How to Avoid Finance Charges on Credit Cards

How to Avoid Finance Charges on Credit Cards.

If you are late paying off the balance of your credit card, you will likely incur further finance charges on the balance until it is paid. The best way to avoid these charges is to pay off the balance on time. You will often get a grace period of around 21 days after receiving the bill in which to do this. If you just pay off the minimum you will be incurring more and more interest and it will take you a long time to pay off the debt.

Method 1 Clearing Your Card Balance.

1. Pay off your balance at the end of every billing cycle. The most straight-forward way to avoid charges on the balance of your credit card is to pay it off in full at the end of each billing cycle. Paying off the whole balance by the due date on your bill will mean that you do not incur any additional finance charges on the balance.

Paying the balance of on time will also help your credit rating improve over time.

2. Determine if you have a grace period. Once you receive your bill, you will often have a grace period in which you can pay it off without incurring charges. These vary depending on what credit card deal you have, so you will have to check the details of your specific account. The typical grace period tends to be around 25 days.

If your card does have a grace period, your card provider must give you at least 21 days after your bill is mailed for you to pay it off.

3. Pay off the balance within your grace period. If your card has a grace period, you must pay off the balance in full before the end of this period to avoid any finance charges. If the grace period is 21 days, make sure you pay off the balance in advance of the due date. You can make the payment up to 5pm on the last day without incurring charges.

Make your payments in plenty of time so that you don’t accidentally miss the deadline.

If you mail your payment, allow 7 to 10 days for the payment to be applied to your account.

For online banking, check with your bank. It can be the same day, or it can take three working days. It’s best to be safe, so pay it off early if possible.

4. Consider transferring the balance to another card. If you are unable to pay off the balance within your grace period, there is an alternative way to clear the balance. You may be able to transfer the balance to another credit card, with a lower APR. For example, some cards will give you 0% APR for a limited time. In this specified period you will not have to pay any finance charges, so you will be able to pay the balance off more cheaply.

If you are considering this, it is important that you are careful and conscientious with your finances.

After the 0% APR period expires you may have to pay a higher rate of interest, so you should be completely sure of the terms and conditions.

If you transfer the balance from one card to another, remember that you have not paid off the debt. Don’t do this just to free up the card to take on more debt.

Method 2 Finding the Best Credit Card Deal.

1. Choose credit cards that do not charge annual service charges. There are numerous charges and fees connected to credit cards that you cannot avoid by paying off the balance on time. These include annual fees that are incurred regardless of how much you use the card. By shopping around you can find a card that doesn’t have these unavoidable service charges.

You can search through a database of hundreds of credit card agreements that are available from a variety of companies online.

The database is available on the website of the Consumer Financial Protection Bureau here: http://www.consumerfinance.gov/credit-cards/agreements/

2. Read the fine print. It’s important that you spend some time reading up on the all small print before you sign up for a credit card. Read it again before you activate a card, and call the company if you don't understand something. Be sure you know the interest rate and how finance charges are determined. Find out if there are ways for the lender to raise the interest rate, and if anything seems questionable, avoid working with that company.

Check to see what fees there are for balance transfers.

When you use the "checks" that arrive with your bill, these are considered balance transfers and are often subjected to additional fees.

3. Determine whether there is a universal default clause. When you are looking at different credit card agreements you should note whether or not they have a universal default clause. This type of clause gives the credit card company the right to raise the interest rate on your card if you are late paying your credit card bill or any other creditor. The credit card provider can monitor your credit report and alter your rates during the contract.

This clause can also be activated for a high debt-to-income ratio.

Remember that a higher interest rate or APR on your card results in high finance charges.

If you have a card with this clause, pay all your bills on time.

Question : I have never missed minimum due date, but still there is a finance charge. Is it because of the outstanding balance, or is the bank cheating me?
Answer : In all likelihood, the bank is not cheating you. If you fail to pay the full balance due before the due date, you will pay finance charges, which usually consist of interest on the unpaid balance.

Question : If the bank is closed on the first 3 days of month, can they charge the full month's interest when you were not able to contact them previous 3 days?
Answe : Yes. Some purchases compound interest monthly, and once the month has started, you could owe interest for the next 30 days. It's just like when you mail a check: it is credited on the day it is received, which would not be on a weekend or holiday.

