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Bankruptcy:
An Effective Solution to Severe Financial Crisis

Using bakruptcy as a solution to solve your bad financial status

Bankruptcy can be defined to be as a bad financial status where one is unable to fulfill their loan or mortgage agreements, due to lack of sufficient money in the bank. In most cases, people become bankrupt due to poor cash management skills and spending beyond their means.

Sometimes those facing financial difficulties may try and make monthly payments, but still find their balances increasing. This can be caused by factors such as incurred interest charges, over-limit or late fees charged by the creditor, etc. Such conditions can make one feel as if they are trapped on a financial treadmill, always working hard but never making any meaningful progress.

Bankruptcy is a constructive financial solution
Often looked at as a bad thing, bankruptcy can be a positive and constructive solution to your financial problems

Bankruptcy Tips and Advice

However, all hope is not lost as there are effective solutions to this bankruptcy problem. The following are some quick tips that help you to deal with bankruptcy.

» You could pay off debts faster by adding monthly salary payments to your principal balances. This helps in reducing interest charges that could have otherwise been added for defaulted payments - thus ensuring that you save lots of cash in the process.

» Another technique that's closely related to the above is consolidating debts into a single reimbursement structure. Each pay-day funds would automatically be deposited into your savings account using the electronic funds technique. This money would gradually be used to pay creditors and settle the debts that you have accommulated.

» Develop your own customized budget that shows how each dollar is spent.

» Understand your current financial situation and make coherent goals to improve it.

» Contact a professional debt counselor for advice on how to override your current situation.

How to Increase Your Credit Score after Bankruptcy?

Many people get confused when trying to find the most appropriate ways of enhancing their credit scores. This can be done without incurring any extra costs. For example, one can bounce back by acquiring either a revolving or non-revolving credit line, and then repaying the borrowed sum on a regular basis.

Since bankruptcy is usually filed as public information and documented in official records, this could make it somewhat difficult to submit credit. One can't hope to mend their scores without first availing a new credit. Hence, it's appropriate to look for safe ways of acquiring loan and slowly building credit worthiness after bankruptcy discharge.

VA or FHA Insured Loans

Securing a mortgage advance to buy a new house is probably the best way of getting back in track financially, note that a history of timely home mortgage payments may help you reconstruct your credit history even after bankruptcy. The Veteran Administration and Federal Housing Administration loans are particularly availed to those who want to purchase a new house after insolvency. They are easy to obtain provided you follow the correct application procedure. For instance, to obtain the FHA insured advance applicants should have made 12-24 successive payments on their respective accounts.

As for VAs, one must wait for at least 2 years to get a loan after bankruptcy acquittal. Another effective technique is applying for payment deduction or secured credit cards from reputable financial institutions, one can get these cards within 6 months after application. Moving on, if you're in Europe and would like to get free or subsidized healthcare assistance then apply for the EHIC card. Registration is free and can be done online. 

Ruby Andrew’s author bio

Ruby Andrew lives in Bristol, UK and is an avid reader and blogger. Since her early years she’s had a passion for writing. Her articles have been published in leading UK newspapers. Her areas of interest are food, reviews (Book/Movie), Travel, Fashion, Lifestyle, Fitness and Health. She works as a guest blogger on her chosen areas of interest and currently writes on behalf of EHIC card.

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