Debt Consolidation -- Choose Your Credit Counselor CarefullyWritten by Charles Essmeier
Recently passed by Congress, Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 will require people who are filing for bankruptcy to first undergo mandatory credit counseling.
This is probably not a bad idea; after all, many people with problem debt could probably benefit from credit counseling. A good credit counselor can assist clients with problem debts in establishing a repayment schedule, creating a personal budget, and learning how to avoid debt and credit problems in future.
The problem is that with estimated one and a half million additional people seeking credit counseling each year, there will undoubtedly be more credit "counselors" entering market, and many of them are only interested in reaping huge profits at expense of their clients. There are already a number of credit counseling firms working in marketplace that advertise themselves as "nonprofit", when they actually are closely tied to for-profit debt consolidation firms. These agencies will strongly encourage their clients to consolidate debt through their partner company, and result may be a long-term loan for client that doesn't help them at all, but reaps huge profits for consolidation firm. How can someone who is genuinely seeking legitimate, helpful credit counseling choose a counseling agency wisely?
*Counselors should listen. If they start pitching a solution to you during first fifteen minutes you are there, you should be suspicious. A credit counselor should be gathering information about you in order to determine how best to help you. They can’t possibly know how to help if they don’t understand your problem. Unless, of course, they don’t care about your problem and only want to sell generic “solutions.”
| | Bridging Finance BasicsWritten by Darren Yates
Bridging finance is a short-term loan that is used as a way to provide funding for purchase of a new property while borrower awaits sale of an existing property. Unless all stars are in perfect alignment, it’s tricky to coordinate sale of one property and purchase of another property so that transactions occur simultaneously. Bridging finance or a “bridge loan” as it is more commonly referred to, makes such transactions possible. They keep borrower from ending up in a dire financial situation as can happen when forced to pay two mortgages at same time. Bridge loans can be used either for business or for personal reasons. Primarily short term in nature, process for obtaining a bridge loan is similar to that of most types of loans. Most importantly, it’s advisable to work with a lender that has experience with this type of loan. Also, since need for a bridge loan often arises with little advance notice, being pre-approved for such a loan is a good idea. Bridge loans typically are structured as interest only loans meaning that borrower pays only interest on loan each month. The borrower continues with this repayment plan until property loan is being used for is sold. When sale finally does occur, proceeds of that sale are used to repay principal. The principal payment typically is in form of a one-time, lump-sum payment.
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