Question : If my account has been closed but I still have a balance, can I avoid paying the finance charge?
Answer : You can try to negotiate with the credit card company for a payment plan that doesn't involve finance charges or a lump sum payoff but typically you will continue to pay interest as long as you have a balance.

Question : Do I get a personal loan on the basis of my credit card score?
Answer : A lender will consider your credit score as well as your credit history, work history and current income.

Question : If I pay total unbilled amount before due date, can I use my credit limit the next day?
Answer : You should wait until the card issuer has acknowledged receipt of your payment.

Question : If I paid all the outstanding balance, is there any finance charges?
Answer : It's possible there are finance charges left over from before you paid off the balance. If you pay off the full balance on time, there will be no further finance charges placed on your account after that point. If you keep paying the balance down to zero on time every month, you will not see any more finance charges.

Tips.

Check your credit report annually and correct any erroneous information. Some creditors use information obtained in credit reports to increase the finance charge percentage charged.

January 18, 2020

how to avoid finance charges on credit cards

How to Avoid Finance Charges on Credit Cards.

If you are late paying off the balance of your credit card, you will likely incur further finance charges on the balance until it is paid. The best way to avoid these charges is to pay off the balance on time. You will often get a grace period of around 21 days after receiving the bill in which to do this. If you just pay off the minimum you will be incurring more and more interest and it will take you a long time to pay off the debt.

Method 1 Clearing Your Card Balance.

1. Pay off your balance at the end of every billing cycle. The most straight-forward way to avoid charges on the balance of your credit card is to pay it off in full at the end of each billing cycle. Paying off the whole balance by the due date on your bill will mean that you do not incur any additional finance charges on the balance.

Paying the balance of on time will also help your credit rating improve over time.

2. Determine if you have a grace period. Once you receive your bill, you will often have a grace period in which you can pay it off without incurring charges. These vary depending on what credit card deal you have, so you will have to check the details of your specific account. The typical grace period tends to be around 25 days.

If your card does have a grace period, your card provider must give you at least 21 days after your bill is mailed for you to pay it off.

3. Pay off the balance within your grace period. If your card has a grace period, you must pay off the balance in full before the end of this period to avoid any finance charges. If the grace period is 21 days, make sure you pay off the balance in advance of the due date. You can make the payment up to 5pm on the last day without incurring charges.

Make your payments in plenty of time so that you don’t accidentally miss the deadline.

If you mail your payment, allow 7 to 10 days for the payment to be applied to your account.

For online banking, check with your bank. It can be the same day, or it can take three working days. It’s best to be safe, so pay it off early if possible.

4. Consider transferring the balance to another card. If you are unable to pay off the balance within your grace period, there is an alternative way to clear the balance. You may be able to transfer the balance to another credit card, with a lower APR. For example, some cards will give you 0% APR for a limited time. In this specified period you will not have to pay any finance charges, so you will be able to pay the balance off more cheaply.

If you are considering this, it is important that you are careful and conscientious with your finances.

After the 0% APR period expires you may have to pay a higher rate of interest, so you should be completely sure of the terms and conditions.

If you transfer the balance from one card to another, remember that you have not paid off the debt. Don’t do this just to free up the card to take on more debt.

Method 2 Finding the Best Credit Card Deal.

1. Choose credit cards that do not charge annual service charges. There are numerous charges and fees connected to credit cards that you cannot avoid by paying off the balance on time. These include annual fees that are incurred regardless of how much you use the card. By shopping around you can find a card that doesn’t have these unavoidable service charges.

You can search through a database of hundreds of credit card agreements that are available from a variety of companies online.

The database is available on the website of the Consumer Financial Protection Bureau here: http://www.consumerfinance.gov/credit-cards/agreements/

2. Read the fine print. It’s important that you spend some time reading up on the all small print before you sign up for a credit card. Read it again before you activate a card, and call the company if you don't understand something. Be sure you know the interest rate and how finance charges are determined. Find out if there are ways for the lender to raise the interest rate, and if anything seems questionable, avoid working with that company.

Check to see what fees there are for balance transfers.

When you use the "checks" that arrive with your bill, these are considered balance transfers and are often subjected to additional fees.

3. Determine whether there is a universal default clause. When you are looking at different credit card agreements you should note whether or not they have a universal default clause. This type of clause gives the credit card company the right to raise the interest rate on your card if you are late paying your credit card bill or any other creditor. The credit card provider can monitor your credit report and alter your rates during the contract.

This clause can also be activated for a high debt-to-income ratio.

