Is your credit score in the red?

If yes, you’re not alone. About 50 percent of credit-active consumers in the United States have bad credit.

However, that’s just about where the consolation ends. When you have bad credit, you experience the consequences alone, not as a group. No one will be there with you when a lender rejects your credit application because you have bad credit.

The good news is bad credit isn’t cast in stone. You can repair it and you can even use a credit repair company for better results.

If you’re on the fence about hiring a credit repair service, we’re fleshing out the various ways you will benefit.

Let’s dig in!

You Don’t Know How to Read a Credit Report

Unless you’re an accountant or very familiar with credit reports, it’s highly unlikely that you know how to read a credit report. Yet, the first step to rebuilding your credit is to get a copy of your credit report, scrutinize it, and establish whether the information on it is accurate.

If you don’t know how to read and interpret a credit report, you won’t be in a good position to know if there are errors that could be pulling your credit score down.

A credit repair service will help you with this. The company will have professionals who know how to read credit reports and catch any information that might be inaccurate.

Some companies have also developed intelligent systems that will easily and quickly spot any inconsistencies in your report. You can learn more about how financial technology is revolutionizing credit repair.

If there’s inaccurate information, the next step is to file a dispute with the credit bureau that issued the report. This can also be a complex thing to do if you don’t have the expertise, but the credit repair company will guide you on how to do it.

You Don’t Have Enough Time to Work on Your Credit

Credit rebuilding doesn’t require much physical effort, but it can be a time-consuming endeavor. First, you have to learn how to rebuild credit. Then, depending on the state of your credit, you have to file credit error disputes, contact lenders, and so forth.

Do you have the time to do that? If you’re anything like the average American, you’re probably juggling work, education, and home life.

When you hire a credit repair service, you won’t need to worry about time. The company will do most of the heavy lifting for you, ensuring you have enough time to do other important tasks in your life.

A Credit Repair Company Won’t Charge You an Arm and a Leg

Most Americans are in financial hardship right now, which means you don’t want to spend money on things that aren’t necessary. For this reason, you might not be willing to hiring a credit repair service.

Don’t fold your wallet so quickly, though. A credit repair service won’t cost you an arm and a leg. Do some shopping around and you’ll find a service that suits your budget.

Let a Credit Repair Company Help You

It’s understandable if you’re unsure about hiring a credit repair company. But as we’ve demonstrated, the benefits are worth it. At a time when having good credit is crucial, you want as much professional help as you can get. Just focus on finding the best credit repair company.

Explore our blog for more helpful financial tips.

For those who live in a climate that gets very warm in the summer, you likely see a huge jump in your utility usage and your subsequent utility bills during this time. And while some of this is expected, what you’re paying and using can likely be reduced with just a little additional effort on your part.

To help you see how this can be done, here are three ways to reduce your utility usage and bills during the heat of the summer.

Prioritize Your Ventilation Options

In most places, the evenings cool off enough so that you don’t have to have your air conditioner cranked all the way up in order to be comfortable. So if this is the situation for you, you should be thinking about what you can do tonight and during the morning to help use less energy to keep your home cool.

By opening your doors and windows at night, you’ll let cooler air in and flush hotter air out. Then, the next morning, you can better prioritize your ventilation options. Ideally, Austin Lichtenstein, a contributor to SmartEnergy.com, shares that you should start with using natural ventilation, like opening your windows again to let in the cooler morning air. If this doesn’t suffice, try using fans to get some air movement. And when this isn’t working to keep you cool anymore, then use your air conditioner. By prioritizing in this way, you should be able to use less energy and spend less money on cooling costs.

Protect Yourself From The Sun

The best way to keep your home cooler is to not allow it to heat up too much in the first place. To do this, you should seek out ways to protect your home from getting too much sun.

One way you can do this if you own your home is to plant shady trees on your property. You could also try installing sunscreens on your windows to let less sunlight and heat in. But if you’re a renter, the best option for you, according to Caroline Burke, a contributor to The Bustle, is to put up thick curtains to add insulation around windows and block excessive light from coming in.

Seal Everything Up

Once you’ve gotten your home to a temperature you’re comfortable with, you’ll want to make it easier for your home to maintain that temperature without having to use a ton of energy to do it.

To accomplish this, Lauren R., a contributor to This Old House, recommends that you seal up any small openings in your home so that there’s minimal airflow. Doing things like using a draft blocker around exterior doors and putting film or weather stripping around your windows can help with this.

