Justin W

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The Worst Things to Happen to Your Credit

Justin W — April 9, 2020

You can find lists of things that you wouldn’t normally think would hurt your credit score. Unpaid library fines, small bills you never received and annual fees for canceled credit cards are on that list. However, these things only have a minor impact on your credit score. Let’s look at some of the worst things that could happen to your credit.

Bankruptcy
A bankruptcy has the greatest impact on your credit score of anything you could do. A liquidation bankruptcy is worse than a debt repayment plan supervised by the courts, but both make you an untouchable to creditors for years afterward. You may be eligible for a installment loan for bad credit if it is based on your income, if you have regained full control of your income. Avoid installment loans if you’re still on a debt payment plan or at risk of having your wages garnished.

A Foreclosure
A foreclosure leaves an incredibly bad mark on your credit report. It may not be your fault, such as when you get divorced and no one is willing to pay the house payment. A short sale is not quite as bad, though it still hurts your credit. A deed in lieu of foreclosure, sometimes jokingly called jingle mail, is about as bad. That’s when you willingly surrender the house to the bank instead of making them go through foreclosure. They don’t have to spend as much on legal fees evicting you from the house and taking possession.
Repossession
Foreclosure refers specifically to losing one’s home. Losing any other type of property is referred to as repossession. Repossession popularly refers to when the lender sends a tow truck to haul off your car or other vehicle. It can occur with other types of property, as well. They could arrive to repossess the big screen TV or furniture you have on payments. Industrial equipment could be repossessed, as well. Anything you’re leasing could be repossessed, as well. Rent handbags and clothing, and the creditor could theoretically enter your home to take it back. Rent furniture for an event, and they can come get it when you’re done with it or after you’ve stopped paying for it. On the flip side, failing to pay your storage unit fees, and they can sell the items at auction to pay the money you owe. That hardly affects your credit, but it can cause serious problems if they sell valuables like a car you left in storage.

What should you do if you’re unable to make the payments on your car, RV or other toys? Giving it back to the lender and taking out a loan for the difference between what you owe and the value of the item is less of a hit on your credit. It is similar to the difference between a foreclosure and a short sale of your home.
A Bad Debt Consolidation Plan

Debt consolidation plans are not all the same. It is one thing to talk to a counselor who helps you get on a tight budget, prioritize expenses and start paying down debt. They may help you negotiate down your debts with creditors, getting late fees and interest forgiven in return for full payment of the remaining balance. However, services like this often promise to help you though they’re ruining your credit. For example, some debt “counselors” suggest stopping all debt payments for a few months. This kills your credit score. Their advice is to save this money into a fund you can use to settle the debts. Then they offer your creditors less than what is owed. Since you haven’t been making payments, they’re more likely to accept half or less what they’re owed. The problem is that this is almost as bad as bankruptcy in what it does to your credit report. Consumers are often swindled by these services, too. For example, they may ask for a power of attorney document that lets them negotiate debt settlements on your behalf, and they take thousands of dollars in fees for this “service”. Yet you could have done the very same thing yourself, and you’d have had more money to direct toward your debts. In a worst-case scenario, they take the fees and do nothing except close shop and disappear. Now you’re out the thousands of dollars, your creditors are calling, and your credit is trashed.

Every charge-off by a creditor hurts your credit. Every time they decide your debt is no collectable hurts you. And they’ll remain on your credit report for seven years after the date they were reported delinquent. Since many companies wait for six months of non-payment to count it as delinquent, it could sit on the credit report seven and a half years after your last payment.

Debts Going into Collections

Any debt that goes to collections will hurt your credit report. Little debts you didn’t realize you owed that go to collections hurt your credit score. Larger debts going into collections are even worse.

This does create interesting problems. For example, making payments on debt that you no longer legally owe could restart the clock. If it was discharged in bankruptcy or settled, making payments could restart the clock and allow them to list it as valid, active and past-due debt. This is why you should demand proof from a debt collector that the debt is valid and not expired before you just pay the debt.

The worst debt collectors try to collect debts owed by someone else. It may be someone who has the same name or is simply related to you. You are not obligated to pay these debts unless you are a co-signer or were married to the person at the time the debt was incurred. They cannot put the debt on your credit report, though they may threaten this and other legal action.

