter 7.
Some people who cannot pay their taxes incur penalties from the IRS. To collect back taxes you owe, the IRS may seek to garnish your wages. The good news is that if unpaid taxes are discharged, the penalties are discharged along with them. This means once a bankruptcy is completed, the IRS cannot follow through with garnishment measures intended to collect on unpaid taxes.
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