If your utility bills get higher than you’d like in the summer, consider using the tips mentioned above to help you use less energy and still keep cool.

Are you wondering what Ethereum is and whether or not you should buy into the network? Ethereum is the second biggest cryptocurrency by market cap and makes it an attractive choice for both investors and believers in cryptocurrencies.

But with Ethereum already reaching over $2,500, is it too late to get in, or is it still on the rise?

Here is everything you need to know about investing in Ethereum and whether you can handle the crypto market.

What Is Ethereum?

Ethereum is a cryptocurrency that focuses more on the development of a decentralized network, rather than a decentralized currency like Bitcoin. Ethereum uses Ether (ETH) as its source of transaction fees and rewards for processing transactions on its blockchain.

The Ethereum network’s purpose is to allow other users to build upon it. Rather than needing to build a separate blockchain for potential users, different cryptocurrencies can develop in parallel to the Ethereum one.

For instance, say you wanted to create your own crypto token. Rather than having to build your own blockchain to process transactions, you can instead build upon Ethereum and make your coin an ERC-20 token. This means users will use ETH to process transactions.

To learn more about Ethereum and everything it brings to the table, be sure to check out the link.

What Is Ethereum Mining?

Ethereum currently runs on a Proof of Work network. This means it needs computing power to process transactions. This is why people buy gaming graphics processing units (GPUs), as these provide the computing power needing to run the network.

When people mine, they have two ways to make a profit.

The first is through block rewards. The Ethereum developers reward those that successfully process a block on the blockchain first with more ETH. The current reward per block is 2 ETH.

The second is through gas fees. Whenever you process a transaction, whether that be sending ETH to someone, adding liquidity to a decentralized exchange, or approving a transaction, you pay a transaction fee. As a tip to miners for helping secure the network, miners take a cut of the fees paid.

While it may seem annoying that you have to pay per transaction, this happens in everyday life as well. The cost to buy something at a retailer gets added to the cost to buy something, making it seem like you never experience a transaction fee.

Ethereums Role In Decentralized Finance

Ethereum has been the leader when it comes to decentralized finance (DeFi). Rather than relying on governments, financial institutions, or other money services, decentralized finance has no home location to control the money moving in and out.

Because there are so many different ERC-20 tokens, Ethereum has paved the way for decentralized exchanges like UniSwap or SushiSwap.

At these decentralized exchanges, you can provide pairs of tokens, like an ETH-UNI token to their liquidity pool. You then get paid in fees that occur on the network that requires people to swap ETH for UNI or vice versa.

Who Should Invest In Ethereum

To invest in Ethereum, you should have a strong stomach. While the stock market itself is volatile, cryptocurrency investing is even more so. There is no downtime for cryptocurrency, meaning you may need to watch investments around the clock.

If you’re comfortable with that volatility, then now might be a good time to invest in Ethereum.

Cryptocurrency is still in its infancy. Even Bitcoin has only been around since 2009.

If you believe in the platform of Ethereum, then it will feel the same as if you were investing in a company that you believe in on the stock market. Even if there are ups and downs, if you believe that it will prevail, then you can take that risk.

Holding long-term will be beneficial for those that are planning on staking when ETH 2.0 comes around. ETH 2.0 will allow users to stake their ETH, which will move the network from a PoW method to a Proof of Stake method.

Who Shouldn’t Invest In Ethereum

Now if you panic any time that there is a drop above 5% in the stock market, you won’t fare well when it comes to crypto. It is not unusual to suddenly see 15% drops in the entire market over the course of an hour.

If you’re asking yourself whether you should invest in Bitcoin or Ethereum for a store of value, Bitcoin might be the better option for you. Bitcoin works more like a currency and you can actually buy things with it. Recently, Tesla added an option to buy one of their cars with Bitcoin.

It also wouldn’t be smart to invest in Ethereum if you plan to utilize DeFi and you only have a little bit of money. The gas fees for transactions are out of control currently. To send someone $10 USD in ETH, you might end up paying around $16 in transaction fees.

Those looking to get involved with DeFi should look into the Binance Smart Chain instead. The lower fees and introductory costs allow those with smaller amounts of money to get started.

How Can You Use Ethereum

Currently, retailers are still adapting to the cryptocurrency space. With PayPal now offering to store your crypto, this is a good sign that more merchants are going to start offering the option to pay with Ether and other cryptos.

For now, you can use it to process transactions on the network or “HODL” it away until the gas fees calm down.

