Parents’ Debt Affects Kids

Parents’ Debt Affects Kids

Stress has many causes but since the economic recession in 2007, financial instability is the major cause of stress. The economic recession led to increment in unemployment and inflation thus low income and loss of monetary value. The rampant increment of goods and services prices has made financial instability more rampant in the current world. Parents have to ensure their kids acquire the basic needs at all time since the kids are dependent to them. The expectations by the kids that the parents will always provide for their needs leads to parents acquiring unsecured debts. Unsecured debts for instance credit card debts have high interest rates and short payment periods that lead to stress among the parents, as they have to pay the debts and continue providing for their kids with their low income.

The parents tend to think that their financial stress does not affect their kids but many researches portray that parents’ stress affects about 91% of kids, since financial instability is one of the main causes of stress; I believe that parents’ debts affect kids.

Ways that Parents’ Debt Affects Kids

According to Lawrence M. Berger, a professor of social work at the University of Wisconsin-Madison, secured debts tend to affect children negatively. Unsecured debts lead to stressed parents, ultimately sabotaging everything positive you do as a parent. The aim of this paper is to illustrate the ways that these unsecured debts, such being credit card debts and the effect on kids. In the study authored by Lawrence, he portrayed that parents with unsecured debts had higher levels of debt thus making them stressed and depressed more than those without unsecured debts. Children whose parents had unsecured debts were illustrated aggressiveness, anti-social behaviors and stress; whereas those without unsecured debts did not show much emotional stress and erratic behaviors.

The ‘Growing Up’ in Ireland survey states that most of the parents do not reveal their financial instability stress to their kids thus most kids are unaware of their parents’ financial problems but the inability of the parents to deal or hide their stress makes the children feel insecure, alienated and sad thus resulting to emotional and psychological problems. These claims concur with Drew McWilliams, a clinician and Chief Operating Officer at Morrison Child and Family Services in Portland, who claims that children suffering from depression, anxiety and post-traumatic stress experience these conditions due to parental negligence.

Unsecured debts as earlier discussed tend to cause more anxiety and stress to the parents, the parents may tend to work more to pay the debts thus limiting the time they spend with their kids. The sudden change of events is hard for the kids to take thus they feel neglected. Parents’ poor stress management may result to spill it over to their kids by scolding them or physical abuse thus resulting to stress to the kids. Lastly, parents’ high level of debts may result to inability to provide for the kids what they are used to thus resulting to the kids feeling unwanted and anti-social due to the status of their friends.

Therefore, it is important for parents to understand that their kids are affected by their stress thus limit issues that may stress them more than they can handle or open up to their kids on their financial instability.

Mortgage Options After Bankruptcy

Mortgage Options After Bankruptcy

If you are unable to meet your financial obligations due to unforeseen circumstances and you do not expect your financial situation to improve, bankruptcy may allow you the legal option to be discharged from your financial obligations. Many bankruptcies are caused by one-time occurrences, such as: job loss, unexpected excessive medical bills, and divorce. There are strict guidelines for mortgage financing after a bankruptcy. Individuals who have had a bankruptcy mistakenly think that they will not be able to qualify for a mortgage or to refinance their current mortgage, but depending on the type of loan, an individual may qualify in as little as one year after filing for bankruptcy. When applying for a mortgage, lenders look at several other factors besides credit scores, these include: down payment, employment history, and debt ratio.

There are 2 types of personal bankruptcies in the United States Bankruptcy Code; they include Chapter 7 and Chapter 13. The following is a brief description of each bankruptcy type and the waiting period to qualify for a mortgage.

The most common type of bankruptcy in the United States is Chapter 7. An individual must meet the requirements of the “means test” to be eligible for this type of bankruptcy. This option allows any creditor to repossess any property used as collateral on debt that will be discharged. The bankruptcy trustee may also liquidate any non-exempt property and distribute the proceeds to any unsecured creditors. There are exceptions to what type of debt can be discharged by the courts, these debts include: (1) tax liens, (2) student loans, and (3) spousal and child support. There are also limits (by state), regarding how much property can be exempted in a bankruptcy. This bankruptcy type can only be used by an individual once every 8 years. Depending on the mortgage type used, there are various waiting periods after a bankruptcy. For a Chapter 7 bankruptcy, the waiting period is 4 years for a conventional loan, 2 years for an FHA or VA loan, and 3 years for a USDA loan after discharge.