What if you owe the debt and can’t pay it? Ignore it, and it may result in a lawsuit. This sounds scary, but it shouldn’t be. You might be told your paycheck or bank account is being garnished for the debt. Or you can talk to an attorney who will understand that you can’t pay it. You can also hire an attorney to deal with the issue. At some point, it will move to a charged-off status.

In Miscellaneous

Traditional vs Roth IRA

Justin W — February 18, 2020

It’s never too late to start saving for retirement. Discover the differences between a traditional and Roth IRA, then choose the one that’s the most beneficial.

If there’s one thing every person should know about, it’s the importance of starting a retirement account. Although there are many possibilities, there isn’t a “one-size-fits-all” solution. That means you need to select what’s going to be the most beneficial to you and your unique situation.

For instance, if you work for a company that doesn’t offer any type of retirement savings, you might consider an Individual Retirement Account, otherwise known as an IRA. If you opt to take that route, you’ll need to decide between a traditional IRA and Roth IRA. As with any savings, it’s essential to factor in all the variances to ensure you make the right decision.

Understanding the Basics of IRAs

When it comes to investing in either a traditional or Roth IRA, the process works much the same. You open an account, put money in it, and then continue adding more if wanted. While exchange-traded funds and mutual funds are the most popular choices, you also have the option of investing in securities, including stocks and bonds.

Regardless, the goal is to make decisions that’ll help your money grow, thanks to compound interest.

Tax Considerations

The primary difference between a traditional and Roth IRA is taxes. If you go with a traditional IRA, the money you invest is tax-deductible. Therefore, every dollar contributed helps lower the amount of taxable income. Of course, the reduction must line up with what the Internal Revenue Service (IRS) allows. In 2020, the IRS limit is $6,000.

With a traditional IRA, your money grows but without any taxes applied. It’s only after you begin taking distributions that the government would tax the money. At that point, the amount of tax paid would be the same as if the money were standard income. In some states, money in a traditional IRA is tax-exempt, meaning you wouldn’t pay any state taxes.

At the age of 70.5, you’d need to take Required Minimum Distributions, or RMDs. As such, your ability to contribute to the account would end. Simply put, with a Traditional IRA, you don’t have the option of growing your money indefinitely.

Now let’s look at how taxes work with a Roth IRA. For this, you fund the account using after-tax money. For that reason, you can’t deduct any of the contributions made. Since you pay taxes on the money when putting it into the account, you’re not taxed when taking it out. Not only does that apply after you retire but before retirement as well.

Another difference, with a Roth IRA, there are no RMDs. Therefore, you can take money out as and when needed as opposed to waiting until you’re 70.5 years of age. Something else worth noting is that with a Roth IRA, as long as you’re working, you can contribute funds. With so many people still employed into their 70s and even 80s, that’s a nice benefit.

Choosing the Right IRA

As someone who takes retirement seriously, it’s essential to make the right choice between a traditional and Roth IRA. First, understand fully how the taxes work for each. If you’re currently in a somewhat higher tax bracket but believe you’ll drop to a lower one after retiring, it makes perfect sense to open a traditional IRA. However, if the opposite is true, then you should go with a Roth IRA.

There are free calculators that can help you figure out if a Roth IRA makes sense for you, but most of them are pretty inaccurate. You can also use a more sophisticated (not free) planning tool called WealthTrace, which allows you to run more complex what-if scenarios including Roth IRA conversions.

You also want to factor in a 401(k). If you have one through your employer, you’re already enjoying several benefits offered by a traditional IRA. For instance, the contributions you make reduce the amount of your taxable income. As your money grows, it’s tax-deferred.

The contribution limits set by the IRS are higher for a 401K than they are for both a traditional and Roth IRA. Therefore, if you’re putting money into a 401K, opening a Roth account as well can prove beneficial. That way, you can diversify your retirement holdings. Simply put, when you retire, one source of income isn’t taxed.

Additional Factors

Without RMDs, a Roth IRA is beneficial to a lot of people. If you have other sources of income to support you in your retirement years, you won’t have to dip into your savings. There’s one other appeal about a Roth IRA. Unlike a traditional IRA, you can leave the money in a Roth account in your will for distribution to heirs.