Investing In Ethereum: Not for the Faint of Heart

When it comes to investing in Ethereum, you’re going to need a strong stomach. The crypto market can be rough some days. Always remember that most governments treat ETH like an asset, so familiarize yourself with your government’s taxes when it comes to assets.

If you want to learn more about Ethereum and other cryptocurrencies, then be sure to check out the rest of the blog. Know someone interested in investing in ETH? Share this article with them so they know what they’re getting themselves into.

With so many different types of bank loans that are accessible today, how do you pin down the right type of loan for your needs? Ideally, you want to opt for a loan that doesn’t make your financial situation worse if you’re already in a financial pickle.

But not everyone that takes out a loan is in financial duress. Sometimes, you may just need a small jump start to get a new business on its feet, or maybe you want to purchase your first home?

Whatever your situation, knowledge is power when it comes to choosing the right loan. Allow this blog to be your guide.

Two Different Types of Bank Loans to Consider

No matter the type of loan you choose, they all vary based on two major factors: the term of the loan and the security (also known as collateral) that’s required to obtain the loan.

In short, you have two loan choices to decide between — a secured or unsecured loan:

1. A Secured Loan

In order to take out a secured loan, your lending institution, ie. the bank, will look at what type of collateral you have to offer them. This form of collateral includes large, valuable items such as your car, home, equipment, or other forms of property.

The main benefit of a secured loan is that the interest rate is far lower than that of an unsecured loan. This is because the bank has your collateral to rely on should you default on the loan.

Secured loans also offer longer repayment terms, making them more affordable to pay off over time. You can also loan a greater amount of money with a secured loan, depending on what you offer as collateral. Check out https://www.farmersbankidaho.com/ for more.

2. An Unsecured Loan

These are short-term loans and do not require any form of collateral upon signing up. However, one of the main considerations when taking out an unsecured loan is that you have a lower borrowing rate. You can only secure this type of loan based on your credit score, too.

With unsecured loans, you will have to pay it back at a higher interest rate as the bank does not have anything to fall back on, otherwise. The repayment terms of this type of loan are also far shorter — meaning you will pay back more, over a shorter period of time.

Under the umbrella of these two main types of loans, you’ll find a plethora of sub-categories. Some of these loans are tailored to suit specific needs, such as buying a home, supporting a business, etc.

Let’s dive into a little more detail…

A Personal Loan

A personal loan is unsecured and quite low-in-value. In short, these are not the best types of loans to take out, but are handy if you are in a financial bind.

For example, if you need funding for a major life event, an emergency, or major home or car repairs, then a personal loan can help when you’re in financial straits.

The approval process for a personal loan is generally quite easy and seamless. All you need to provide is a form of identification and proof of assets greater than or equal to the loan amount. However, the catch is that the interest rate is very high and the repayment period short.

In other words, you may end up paying more than the original loan amount once the loan is completely repaid.

A Working Line-of-Credit

This is just a fancy term for taking out a credit card. In a nutshell, the bank offers you a line-of-credit set at a maximum spend amount. You can access this line-of-credit as and when you need for either personal use or business use.

It’s almost the same as a checking account, only you pay interest on the money you spend. Most banks offer a line-of-credit that is renewable after a period of 90-days, but also up to several years.

Your maximum spend amount also varies depending on your earnings, i.e. the adequacy of your cash flow and whether you can repay the line-of-credit, with interest. These amounts range from as little as $500 up to several million dollars.

The interest rate is market-related, and you only pay interest on your outstanding balance. You will have to pay back a minimum amount each month, depending on what you’ve spent, too.

A Short-Term Commercial Loan

A short-term commercial loan is a secured loan, similar to a mortgage loan. You could also use a short-term commercial loan the same way you would a working line-of-credit — they are interchangeable loans.

For example, if you were a new business in need of working capital, this is a good loan to consider. A short-term commercial loan is most popular among businesses for major purchases, such as equipment, etc.

You can borrow a fixed amount of money over a set period of time, while the interest you pay is based on the lump sum (total loan amount). A short-term commercial loan requires adequate collateral or needs to be supported by adequate cash flow and a good sales history.

They are called short-term loans because the repayment period ranges from 90-120 days but can extend for up to three years.

A Long-Term Commercial Loan

This is the exact same loan as the above, except you get to repay it over a far longer period. You generally have a minimum of three years as a repayment period but can choose a timeframe of up to 10 years.

