Thursday, June 25, 2009

Take action before you fall prey to Credit Card Debt:

Credit card debt is perhaps one of the most common financial problems which people face today. Millions of Americans have fallen prey to immense debt due to credit card debt. The main reason is that many of us are unaware of the concept of credit cards. People treat as if it's some free money and can be spend without any limit. They often tend to forget that it's their own hard earned money that goes for a toss.

Falling into debt is very easy but getting out of debt is an arduous task. So, as it is truly said, prevention is better than cure, take action before you get into credit card debt.

Lesser number of credit cards: The foremost step is to reduce the number of credit cards you use. Using too many cards will tempt you to spend more which will eventually catch up in form of debt. Compare the cards and use the one with least interest rates and best payment terms.

Use cash when affordable: Do not make it a habit to use your credit cards all the time, when you can pay with cash. Try to avoid using the cards for daily expenses like groceries. If you do not want to carry cash around it's better to use a debit card instead of credit card as it is equivalent to direct cash purchase. This will prevent you from unnecessary credit card debt.

Control your finances: The easiest way to avoid credit card debt is perhaps contolling your spending habits. It is always advisable to determine beforehand whether you can afford the item before buying it with your card.

Make your payments on time: If you can follow this rule, you can prevent yourself from falling in this financial trap. If you cannot make the full payment, try not to use the card until the next month till you have made the full payment. Otherwise it will eventually pile up and you will be building up credit card debt.

Implementing these small steps, little by little, will help you avoid the nightmare of credit card debt and improve your financial condition.

Friday, June 19, 2009

Common types of Bankruptcies:

Let's have a quick run down on the types of Bankruptcies:

Chapter 7: The most common and severe of all the existing types of bankruptcies. The other names for Chapter 7 bankruptcy are "Straight bankruptcy" and "liquidation". This type is particularly preferred by the individuals who have negligible or no property and is under the burden of lot of unsecured debt. Generally, for these cases, the debtor needs to sell most of his non-exempt properties to pay the creditors. The basic idea behind filing Chapter 7 bankruptcy is to pay off your debts. However you cannot keep behind any property like a home or a car in this law.

Chapter 9: This type of bankruptcy is for municipalities and functions much like Chapter 11.

Chapter 11: This bankruptcy law is primarily used by financially struggling businesses to reorganize them, and thus Chapter 11 is also known as "Reorganization". Since this type is complicated and expensive, therefore it is mainly feasible for large corporations or businesses, where they can get out of debt by some repayment plans.

Chapter 12: Chapter 12 bankruptcy law is available for farmers and fishermen. Its function is similar to that of Chapter 13.

Chapter 13: This is another law available for individuals. In this case, your income is the main source to pay your creditors and wipe out the debt over time. The duration of the repayment plan may vary from three to five years but the best part is that you can keep your valuable properties, like a home or a car, while filing a Chapter 13 bankruptcy.

Tuesday, June 16, 2009

Identity theft prevention

One of the fastest growing crimes in America is Identity Theft. The term identity theft refers to any fraud when somebody's personal information is stolen and used without his/her knowledge to commit crimes or frauds.

Day by day the number of identity theft cases are increasing and you will be surprised by the statistics shown below:

There are certain ways to prevent ID theft. The video below will help you understand it in a better way.

Saturday, June 6, 2009

GM bankruptcy: Largest ever in U.S. manufacturing history

An icon of the American industry, General Motors, formally filed for bankruptcy on Monday. The world's largest automaker was under tremendous debt that totaled around $173 billion and $82.29 billion in assets, for which GM filed for Chapter 11 bankruptcy to keep it afloat.

This bankruptcy filing was the fourth largest in U.S. history and the largest ever for an industrial company.

According to President Obama, this bankruptcy filing will help GM to move toward profitability. He said that he is "confident" about the viability and achievability of the plan, and the automaker will emerge from it. The U.S. government is holding about a 60% stake in the century old company, which is quite a gamble by the administration.

The chairman of GM, Kent Kresa said in a written statement that this would be a new beginning for the General Motors and he is absolutely confident that GM will bounce back to operate successfully around the world.

The largest automaker is now planning to close around 14 plants amongst their 47 plants. This would again affect in increasing number of jobless people.

The key question is now whether the fallen icon will get back on its feet and can GM regain the title of being the largest automaker of the world.