If you have taxable accounts with gains or income, you can use that money to fund a Roth IRA. As far as the income limit, it’s $137,000 for singles and $203,000 for married couples who file taxes together. Also, for this type of IRA, there’s a conversion known as a “backdoor.” For that, you would put money into a non-deductible traditional IRA, followed by rolling it over to a Roth.

If you choose the “backdoor” conversion, any money you roll over is taxable. While this is currently an option, it may not always be available. Some tax reformists believe it’s a legal loophole that the government should close. Doing so would prevent extremely wealthy Americans from gaining access to it.

Summary

It’s sad, but roughly 50 percent of Americans don’t have any type of retirement savings account. If you’re in a position to choose between a traditional and Roth IRA, count yourself fortunate. Before making a selection, be sure to carefully review any implications of estate planning and taxes.

You want to pay attention to the fees charged for both types of IRAs. The goal is to choose an account with low fees so they don’t eat away at the value of your holdings. Regardless of your age, it’s never too late to act. Therefore, talk to a professional financial planner as soon as you can. An expert can answer more questions and guide you to the IRA that’ll serve you best.

In Investing

4 Situations When a Short-Term Loan Can Help

Justin W — March 25, 2019

Even when you try to be responsible with your money, you never know when an unexpected setback might put you in a tough financial situation. When you take advantage of Montreal loans, you can keep a relatively minor financial problem from escalating into a serious disruption of your life. A short-term loan doesn’t require that you have a great credit score to get the money you need — if you have a valid checking account and a full-time job, you should be able to quickly get the money. The following are just a few of the situations when such loans can help.

1. Vehicle Repairs

You depend on your car to get to work and run errands, so a major vehicle repair can prove a significant setback. You don’t want your car to wait in the shop for several weeks while you scrounge up money to pay for the repairs. Though some car insurance policies offer loaner vehicles, they typically don’t fully cover these costs, either.

2. Unplanned Travel

Most vacations are planned out several weeks — or even months — in advance, allowing you to adjust your budget appropriately. But sometimes, you’ll need to take a last minute trip for events you can’t control, like a wedding or funeral.

Though the costs will vary based on how far you need to go to reach your destination, expenses like plane tickets, hotel stays, rental cars, and meals can add up quickly, even for a short trip.

3. Major Home Repairs

On average, homeowners should expect to pay about one percent of their home’s market value on repairs each year. While saving a small amount each month can help you plan for standard repair issues, major problems like needing to replace your furnace could easily exceed what you’ve saved. Putting off roof repairs or plumbing leaks could compound the damage, which means major home repairs should always be addressed as quickly as possible.

4. Pet Emergencies

Though Canada’s single payer healthcare system helps keep medical expenses from becoming a financial emergency, you’re still responsible for your pets’ medical costs. Treating a pet after it gets hit by a car or suffers some other medical emergency can cost several hundred or even thousands of dollars. When your furry friend’s life is on the line, treatment often can’t wait.

Parting Thoughts

It’s always best to have money saved away for a rainy day. But sometimes, there simply isn’t enough in your bank account to address an unexpected financial emergency. Through the responsible use of loans, you can get the money you need to keep a temporary setback from becoming a total disaster.

In Miscellaneous

5 Things to Think of Before Retiring

Justin W — October 28, 2018

You’ve worked hard your whole life to get to the point of retirement. It’s your golden years. The time where you get to relax, spend time with family and do the things you’ve always wanted to do. Don’t let any stress get in the way of your retirement years ahead.

Before you walked out the door of your job for the last time, you’ll want to ensure you’ve thought about everything that could cause stress in your retirement. Will you be financially stable enough to do what you want in retirement? Do you have enough insurance and health coverage? Are there any outstanding loans you should pay off?

It’s easy to lose track of all of the things that could pop up at any point. While you prepare yourself for retirement, though, make sure to consider some of the following points as well.

Insurance and Coverage

Chances are your current career has coverage of some sort. Can you guarantee that you will have the same insurance once you retire? On top of that, there are other things to consider like long-term care, Medicare, and even simply managing your investments. Look into senior benefit plans where they cover a wide range of topics that you’ll eventually want to talk about.