The second most common personal bankruptcy is Chapter 13. This option allows an individual to keep all their possessions and assets, but they must qualify for and accept a payment plan determined by the bankruptcy court to repay their creditors. The repayment amount is based on the individual’s income, monthly expenses, value of property, and debt being discharged in the bankruptcy. Most repayment plans are usually for a term of 3 to 5 years. Under this bankruptcy type, monthly payments are made to a trustee who oversees the completion of the bankruptcy and discharge. Unsecured debt and medical bills are not required to be repaid under this bankruptcy option. Depending on the mortgage type used, there are various waiting periods after a bankruptcy. For the Chapter 13 bankruptcy, the waiting period for a conventional loan is 2 years after discharge, whereas FHA, VA, and USDA allow financing as soon as the debtor has made 12 months of on-time payments. This is subject to court permission to obtain a mortgage if the bankruptcy has not been discharged.

When you apply for a mortgage after bankruptcy lenders will look closely at your post-bankruptcy credit history. So, it is important to keep all your payments on-time. Re-establishing credit is one of the most important factors after a bankruptcy. You should be actively involved in re-building your credit. Check your credit and scores on a regular basis, dispute any inaccurate credit, resolve any derogatory credit, open credit with secure credit cards and/or installment loans, and pay your bills on-time. Lenders will require a copy of your bankruptcy schedules and discharge paper; in addition to a thorough letter of explanation documenting the reason for the bankruptcy. Lenders will also require your credit to be reestablished with no derogatory credit since the bankruptcy. Ideally, an individual should have 1 installment loan and 2 revolving accounts (credit cards), with at least a 12 month payment history to show the lender they are able to manage their credit. For the revolving credit, it is in your best interest to keep the balance under 30% of the available credit limit, by doing this you will be maximizing your credit scores. There are other factors that lenders will use to qualify you for a mortgage after bankruptcy. These include down payment, income, employment history, and income stability. For additional information regarding mortgage financing after a bankruptcy, please contact a reputable loan officer

What to Look For With a Debt Collection Agency

What to Look For With a Debt Collection Agency

As a business, you will have or already have unpaid invoices, whether they were for a service or a product. Recovering amounts owed can be a long and bumpy road for your business, unless you hire a collection agency to handle everything for you, including keeping you legal. So what should you look for in a collection agency? Here are some details.

Avoid Headaches and Wasted Valuable Time

Hiring a debt collection agency is perhaps the best decision you can make when it comes to collecting on old debts. You have other important business tasks to handle and doing the collecting yourself can consume a lot of your important time, as well as take away your focus from more other business-related things. In fact, it could become a royal headache as you find yourself rummaging around to find documents and checking legal laws, and even getting organized.

One Size Fits All Does Not Apply

Every debt collection agency is different and some may have the offered services you need while others may not be tailored to your situation. Some may send out collection letters and make a couple phone calls and call that collection services. Others may add other features, such as handling court processes, locating debtors, making payment offers, and more. Some debt collection agecies will provide you full services inclusing legal process. They will communicate with both party and try to make an acceptable ending. That is just a couple examples, but there are many other services to consider.

Types of Debt They Handle

Debt collectors focus on specific types of debt, which means that you need one who can handle your bad debts. For instance, some focus solely on medical bills and credit cards, while others add auto loans, personal loans, mortgages, lines of credit, etc.

Their Client Database

An important thing to consider when looking at hiring a debt collector is the type of clients they retain. Some collection agencies work with big corporations while others handle small business clients. Some handle both or are better with one or the other. Some work with franchises while others work with companies that provide services like home improvement companies and landscaping businesses. When prospecting for a debt collection agency, be sure to ask what type of clients businesses they serve. You wouldn’t go to a landscaper for new flooring in the house and you wouldn’t hire a doctor to provide dental procedures. It’s the same concept with debt collectors.

