Managing Credit and Debt and Dealing With Bankruptcy

Managing Credit and Debt and Dealing With Bankruptcy

Your credit score is one of your most important financial assets. But if you owe a lot of debt – especially credit card bills – chances are those obligations are hurting your credit rating.

Even worse: if your debt spirals out of control, you could be forced to file for bankruptcy protection, a move that could ding your credit rating for up to a decade.

So what can you do to manage credit and debt wisely – while avoiding bankruptcy court?

Here are four tips to achieve financially stability and maintain tip-top credit too.

Tip #1: Use Cash More Often Than Credit

There’s nothing wrong with having credit cards – and using them when appropriate. But far too many people rely on plastic to pay for nearly everything, from lifestyle costs like travel and eating out, to necessities such as utilities or cell phone service. And then these consumers can’t pay their credit card balances in full each month. That’s why, collectively, Americans owe about $1 trillion in credit card debt, according to data from the Federal Reserve Bank. To avoid over-extending yourself with credit, get into the habit of using cash more frequently. Set limits on your monthly spending in various categories, like food or shopping, and then try your best to only pay for those items with cash. Doing this keeps your credit card balances low, and also boosts your credit rating. After all, the amount of debt you carry accounts for 30% of your FICO credit score. The less credit card debt you have, the higher your credit score.

Tip #2: Be Careful Of The Type of Credit You Accept

Just because a retail store, an auto dealer or a bank or credit union offers you a credit card, loan or other financing, doesn’t mean you have to accept that offer. Always shop around for best loan rates and terms. And avoid so-called sub-prime credit deals, which stick you with exorbitant interest rates or high fees. Any money you pay toward interest payments (or other added costs) becomes money that isn’t paying off your debt. So high-cost loans, including things like payday loans, just keep you trapped in a cycle of debt.

Tip #3: Avoid Co-Signing for Others

One financial trap that many of us have succumbed to is co-signing on a credit card or loan for a family member or close friend. Naturally, you might want to help someone close to you or a person you love. However, recognize that co-signing carries series economic and credit risk to you. In a nutshell, if the person you co-sign for doesn’t pay the obligation as agreed, you could be on the hook to repay that debt. Additionally, the creditor can come after either one or both of you in the event of a default – something that would affect your credit rating. So it’s best to say “No” if someone asks you to co-sign for them. One upside to gently, but firmly saying “No” is that you will likely preserve the relationship too. After all, if the loan goes sour, you and your relative could have a major falling out.

Tip #4: Understand Your Financial Options

If you find that you’re already overwhelmed by debts and you’re contemplating bankruptcy protection, first consider all possible alternatives. Bankruptcy really should be a last-ditch option. So before you pull the trigger on a bankruptcy filing, you can try the following:

  • adjusting your budget to get your expenses in line with your income
  • negotiating with your creditors directly
  • enrolling in a debt management plan at a credit counseling firm
  • enlisting the services of a debt settlement company

In other words, don’t make a rash decision about bankruptcy before first doing something that will have far less long-term impact on your finances and your credit rating.

If you find, however, that bankruptcy really is the best option for you – and indeed, a Chapter 7 bankruptcy, which wipes out most consumer debt could be a fresh start – you should use the opportunity to eliminate your debts and then assess what went wrong, and how you won’t wind up in the same financial predicament in the future. Even with bankruptcy: take heart in knowing that it isn’t a financial death sentence. If you manage your credit well in the wake of a bankruptcy, you can start to rebuild your credit rating in just a year or so.

The High Cost of Free Advice.

The High Cost of Free Advice.

Most of us rely upon financial advisors, who dispense their counsel freely, for what we believe is good financial advice on budgeting, investing and our retirement. However, as a study from the Rand Corporation discovered, that can be a very bad bet – particularly in market downturns. In Rand’s paper, “Impacts of Conflicts of Interest in the Financial Services Industry,” the researchers wrote clearly, “We find empirical evidence suggesting that financial advisors act opportunistically to the detriment of their clients.” The Financial Planning Commission (the industry itself) admitted the problem after the research was published, writing, “The current regulatory framework allows Advisors Interests to be misaligned with Retirement Investors interests… There are significant loopholes that allow for the sale of products that may not be in the best interest of the Retirement Investors.” (more…)

Cancer costs: How to manage housing expenses during treatment

Cancer costs: How to manage housing expenses during treatment

A cancer diagnosis can be heartbreaking without adding financial worries to the mix. If bills pile up and wages grind to a halt, it can become impossible to manage expenses and can lead to an unbearable degree of stress. Amid crushing medical bills and smaller paychecks, you and/or a loved one may even face the harsh reality of a home loss.