Remember that a higher interest rate or APR on your card results in high finance charges.

If you have a card with this clause, pay all your bills on time.

Question : I have never missed minimum due date, but still there is a finance charge. Is it because of the outstanding balance, or is the bank cheating me?
Answer : In all likelihood, the bank is not cheating you. If you fail to pay the full balance due before the due date, you will pay finance charges, which usually consist of interest on the unpaid balance.

Question : If the bank is closed on the first 3 days of month, can they charge the full month's interest when you were not able to contact them previous 3 days?
Answe : Yes. Some purchases compound interest monthly, and once the month has started, you could owe interest for the next 30 days. It's just like when you mail a check: it is credited on the day it is received, which would not be on a weekend or holiday.

Question : If my account has been closed but I still have a balance, can I avoid paying the finance charge?
Answer : You can try to negotiate with the credit card company for a payment plan that doesn't involve finance charges or a lump sum payoff but typically you will continue to pay interest as long as you have a balance.

Question : Do I get a personal loan on the basis of my credit card score?
Answer : A lender will consider your credit score as well as your credit history, work history and current income.

Question : If I pay total unbilled amount before due date, can I use my credit limit the next day?
Answer : You should wait until the card issuer has acknowledged receipt of your payment.

Question : If I paid all the outstanding balance, is there any finance charges?
Answer : It's possible there are finance charges left over from before you paid off the balance. If you pay off the full balance on time, there will be no further finance charges placed on your account after that point. If you keep paying the balance down to zero on time every month, you will not see any more finance charges.

Tips.

Check your credit report annually and correct any erroneous information. Some creditors use information obtained in credit reports to increase the finance charge percentage charged.

January 18, 2020

how to protect your finances when your spouse files for bankruptcy

How to Protect Your Finances when Your Spouse Files for Bankruptcy.

When your spouse files for bankruptcy, the bankruptcy should not affect your credit score. However, you may still be affected in other ways. For example, you will still have to pay off joint debts. Also, the bankruptcy trustee can seize any property your spouse owns, even if you are a joint owner. Accordingly, you and your spouse should carefully consider which bankruptcy is best for the family or whether you should pursue a non-bankruptcy option.



Part 1 Identifying Joint and Separate Property.

1. Identify all property you and your spouse own. When your spouse files for bankruptcy, they will have to list all of their property on a schedule and report it. The trustee uses this information to determine the size of the bankruptcy estate. This information is important because the trustee may be able to force your spouse to sell property in order to pay their creditors. The less property your spouse owns, the better off they will be.

Go through your possessions and estimate how much the property is worth. Also figure out who owns it.

As a spouse, you want to be on the lookout for property you jointly own with your spouse. Unless this property is exempt, it goes into your spouse's estate, which means you might lose it depending on the bankruptcy your spouse files.

2. Check if you live in a community property state. The ownership of certain property may depend on the state where you are living. Some states are “community property” states, and this means that any property you or your spouse acquired during the marriage is owned equally by both of you.

For example, you might have bought a car. In a community property state, the car is generally considered the property of both you and your spouse—regardless of whether your spouse is on the title.

The following are community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Community property laws also apply in some situations in Alaska.

Because community property laws differ, you should work closely with a lawyer in your state to identify all property that will be counted as part of the bankruptcy estate.

3. Determine ownership in a common law state. If you don't live in a community property state, then you live in a common law state. In common law states, the owner is generally the person whose name is on the title. If your name alone appears on the title, then the asset probably will not be included in the bankruptcy estate.

If both names are on the title, then you and your spouse both own half of the asset and the asset will have to be listed as part of the bankruptcy estate.

The trustee might be able to force a sale of the asset if they can convince the judge that the benefit of selling the asset outweighs any detriment you will face. However, the trustee will still have to pay you the full-value of your half of the asset. The trustee can only use the portion your bankrupt spouse owned to pay their creditors.

4. Check if you own your home in “tenancy by the entirety.” This is a form of ownership in which the asset is owned by the marriage. Many couples own their home in tenancy by the entirety. Depending on your state, assets owned in this manner are exempted from the bankruptcy estate.

5. Identify bankruptcy exemptions. You can exempt property from being counted as part of your spouse's estate. Each state has bankruptcy exemptions which you can use. The federal government also has a list of exemptions. In some states, you can choose between the state or federal exemptions, whereas other states will require that you use the state exemptions.