Due to the fact that there’s more risk involved in terms of repayment for the bank, these types of loans are a little more difficult for businesses to secure. The bank may not be willing to take the risk of you not repaying the loan if your business goes under before the loan term ends.

In this case, you will have to offer collateral for the loan and you will have a time-limit of five to seven years for repayment.

A Home Equity Loan

This is a popular type of loan for new families looking to invest in property. A home equity loan is most commonly called a mortgage. They are large, long-term loans that span a period of 15-30 years. They require some form of upfront collateral, too. Most of the time, the home you buy becomes the collateral for the loan.

Interest rates on mortgage loans are quite low, some as low as just one to two percent. But this is because principal costs are high and there are large fines associated with not paying the interest on your mortgage.

Become a Finance Fundi With Us

These are just a few of the different types of bank loans you have access to today. Before taking out any loan, of any kind, you want to consider all of your options first.

If you’re looking for this type of financial knowledge, be sure to explore the rest of this site for more. We also offer articles on all things business, technology, travel, the list goes on. Explore as you please!

Do you feel like you never have enough money? If so, you’re not alone.

After all, it’s easy to fall behind on bills and feel like you’ll never be able to catch up. Especially if you’ve experienced some recent hardships such as getting injured on the job, gotten laid off, or your car has broken down and needs to be replaced.

The simple truth is that money makes the world go round. Thus when you run low on cash, you need to understand the different ways to borrow money so that you can get back on your feet. Fortunately, you’ve come to the right place for advice.

This article takes a look at ways to borrow money that you might not know about. Keep reading to get the inside scoop.

1. Credit Cards

Let’s start by discussing your credit cards. After all, most credit card companies will allow you to borrow money on your cards based on the amount of credit you have available.

In other words, whatever your credit limit happens to be on an individual credit, you can borrow any amount up to your limit.

For example, if you have a $5,000 limit, you can’t borrow up to that amount. But if you only have $500 of remaining credit left on the card, that’s all you’ll be able to borrow.

Just keep in mind that you’ll need to make your monthly payments on time, and will likely face steep interest rates and fees for cash advances on your cards. But you’ll also enjoy the convenience of not having to worry about applying for a loan.

2. Car Title Loan

Your next option is a car title loan. This is a great way to get money fast as long as you have a clean title. You’ll simply need to fill out an application with some basic information, and hand over your title in exchange for a check.

This post will help you understand how to get a car loan.

3. Home Equity Loan

Next, you could apply for a home equity loan. The amount of the loan will be based on how much equity you have in your home. You’re simply borrowing against its value, thus it’s a fairly quick process.

4. Secured Loan

A secured loan means that you will be required to offer some form of collateral in exchange for the loan amount. This collateral has to be an asset that’s of equal or greater value to the amount of the loan. Just keep in mind that if you fail to repay the loan, you’ll have to forget the collateral.

5. Unsecured Loan

An unsecured loan doesn’t require collateral but does include an extremely high-interest rate plus fees. This type of loan can be useful if you have bad credit or lack the necessary assets to qualify for a secured loan.

6. Personal Loan

You could also borrow money from family or friends. This is a great way to avoid expensive fees and high-interest rates. Just be aware that borrowing money from loved ones can potentially cause tension in your relationship.

Your Guide to Understanding the Different Ways to Borrow Money When You Need Cash Fast

Life can be challenging sometimes. Fortunately, this guide to the different ways to borrow money can help make the tough times slightly less stressful.

Keep scrolling to discover more great lifestyle tips and advice on this blog.

Owning and running a business is filled with many risks, both unknown and known. Wise business owners will take up different types of covers to protect themselves. These insurance covers also protect their businesses against liability and financial losses.

Companies have the opportunity to turn their expenses into potential profits. They can do this by choosing either captive insurance or self-insurance. While these two insurance types are similar, they have distinctive differences.

Read on to learn the differences.

What Is Self-Insurance?

Self-Insurance is the act of setting aside some money to cover yourself against certain risks.

A start-up business can systematically save some money to cover specific problems. These problems may include cash flow issues caused by delayed payments and losses.

The concept behind self-insurance is that extensive saving could help a business cover anything that’s covered by traditional policies.

All states have different requirements for employers who choose self-insurance. Some require the employer to have worker’s compensation insurance or run a financially stable business.

What Is Captive Insurance?

Captive insurance means that one or more clients own and control the insurance policy. The goal is for the insureds to protect themselves against a common risk.

Self-insurance and captive insurance operate under the same concept. However, captive insurance is a bit complex and expensive to maintain.