These financial realities can wreak havoc on even the most savvy investor’s savings, but there are various assistance options that can help. If you’d like to stay in the comfort of your own home while undergoing cancer treatment, it can be a wise move, as cancer can be a temporary condition. (more…)

CBD Oil For Sale. Cannabis Goes Mainstream. Should You Invest?

CBD Oil For Sale. Cannabis Goes Mainstream. Should You Invest?

​It’s hard to imagine anything that has ever moved through politics faster than the legalization of medical and recreational marijuana, except perhaps the repeal of prohibition almost a century ago. In the past few months, one more state (Michigan) legalized recreational use in the U.S., bringing the total to 10. 33 states now allow medical use of marijuana. I’m seeing CBD Oil for sale over the counter in very conservative states, where being caught with a joint a few years ago could have brought a world of trouble. Customers claim CBD Oil cures virtually everything, and worry about how to sneak it into their luggage as they cross state and country lines.

(more…)

Our Experts Answer Attendees Questions On All Things Belize

Our Experts Answer Attendees Questions On All Things Belize

At last week’s Live and Invest in Belize Conference, host Lief Simon and his dozens-strong team of Belize experts and expats answered hundreds of questions from attendees in the room… for example:

Q: Can I bring my pet with me?

A: Yes. Domesticated pets are allowed to enter Belize when the owner presents a veterinary certificate of health, including a valid rabies vaccination; a valid import permit; and a US$25 fee (a US$12.50 entry fee plus a US$12.50 fax fee). Your pet will be inspected by the quarantine officer when entering the country.

Q: Should I ship my car?

A: Ordinarily, we recommend against shipping a vehicle with you when you move overseas. However, when moving to Belize, it can make sense to bring a car with you. The inventory of vehicles available for sale in this country is limited, and what is available is expensive.

On the other hand, Belize imposes high import duties on vehicles, which can argue against bringing a car with you. Remember, though, residents under the QRP (Qualified Retired Persons) program are exempt from these taxes. Our residency expert walked through the costs associated with bringing a car into Belize… as well as the particulars of qualifying for QRP status.

Q: How do I get a driver’s license?

A: You can drive in Belize on your foreign license for three months. Then you’ll need to get a local driver’s license. On it will be a picture of a short old man. This is Tata Duende, who lives in the woods and taunts people passing through, trying to lead them astray. That’s the local legend. Why is Tata Duende on every Belize driver’s license? The Belizean sense of humor, I guess.

Again, our experts walked through the details associated with applying and qualifying for a driver’s license in Belize step by step.

Q: Can I own a gun?

A: Yes, but understand that gun ownership in this country is a privilege, not a right. Strict gun laws are strictly enforced, and draconian measures apply for anyone found with an unlicensed gun or ammunition.

Q: Is Belize disabled-friendly?

A: The short answer is no, but the real answer depends on how seriously your mobility is limited.

If you require a wheelchair to get around, your only realistic option would be San Pedro, Ambergris Caye. There you could navigate the roads and sidewalks (sometimes with some effort) and have a full life.

Elsewhere in this country, you would find day-to-day life very challenging.

Q: Is the LGBT population welcome?

A: In 2016, the law was changed to make homosexuality legal in Belize. This was groundbreaking legislation for the region. San Pedro, Ambergris Caye, would be the most accepting location for LGBT residents.

Q: Living in Belize, would I lose my original citizenship?

A: No, your residency status abroad has no effect on your citizenship.

Residency and citizenship are two different things. If you’re a U.S. citizen, the only way to lose your U.S. citizenship is to renounce it formally. This is a serious step that you can’t take accidentally.

Q: Do I need to let my home government know that I’m leaving the country?