In Missouri, for example, you can exempt up to $15,000 in a home that you live in or up to $5,000 in a mobile home. You can also exempt up to $3,000 in a motor vehicle.

Say you and your spouse jointly own a car in Missouri. If the car is worth $16,000, then your spouse has $8,000 in the car. Only $3,000 is exempt. Accordingly, the trustee might want to sell the car and use the $5,000 to pay off creditors. If the trustee sells the car, they must pay the spouse who didn't file for bankruptcy $8,000.

In some states, you can double an exemption if you file a joint bankruptcy petition so long as you both own the property. For example, if the state allows you to exempt $3,000 in a car, then you can exempt $6,000 if you and your spouse own it together.

6. Avoid transferring property. You might think you can protect your assets by having your spouse transfer them before filing for bankruptcy. If you live in a common law state, you might think you can make the transfer into your name so that you hold title to all of the family property and your spouse holds only the debts individually. Unfortunately, this tactic won't work.

Instead, your spouse must report all transfers. If your spouse transferred the property during the two years before they filed for bankruptcy, then the trustee can get the property back.

Your spouse will also get in trouble if they try to hide the transfer. Everyone files a bankruptcy petition under penalty of perjury. If caught lying, your spouse could be prosecuted and have the entire bankruptcy cancelled.



Part 2 Handling Joint Debts.

1. Identify your joint debts. You and your spouse might have joint debts. This means that you both have agreed to be 100% responsible for the full debt. Accordingly, if your spouse files for bankruptcy, you are not relieved of your responsibility for the debt. Although your spouse will have their obligation discharged, your obligation will not be. You will still remain responsible for the entire amount. Joint debts can be formed in the following ways.

You and your spouse took out the debt together.

You cosigned on a loan for your spouse.

You live in a community property state and you or your spouse took out a debt during the marriage.

2. Continue to make payments on your joint debts. If you have a joint debt—say, for your car—then you must continue to make payments on it, even if you are the spouse who didn't file for bankruptcy. If you stop, then your credit score will take a hit because your missed payments will be reported to the credit reporting agencies.

3. Consider filing a joint bankruptcy petition. You have the option of filing for bankruptcy along with your spouse. By doing so, you can discharge joint debts.[12] After a discharge, neither you nor your spouse is responsible for the joint debt.

Of course, a bankruptcy stays on your credit report for several years, and neither you nor your spouse will probably be able to secure new credit in the near future.

Nevertheless, a joint bankruptcy can be an excellent option if you have high joint debts which you have no way of paying off in the future. A joint bankruptcy can free you and your spouse of these crushing joint debts.



Part 3 Choosing the Right Bankruptcy.

1. Identify the different types of bankruptcy. U.S. law provides many different types of bankruptcies, but the two most common for individuals are Chapter 7 and Chapter 13. You should analyze which is best for you, depending on your circumstances.

Chapter 7. This is called a “liquidation” bankruptcy. In a Chapter 7, your spouse can wipe out all of their debts. However, in order to get that benefit, they generally must sell non-exempt property and use the proceeds to pay their creditors.

Chapter 13. In a Chapter 13, the debtor gets to keep their property. Instead of selling it, they will pay back creditors for three to five years. At the end of the repayment period, any remaining unsecured debts (like credit cards) will be forgiven. Chapter 13 is a good option if you have a lot of non-exempt property that is jointly owned.

Joint bankruptcy petition. A joint bankruptcy petition may be the best option if you and your spouse have large joint debts. You can file both Chapter 7 and 13 jointly.

2. Meet with an attorney. Only a qualified bankruptcy attorney can analyze your situation and identify the best course of action. You should get a referral to a bankruptcy attorney by contacting your local or state bar association. Once you have a referral, call up the attorney and schedule a consultation. Ask how much the fee will be.

Your attorney can help you think through which bankruptcy to file—or whether a different alternative would be best.

3. Consider alternatives to bankruptcy. Your spouse should consider other options. These options might be better because they will impact your spouse's credit score less severely. Also, you don't jeopardize losing property. Common alternatives include.

Get a debt consolidation loan. Sometimes you can get a low-interest loan which you use to pay off all debts. You then have one payment to make.

Transfer debts to low interest credit cards. Many credit cards give 12-month grace periods for balance transfers. Interest doesn't accrue until the grace period ends.

