Is Bankruptcy Different From State to State?

For individuals facing difficult financial circumstances, bankruptcy is a common solution. However, before moving ahead, it’s important to understand more clearly what it entails and what it means for you. One of the most common questions about bankruptcy is whether it is different from state to state, or whether the same laws, regulations and stipulations apply everywhere.

This is actually a two-part answer. First, the overall, basic tenants of filing bankruptcy and its different chapters and classifications is handled by federal law. That means that the actual laws which govern bankruptcy are the same everywhere.

However, from there, state laws then have an impact, largely and most importantly in the area of the types of exemptions that you are eligible for.

Exemptions are specific types of property that you are able to retain. In most cases, individuals will keep most or all of their property.

One of the best examples of the differences between bankruptcy in Maryland, DC and Virginia, for instance, is the homestead exemption. In Maryland, it’s currently set at $22,975, while in Virginia, it’s a meager $5,000, although it can be doubled for married couples. In the case of the District of Columbia, it’s unlimited. Clearly, things are handled quite differently from one local to the next which has a huge bearing on you, your finances and your property.

Additional factors which may change from state to state include whether or not married couples get to double their exemptions, and whether or not there is a wildcard exemption, and to what to degree. A wildcard exemption, for instance, provides for a specific value of additional property not exempted elsewhere to be applied.

States also control whether or not they allow individuals to use the federal bankruptcy exemptions in place of their own state’s exemptions. They do not have to do this. For instance, in the state of Maryland, generally you are not allowed to use the federal bankruptcy exemption and must use the state’s.

It’s important to work with an attorney who is familiar with your own state’s bankruptcy laws and exemptions, and how they apply to your circumstances. Additionally, if you have recently moved, it’s essential to know how that affects bankruptcy in your state. Always consult with an experienced attorney in your local area who can guide you through the process, answer all of your questions about bankruptcy in your state, and ensure you’re making the right decisions.

When You Should Look For A Good Bankruptcy Attorney

Life has its own twists. Unfortunately you are not really ready for it. There are times when you are in debt and you have to pay huge bills. Debts can keep on increasing for many reasons. The reasons are sometimes logical. It can end up becoming a huge amount of money which a person fails to pay. Now let’s discuss on the most important facts which can put you in a financial crisis.

Thanks To The Medical Bills

One of the very first things which every person fails to pay is the medical bills. Hospital bills keep on increasing depending on the kind of accident or illness you have. The worst thing is you don’t have any idea how much you have to pay. Moreover, you cannot control it. They are very expensive and a costly affair for most people.

The cost of surgeries, x-rays, emergency room visits are huge. Modern hospitals have the best medical equipment which is quite expensive. What they do is pass down the costs to the patient. This is when you need a bankruptcy attorney who can help you get out of the mess.

Credit Card Debt

Credit cards are one of the major reasons of the increasing debts. Unfortunately, people decide to get a credit card so that they can cope up with the small debts. But the purpose is not served in the right way. They prefer using the credit card during an emergency or when they have zero cash.

Credit cards are a very convenient option and you can use it when the need arises or you don’t have instant cash. The only difference is that you have to pay a price. Interest rates can also maximize your credit card debt. It adds up to the amount quickly and people find themselves in a financial crisis. Hire a bankruptcy attorney who can offer the best help.

The Right Solution To All Your Problems

For those who are encountering debt issues this is the very right time to look for a bankruptcy attorney. They have experience in all the different kind of bankruptcy laws. They have the right skills, knowledge and experience to help you resolve the debt issues.

It gives you peace of mind when you are in a financial crisis. They can reconcile your debts through a court-approved payment arrangement which can help you deal with the things easily. Keep all these great tips in mind when you are bankrupt.

Why Should You Stay Away From Extended Car Loan Terms?

Mr. Mendel elaborated that competitors are doing stupid things to increase sales and it includes seven-year long loan terms. He said that automakers are selling more vehicles by offering 84-month loans that decrease monthly payments and make it difficult to repay the loan faster. He added, “You’re ringing the bell on a new-car sale, but that customer is saddled – they’re stretched so thin.”

John Mendel’s interview at the 2015 North American International Auto Show has highlighted a very important aspect of the current auto financing world. Several auto financing companies are offering extended loan terms to increase their sales. They are attracting customers by emphasizing on lower monthly payments but deliberately ignoring the high-interest rate part of the deal.

What is the Reality of Extended Loan Terms?

Extended loan terms or longer loan terms are attractive because they allow you to buy an expensive car while making smaller payments. But, before you opt for such a loan program, it is important to understand its reality.

>> The upside down loan situation

Upside down car loan means that you owe more to the lender than the car’s actual worth. It is a very dangerous situation because if your car is written-off in an accident, you will still have to pay the loan amount. It means you will have to pay money for a car that you no longer drive.

If you opt for a longer term and smaller monthly payments, you will end up with an upside down car loan. It is because lenders will direct monthly payments towards the interest and will not reduce the principal amount.

>> The negative equity situation

A car’s depreciation rate is higher in the first few years. And, if you opt for extended loan terms, you will make smaller payments. As a result, the outstanding loan balance will not reduce quickly. It will create a situation of negative equity. Remember that it is harder to trade-in a car with negative equity because it doesn’t have the power to reduce the new asset’s cost.