A: No. If you’re an American, you can register your presence in your new country with the local U.S. Embassy if you like, but you are not obligated to do so. In my experience, most overseas residents don’t register.

Q: Do I need any vaccinations?

A: No, none are required for entry into the country. I’ve been traveling to Belize for 30 years and have never worried about being vaccinated for the trip.

That said, the Centers for Disease Control does recommend some. If you’re an abundantly cautious person, you could take a look here for the details.

Q: Can I drink the water?

A: In most of the country, yes. If you’re concerned, though, stick with bottled water, available everywhere.

Q: Can I still receive my U.S. Social Security payments?

A: Yes. If you’re eligible for U.S. Social Security, you can even have your monthly check direct-deposited into your Belize bank account.

Q: Will Medicare cover me?

A: No. No exceptions. As an American abroad, you need to make another plan for covering your medical expenses overseas. I recommend, though, keeping your Medicare as a major medical backup. Should you ever need or want to, then, you could return to the United States for medical care that would be covered by Medicare.

Q: Can I vote in local elections?

A: Anyone residing in a village (foreign resident or local citizen) can vote in village elections. However, only Belize citizens can vote in municipal and national elections.

Remember, residency is not the same as citizenship.

Q: What is the relationship between Belize and Guatemala? Is the border safe?

A: Yes, the Belize-Guatemala border is safe… friendly, even. Children living near the border in Guatemala cross back and forth daily to attend Belize schools.

To better understand the relationship between Guatemala and Belize requires a Belize history lesson. In 1859, Guatemala signed a treaty with the British setting the borders that exist still today. As part of the allowances of the treaty, the British were to build a road from Belize City to Guatemala City. The British never built this road, and Guatemalan politicians worked their constituents into a frenzy saying that the British had, therefore, stolen the land from them.

Then, in 1945, Guatemala drew up a new constitution including a clause declaring the disputed Belize territory as part of Guatemala. At the time, Belize was still British Honduras and under the full support of Great Britain. In 1975 British Prime Minister Harold Wilson, was asked offhandedly if, should Guatemala ever invade Belize to force its claim, he would send the British Navy to defend his colony. The prime minister’s response in the negative inspired Guatemala to send a 12,000-man army to the border.

PM Wilson must have reconsidered his off-the-cuff remark. He sent in the British infantry and a squadron of Harrier jets. That stopped the Guatemalans in their tracks. The two contingents sat on their respective sides of the border for two weeks, watching and waiting…

Then, 200 miles away in Guatemala City, the earth shook. The Guatemalan army packed up to return to the capital to help with the earthquake relief.

To this day, Guatemalans argue that the land was stolen from them. Belizeans, meantime, hold that were it not for Guatemala looming to their west threatening to invade, they would have pushed for their independence from Britain decades sooner.

Q: What’s the first step for making a move to Belize?

A: Buy a plane ticket.

Belize is a quirky place; its inhabitants, both the locals and the expats who’ve chosen to make Belize their adopted home, are an eclectic mix. This is a beautiful, welcoming, sun-soaked country where everyone speaks English, the cost of living can be a global bargain, and the day-to-day experience of life is simple and sweet.

Belize is both the best of the Caribbean at a discounted price and, inland, the best place on Earth, I’d argue, to escape the stresses, concerns, and woes of our current age, to check out of the daily grind and embrace a back-to-basics lifestyle supported by thousands of like-minded folks doing the same.

However, Belize is not for everyone. The only way to know if it could be the right place for you to launch your adventures overseas is to go see it for yourself. Do your due diligence, carry out your online research, and then get on a plane.

Visit the country for two weeks at least; four or six weeks is better. Stay long enough to begin to get a feel for what it would be like to be a resident of Belize, rather than a tourist. Rent a house or condo on the beach, rather than staying in a hotel. Shop at the local markets. Prepare your own meals. Use local transportation. Make the effort to make friends, both Belizean and expat.

Then, when your visit is over, take stock, paying attention to your instincts and being honest with yourself. Is this a place you’d like to call home? If not, worst case, you’ve accumulated great memories of a grand Belize adventure holiday.

Kathleen Peddicord

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