Tips For Hiring A Debt Collector

Tips For Hiring A Debt Collector

It is good to look for alternative ways to collect debt from your customers. However, if all other avenues have failed, you may have to use debt collectors to get your cash. Every agency is different from the other and not every one that is right for your kind of business. Here are a few things to consider.

Some debt collectors specialize in dealing with large businesses while others deal with small businesses and households. Check in your locality for the collectors that target similar clients like the one that has defaulted. The method the agencies apply has a high likelihood of succeeding in your case.

Every state has its own regulations that cover how debt collection is done and how the agencies work. It is important to ensure that you select a firm that adheres to Fair Debt Collection Practices Act. Moreover, the firm should be bonded and licensed to work in the locality.

Sometimes the firms use very uncouth means to collect the debts. This may raise legal cases if the debtor feels that the agency has acted in bad faith. The insurance ensures that you are not held liable for hiring the agency to collect the debts. Ensure you pick a firm that has a valid errors and omission insurance. It will act as your protection if you are dragged to court.

Once you have a list of a few companies, take time to compare their costs. Different agencies use different formulas to come up with their rates. Some charge a small flat rate mostly associated with pre-collection activities. You are then charged a contingency fee that is part of the amount collected. The charge is about 20% to 30% of the amount collected. Pick a company that offers a no collection no fee model.

Some debtors tend to run away with your cash and ignore your calls. Some even skip town. If this is your situation, ask if the agency you are using has a skip tracing service. This service enables the debt collector track the defaulting client even when they have not left any forwarding address.

Just remember that you shall not receive all the cash once you have hired a debt collection agency. For this reason, it is advisable to exhaust all of the other means of collecting debt before asking for help. However, if none of the other methods work, hire a firm that will collect the debts right away

All About Medical Bankruptcy

All About Medical Bankruptcy

Food, shelter and clothing, these are the basic needs of humans to live. But with the kind of world that we have today, I think money must be part of the list that I have mentioned because almost everything as of the moment, has a price tag attached to it. It is undeniable that there are a lot of individuals today are filing a medical bankruptcy. What do this term means? Allow me to give you a full grasp as regards this matter because it is a right that is given each and every citizen of the state.

Medical Bankruptcy is actually not a legal term. If you wanted to file a bankruptcy, you need for chapter 7 bankruptcy. In this kind of bankruptcy, you need to enumerate all the debts that you have both medical-related debts and non-medical debts. Also, you have to list all the creditors that you have.

Who are the people that most of the time experience financial problems? Based on the bankruptcy statistics, the single mothers and the elderly are the ones who usually file for bankruptcy. We all know that as individuals get older, the more often they got sick. On the other hand, single mothers shoulder all the medical bills of their children. Both these situations give the elderly and the single moms’ mountainous medical bills which force them to file for bankruptcy.

One of the basic questions of the people who file for bankruptcy is that, ‘do doctors have the right to refuse on curing them?’ Well actually, that is really a good question. Based on the facts that I have collected, I have found out that doctors, especially those who are working for public hospitals, do not have the right to refuse to any patient. This statement is based on the federal law provided by the state, since the hospitals are getting subsidy from the government, they do not have the right to refuse to anyone.

Another good question asked by the citizens, ‘how can I file a bankruptcy?’ the answer is very simple. You just have to prepare all the requirements and file for it. But it must be noted that once you have filed for the bankruptcy, you cannot file for it for six consecutive years. This only connotes that you do not have any protection from unwanted and unexpected debts for the said periods.

If you are planning to file for bankruptcy, it is advised that you first consult a lawyer. If you do not have the money to pay for them, you can go to the city lawyers. Learning the basic facts and laws regarding the bankruptcy is a must if you wanted to file for it. Being knowledgeable and prepared is the key for a successful filing.

Medical Bankruptcy is not as simple as you think. Filing for one has responsibilities attached to it. It is advised that you think twice before you make any further actions. Filing bankruptcy must be your last resort.