Create a repayment plan with your creditors. They might be willing to work with you, especially if you mention that you are thinking of filing for bankruptcy. In bankruptcy, unsecured creditors rarely get paid back 100% of what they are owed. For this reason, they may be willing to reduce the interest rate or extend payments over a long period of time so that you don't file for bankruptcy.

Use a credit counselor. Credit counseling services can help you negotiate with creditors and then consolidate debt. These counselors also help you come up with repayment plans you can afford.



Question : If my wife files bankruptcy, what happens to our jointly-owned house? How does this affect my loan on the house?

Answer : In a bankruptcy, all your debts are listed against all your assets. If your wife does not have sufficient assets to pay for her debts, then her half of the house can be seized. It can either be transferred as an asset to a creditor, or (forcibly) liquidated. But if the bank sells your house, you have to get your share. I.e. only her share can be seized. For a detailed calculation, contact an accountant.

February 17, 2020

How to Protect Your Finances when Your Spouse Files for Bankruptcy.

How to Protect Your Finances when Your Spouse Files for Bankruptcy.

When your spouse files for bankruptcy, the bankruptcy should not affect your credit score. However, you may still be affected in other ways. For example, you will still have to pay off joint debts. Also, the bankruptcy trustee can seize any property your spouse owns, even if you are a joint owner. Accordingly, you and your spouse should carefully consider which bankruptcy is best for the family or whether you should pursue a non-bankruptcy option.



Part 1 Identifying Joint and Separate Property.

1. Identify all property you and your spouse own. When your spouse files for bankruptcy, they will have to list all of their property on a schedule and report it. The trustee uses this information to determine the size of the bankruptcy estate. This information is important because the trustee may be able to force your spouse to sell property in order to pay their creditors. The less property your spouse owns, the better off they will be.

Go through your possessions and estimate how much the property is worth. Also figure out who owns it.

As a spouse, you want to be on the lookout for property you jointly own with your spouse. Unless this property is exempt, it goes into your spouse's estate, which means you might lose it depending on the bankruptcy your spouse files.

2. Check if you live in a community property state. The ownership of certain property may depend on the state where you are living. Some states are “community property” states, and this means that any property you or your spouse acquired during the marriage is owned equally by both of you.

For example, you might have bought a car. In a community property state, the car is generally considered the property of both you and your spouse—regardless of whether your spouse is on the title.

The following are community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Community property laws also apply in some situations in Alaska.

Because community property laws differ, you should work closely with a lawyer in your state to identify all property that will be counted as part of the bankruptcy estate.

3. Determine ownership in a common law state. If you don't live in a community property state, then you live in a common law state. In common law states, the owner is generally the person whose name is on the title. If your name alone appears on the title, then the asset probably will not be included in the bankruptcy estate.

If both names are on the title, then you and your spouse both own half of the asset and the asset will have to be listed as part of the bankruptcy estate.

The trustee might be able to force a sale of the asset if they can convince the judge that the benefit of selling the asset outweighs any detriment you will face. However, the trustee will still have to pay you the full-value of your half of the asset. The trustee can only use the portion your bankrupt spouse owned to pay their creditors.

4. Check if you own your home in “tenancy by the entirety.” This is a form of ownership in which the asset is owned by the marriage. Many couples own their home in tenancy by the entirety. Depending on your state, assets owned in this manner are exempted from the bankruptcy estate.

5. Identify bankruptcy exemptions. You can exempt property from being counted as part of your spouse's estate. Each state has bankruptcy exemptions which you can use. The federal government also has a list of exemptions. In some states, you can choose between the state or federal exemptions, whereas other states will require that you use the state exemptions.

In Missouri, for example, you can exempt up to $15,000 in a home that you live in or up to $5,000 in a mobile home. You can also exempt up to $3,000 in a motor vehicle.

Say you and your spouse jointly own a car in Missouri. If the car is worth $16,000, then your spouse has $8,000 in the car. Only $3,000 is exempt. Accordingly, the trustee might want to sell the car and use the $5,000 to pay off creditors. If the trustee sells the car, they must pay the spouse who didn't file for bankruptcy $8,000.

In some states, you can double an exemption if you file a joint bankruptcy petition so long as you both own the property. For example, if the state allows you to exempt $3,000 in a car, then you can exempt $6,000 if you and your spouse own it together.

6. Avoid transferring property. You might think you can protect your assets by having your spouse transfer them before filing for bankruptcy. If you live in a common law state, you might think you can make the transfer into your name so that you hold title to all of the family property and your spouse holds only the debts individually. Unfortunately, this tactic won't work.