Create a Balance Sheet

You wouldn’t want to run out of money halfway through your retirement. So, prepare yourself and have a good understanding of your financial situation by creating a balance sheet.

A balance sheet shows all of your assets and liabilities to give you a value of your net worth. Your total net worth will be the difference between your assets and liabilities. That number is what you’ll rely on during your retirement years.

Develop a Budget

Although it’s not always fun, it is a good idea to create a budget before retiring. You want your money to go a long way, and a budget will help with that. Remember that you won’t be working anymore, which means you won’t have quite the same amount of income every month. Although you may have a decrease in some expenses, there could be more unexpected expenses occurring, like traveling and for your health. Create a budget that matches your retirement lifestyle you hope to live.

Update or Plan a Will

If you have one already, retirement is a good time to update your will. However, if you’ve never made one, now is the time to develop a will. Ensure that all of your wishes are honored after you pass away. Consider going to a lawyer so that your will is legal and properly witnessed.

Tax Breaks

When it comes to retirement, one of the things you don’t want to do is overlook any possible tax breaks. Upon retirement, you may be eligible for different tax breaks that you weren’t available to you before. Speak with an accountant or talk with your investor to see what type of tax breaks you could receive.

Planning for retirement will help you live your life comfortably and stress-free. The more you can do before you retire, the better off you will be. Consider some of these points before your last day of work, and ensure that you are secured and ready for the years ahead.

In Retirement

Typical Requirements for Getting a Loan

Justin W — July 13, 2018

There are a variety of loans that are available to suit the needs of someone who may be trying to consolidate their debts, take their dream vacation, pay for school, to name just a few of the common life-scenarios that prompt people to try to be approved for a loan. In order to be prepared before you begin the process, you should be aware of the minimum borrower requirements for any loan:

Minimum Age

With few exceptions, the minimum age that is required for a person to be approved for a loan is 18 years old. There are only four states who have an exception to this rule which are Alabama, Mississippi, Nebraska, and Puerto Rico where the potential borrower needs to be older and be minimally between the ages of 19-21 years old, depending on which of these states you live in. Anyone who is younger than 18 years old would need a cosigner before they can be considered.

Residency Status

Any bank or lending establishment will verify your residency status in the United States or any country in which you are seeking a loan. You must be able to provide proof that you have resided continuously in the country for at least six months before applying for a loan. This is the case for virtually any loan available to consumers, from fast cash personal loans online to 15-year mortgages. Lenders like to see signs of stability and predictability in their borrowers’ lives and residency status provides a strong indicator.

Employment History

The longer you have been at your employer, the more likely that a lender will consider you a good risk for loan repayment and strengthen your chances of being approved for a loan. Typically, a lender looks most favorably on someone who can minimally prove two years of employment at the same job. If you work for yourself, you will need to show proof of this through business account bank statements that go back at least 2-3 years. Individuals who have long-term employment and are paid solely on a commission that varies from month-to-month also need to prove that they have a consistent amount of money coming in each month to cover a premium loan monthly payment to the lender.

Debt-to-Income Ratio

With few exceptions, lenders look at how much money you make each month and compare it to your monthly debt amount. This is called the debt-to-income ratio and it usually cannot exceed 35% of your gross monthly income. The average lender will consider a loan if an individual has at least $800-$1,000 of additional monthly income beyond your debt in order to comfortably pay a loan premium each month.

Other Types of Loan Requirements

Mortgage Down Payment

Even though this may not be a steadfast requirement for all mortgage lenders, it is to your advantage to be able to offer between a 5 percent to 20 percent down payment on the chosen property before the loan process begins. This improves the lender score you are given for loan approval since it lessens the ratio of debt that you will incur when you become the owner of the property.

Personal Loan Collateral

This is not always a requirement for personal loans since people do not have the same items on hand for collateral value to offer, but there are personal loan lenders who require some kind of collateral before you are approved for a personal loan because a credit score may not be the most favorable for their minimum requirements. Types of collateral could include a vehicle, property, or cash.