>> The higher interest payments situation

SCENARIO – 1 – Suppose your loan amount is $20,000. If the interest rate is 5% and the term is seven years, your total interest amount will be $3,744.97.

SCENARIO – 2 – Now, let’s assume that your loan amount and the interest rate is same as Scenario – 1. If the loan term is reduced to four years, you will end up paying $2,108.12 in interest. So, it is advisable to opt for a shorter term and save money in the long term.

Now that you have understood the reality of extended loan terms, it is advisable to stay away from it. Remember that it is always the bigger picture that matters.

First Time Car-Buying Tips

Buying your first car is an exciting step – but it can also be overwhelming and stressful and is never filled with as much uncertainty as it is the first time. If you take the time to do a little research before visiting the dealerships, your first car-buying experience can be a lot less stressful and a lot more fun! Being a good first-time buyer won’t be easy, but if it’s worth doing – and it is – it’s worth doing well. We’ve come up with some tips to help with the process.

Establish a realistic budget. This figure is generally based on what you can afford per month. Look at your cost of living – mortgage or rent payments, food, insurance, social activities. Once those are calculated, the remainder could be spent on a car payment, fuel, car insurance and maintenance.

Visit your credit union to get pre-approved for financing. Before you fall in love with a car you may not be able to afford, go to your local credit union. Their lenders can get you pre-approved for financing at a great rate that fits your lifestyle and budget. You’ll also know exactly how much you can spend, which will give you added negotiating power at the dealership.

Do your research. Informed shoppers are smart shoppers, so gather some information before you start shopping. Resources like Consumer Reports, Edmunds and Kelley Blue Book offer helpful vehicle reviews and pricing information that can help you determine a fair price for the car you want.

Take a test drive. Nothing is more important in your decision process than how you feel behind the wheel. Take at least half an hour on your test drive, while trying stop-and-go, freeway merging and freeway speeds. If the sales person does not have time then take the time to find another dealership.

Bring a wingman or woman to the dealership. It’s always best to work with a partner. They can help you decide what car to buy and what to pay.

Negotiate your price. Price negotiation is probably the most overwhelming part of the car-buying process, but it is important for you to stick to your strategy. If you’ve done your research, you’ll have a good idea whether the dealer’s offer is fair. Keep in mind that the dealer’s first price is rarely their best price, so don’t be afraid to reject the initial offer. If the dealer can’t meet your target price, walk away. Buying a car is a big step and the transaction has to be right for you.

Buyer beware. Before signing the final contract, ask the dealer to explain each item. Dealers have been known to include extra charges for items like “fabric protection,” “paint sealant” or “rust proofing” that may not be necessary. If there are charges you’re not comfortable with, don’t be afraid to point them out.

First-time buyers should also be wary of financing deals that sound too good to be true. Offers like “0% dealer financing” may sound good, but as a first-time buyer you may not qualify for these attractive specials.

Most importantly, enjoy the process. We know the tips referenced above can make buying a car seem daunting, but with low financing rates, and hundred of cars and trucks to choose from, your options are amazing (especially in the first-time buyer category). So take your time as you move through the process and you’ll be astounded with the outcome.

3 Things for A Successful First Car Loan

The harder you work, the luckier you become.

Every first-time car buyer should keep these words close to his heart. Auto loan process is difficult for everyone. But, it becomes a harrowing experience for first-time buyers because of their ignorance and inexperience.

If you are in the auto financing market for the first time, do not worry. You need to take care of three important things because they will ensure a successful car buying process.

1. Cash

Days of barter are over; the era of cash is forever.

You cannot buy anything without cash. Even if you apply for a car loan, you will be required to make a down payment. So, it is important that you work-out your budget before buying a car.

You will need cash for the following things:

>> Down payment

>> Monthly payments

>> Insurance

>> Registration fees and taxes

>> Fuel

>> Maintenance

So, make sure that you are ready to assume the financial responsibility of a car before searching for one.

2. Credit score

After the days of report card, the days of credit report begin.

Just like colleges and universities check your SAT scores before approving your admission request; lenders check your credit score before approving your car loan application. Your credit score will determine your credit worthiness and help lenders in deciding the interest rate. Ninety percent of lenders opt for FICO score provided by any of the three credit bureaus: Equifax, TransUnion and Experian.

Every credit bureau gives different importance to credit score components. So, there are differences in each of your credit score. And, every lender has the right to use a credit score from any of the credit bureaus. So, it is important that you concentrate on your credit score range and not your exact credit score number.

If you have not obtained any type of credit before, you will not have any credit history. Following are the options for car buyers with zero credit score:

a. Obtain a no credit auto loan program for your first car.

b. Ask your parent to assume the responsibility of the loan.

c. Build your credit score by obtaining a secured credit card, department store card, etc.

3. Co-signer

Usually, a first-time car buyer has zero credit history. This creates a risky situation for lenders. They don’t know whether they can trust someone with no history of making regular payments. It is for this reason that lenders require someone with established credit history to co-sign you loan agreement.

Remember that a co-signer is different from a co-applicant. A co-signer has no right on the ownership of the car whereas as a co-applicant has equal right. You can ask your friends or parents to become a co-signer.

If you have trouble finding a co-signer, you can request the lender for approving your loan application without a co-signer. Although, no co-signer option should be considered as the last resort because it is expensive.

So, these are the three things that should be kept in mind before searching for your first car loan. Remember the words of Charles Buxton: “In life, as in chess, forethought wins.”