Instead, your spouse must report all transfers. If your spouse transferred the property during the two years before they filed for bankruptcy, then the trustee can get the property back.

Your spouse will also get in trouble if they try to hide the transfer. Everyone files a bankruptcy petition under penalty of perjury. If caught lying, your spouse could be prosecuted and have the entire bankruptcy cancelled.



Part 2 Handling Joint Debts.

1. Identify your joint debts. You and your spouse might have joint debts. This means that you both have agreed to be 100% responsible for the full debt. Accordingly, if your spouse files for bankruptcy, you are not relieved of your responsibility for the debt. Although your spouse will have their obligation discharged, your obligation will not be. You will still remain responsible for the entire amount. Joint debts can be formed in the following ways.

You and your spouse took out the debt together.

You cosigned on a loan for your spouse.

You live in a community property state and you or your spouse took out a debt during the marriage.

2. Continue to make payments on your joint debts. If you have a joint debt—say, for your car—then you must continue to make payments on it, even if you are the spouse who didn't file for bankruptcy. If you stop, then your credit score will take a hit because your missed payments will be reported to the credit reporting agencies.

3. Consider filing a joint bankruptcy petition. You have the option of filing for bankruptcy along with your spouse. By doing so, you can discharge joint debts.[12] After a discharge, neither you nor your spouse is responsible for the joint debt.

Of course, a bankruptcy stays on your credit report for several years, and neither you nor your spouse will probably be able to secure new credit in the near future.

Nevertheless, a joint bankruptcy can be an excellent option if you have high joint debts which you have no way of paying off in the future. A joint bankruptcy can free you and your spouse of these crushing joint debts.



Part 3 Choosing the Right Bankruptcy.

1. Identify the different types of bankruptcy. U.S. law provides many different types of bankruptcies, but the two most common for individuals are Chapter 7 and Chapter 13. You should analyze which is best for you, depending on your circumstances.

Chapter 7. This is called a “liquidation” bankruptcy. In a Chapter 7, your spouse can wipe out all of their debts. However, in order to get that benefit, they generally must sell non-exempt property and use the proceeds to pay their creditors.

Chapter 13. In a Chapter 13, the debtor gets to keep their property. Instead of selling it, they will pay back creditors for three to five years. At the end of the repayment period, any remaining unsecured debts (like credit cards) will be forgiven. Chapter 13 is a good option if you have a lot of non-exempt property that is jointly owned.

Joint bankruptcy petition. A joint bankruptcy petition may be the best option if you and your spouse have large joint debts. You can file both Chapter 7 and 13 jointly.

2. Meet with an attorney. Only a qualified bankruptcy attorney can analyze your situation and identify the best course of action. You should get a referral to a bankruptcy attorney by contacting your local or state bar association. Once you have a referral, call up the attorney and schedule a consultation. Ask how much the fee will be.

Your attorney can help you think through which bankruptcy to file—or whether a different alternative would be best.

3. Consider alternatives to bankruptcy. Your spouse should consider other options. These options might be better because they will impact your spouse's credit score less severely. Also, you don't jeopardize losing property. Common alternatives include.

Get a debt consolidation loan. Sometimes you can get a low-interest loan which you use to pay off all debts. You then have one payment to make.

Transfer debts to low interest credit cards. Many credit cards give 12-month grace periods for balance transfers. Interest doesn't accrue until the grace period ends.

Create a repayment plan with your creditors. They might be willing to work with you, especially if you mention that you are thinking of filing for bankruptcy. In bankruptcy, unsecured creditors rarely get paid back 100% of what they are owed. For this reason, they may be willing to reduce the interest rate or extend payments over a long period of time so that you don't file for bankruptcy.

Use a credit counselor. Credit counseling services can help you negotiate with creditors and then consolidate debt. These counselors also help you come up with repayment plans you can afford.



Question : If my wife files bankruptcy, what happens to our jointly-owned house? How does this affect my loan on the house?

Answer : In a bankruptcy, all your debts are listed against all your assets. If your wife does not have sufficient assets to pay for her debts, then her half of the house can be seized. It can either be transferred as an asset to a creditor, or (forcibly) liquidated. But if the bank sells your house, you have to get your share. I.e. only her share can be seized. For a detailed calculation, contact an accountant.

February 25, 2020