In Debt

Budgeting For Essential Home Renovations

Justin W — March 23, 2018

Budgeting for an essential home renovation can seem like an impossible task, but really it’s nothing to be worried about, allowing it to be achieved with ease. Whilst payday loan lender Wizzcash may be able to offer funds in a financial emergency, there are several, nifty ways you can budget for that urgent home renovation. From seeking the right advice, to being honest about your budget and getting to grips with fees, here’s everything you need to know!

Seek The Right Advice

Before you begin your home renovation, regardless of how big or small it might be, it’s really worth asking for some advice about how to best allocate your limited budget. Whilst you may want to turn to your family or friends for advice, it is better to seek the advice of an expert, as the people close to you may be too emotionally invested to help you make the right objective decisions. Think of an architect. An architect will be able to advise clients where is best to invest in their properties, and will always recommend nifty ways to say money. Result!

Be Honest About Your Budget

When it comes to accurately budgeting for an essential home renovation, it’s paramount that you’re honest about the funds you have available. People often avoid telling their chosen architect or build about the money they have to spend, but there’s no need to hide. By telling your architect or builder what your budget is, they will be able to advise you in the most appropriate way possible, and as mentioned previously, can help ensure you get the most bang for your buck!

Get To Grips With Fees

Home renovations can be extremely confusing, especially when it comes to planning your costs. Due to this, before you step into the project too deep, it’s vital that you get to grips with fees. If you’re planning to work alongside an architect to turn your dream into a reality, discussing how their fee structure works is a great place to start. You may also need to consider the fees of other consultants, such as a quantity surveyor, so keep this in mind!

Understand What’s Included

It’s all well and good getting to grips with how fee structures work, but what use is it if you don’t understand what’s included? When discussing how your consultant’s fee structure works, ensure you understand exactly what’s included in your bespoke package. This way, you can rest assured that you have a healthy amount of budget left over for the additional aspects that are not included and are required to be found elsewhere.

Hidden Costs

When it comes to budgeting for essential home renovations, don’t forget the extras! You may think that you have everything covered, but it’s highly likely that there will be fees that aren’t directly included in your contractor’s quote. This is especially true if your project requires planning permission, as you’ll need to pay a fee to your council, which, depending on the cost, could change everything!

Essential home renovations are often a stressful affair. With a number of factors to take into consideration, sometimes your budget is the last thing on your mind. With these top tips, such as understanding what’s included and planning for hidden costs, you can rest assured that you will be able to complete your essential home renovation in budget.

In Budgeting

Get Back in the Groove with Aroma Therapy

Justin W — February 28, 2018

Are you one of those fine ladies whose career and lifestyle may just resemble the one depicted in the movie How Stella Got Her Groove Back? Perhaps you have a promising professional career, earn a good living and reside in a comfortable home, and have an attractive young child as part of your household. Using aroma therapy to maintain your physical and personal well-being might be something you’ve thought about trying. This can be accomplished by using the best body care and home fragrances you can obtain by using a bath and body works coupon. Just walking into a Bath and Body shop can give you a reason to exhale. The fragrant ingredients in the lotions, soaps, scrubs and personal care products are so enticing, you’ll want to rush home and fill a tub with them. Aroma therapy need not be expensive. Just imagine returning from a hard day at work and finding your hot bubble bath ready and waiting for you to soak in with bubbles and subs up to your chin. Using products from the Bath and Body Works shop makes it easy to imagine, and a Groupon coupon makes it easy and economical to do. You can save a substantial amount of money when you shop with Groupon, and buy all the items for yourself and others at discounts up to 75%.

Regular use of the products obtained with these coupons can help a lady maintain an appearance and sense of being at that age in her life when she is at her peak of success, professionally, socially and physically.

There are so many products that you can get from Bath & Body Works that can keep you feeling fresh and attractive. Their selection offers everything like hand soaps made with coconut oils that make you feel like you are back in the Caribbean enjoying the trade wind breeze and the taste of a strawberry daiquiri. You can also obtain bath scrubs, body washes, fragrances and moisturizers. These are the perfect kinds of skin care items you would want to have handy when you are going out to a party during spring break or just taking a break from your daily grind.

In Prosperity

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