An example of captive insurance is when a group of farmers create their own captive insurance company to protect themselves from financial losses due to crop destruction. The group is supposed to pay premiums to their insurance carriers the same way it’s done in commercial insurance coverage.

How Captive Insurance Is Different From Self-Insurance

Captive insurance is not an answer to all your insurance issues. But it could be a practical option for companies looking to take more control of their losses.

In traditional insurance coverage, you pay the insurance company directly. However, in captive insurance, you can see all the distinctive components that make up its premium. You will also control the delivery of the coverage and the pricing.

For captive insurance to be an effective solution, it must allow an increase in profits rather than unwanted expenses. This is achieved by financing smaller and more significant risks alike.

Members of a captive insurance plan can also buy reinsurance. This move adds an extra layer of security to their businesses. The additional cover reinsures business losses above a specific point.

Captive insurance can cover a much larger percentage of losses than self-insurance. These losses are caused by realized business risk. However, if this risk is not realized, all the premium payments go to waste.

Which Is the Best Cover for You

Now you understand the difference between self-insurance and captive insurance. Therefore, it’s up to you to choose the best coverage depending on your business needs. Take into account all your business risks and choose the best plan.

For more insightful business advice, check out other posts on our website.

Victims who suffer severe car accident injuries may be entitled to Social Security Disability benefits if they can no longer work or if their ability to work is compromised after the crash. While there is a heavy focus on the recovery of immediate compensation in a court case, the extensive process of applying for SSDI is often overlooked. Knowledge of all of the benefits available to victims is crucial as a person begins to regain control of his or her life.

Understanding SSDI Benefits

Social Security Disability Insurance is a payroll insurance program funded by the federal government through taxes. Managed and maintained by the Social Security Administration (SSA), SSDI’s main purpose is to provide financial relief to those who find themselves greatly reduced in their work capacity due to physical or mental disabilities. The cause of these disabilities, whether the result of an ongoing condition since birth or a recent injury accident, matters very little as long as up to five questions can be answered to the SSA’s satisfaction. The questions are as follows:

1. Is the claimant performing substantial gainful activity?
2. Is the claimant’s impairment severe?
3. Does the impairment meet or equal the severity of the impairments in the Listing of Impairments?
4. Is the claimant able to perform past work?
5. Is the claimant able to perform any work in the economy?

Once the questions are answered to their satisfaction, the SSA provides monthly SSDI benefits to the individual. The amount a person with a disability receives is based on a portion of past earnings. These benefits may take a considerable amount of time to acquire, especially if there is an appeal or reconsideration.

If an injury is not listed within the SSA’s Listing of Impairments, the victim may still qualify for benefits if it is established that the disability is medically equivalent to one in the listing. A doctor is often enlisted to assist with creating a residual functioning capacity form (RFC) to determine the severity of the impairment. This can be a practitioner enlisted by the SSA or the treating doctor of the claimant. The RFC is determined by evaluating the workload the individual can complete easily, ranging from heavy factory work to sedentary work. Usually, one needs to be scored as less than capable of performing sedentary workloads. Exceptions for the rules exist. If the applicant is over the age of 55 or cannot change jobs due to a lack of education or formal training, then that is taken into consideration.

Victims do not need to have a permanent injury for the Social Security Administration to approve the disability checks. If the disability is severe enough to prevent an individual from performing substantial gainful activity for at least twelve months, then the person is likely eligible to receive benefits from the SSA to compensate for lost wages in the short term. For individuals who are able to work, but must accept a position with significantly reduced wages due to impairments from the car accident, some benefits may still apply.

A marriage is a legal transaction that involves creating a partnership where assets are shared. The dissolution of this partnership through a divorce requires the appropriation and distribution of those assets. Assets that may need dividing are financial holdings, retirement accounts, businesses, and real estate properties. The family home is included among these assets. In the absence of a prenuptial agreement, dividing family assets requires a thorough mediation process.

Ownership of Marital Assets

While many may assume that assets are divided up evenly based upon a dollar amount, that simply isn’t always the case. There is no way to fairly and evenly divide certain assets such as a house, rental properties, or vehicles. This is because it is rare for both partners to enter into a marriage with identical resources. Therefore, any wise divorce lawyer will try to divide assets as equitably as possible between both parties.

It should be noted that assets acquired during the marriage are seen in the eyes of the law as acquired by both parties. It would be simple to see a house as shared marital property, especially if both spouses are included in the mortgage. However, the shared marital property could also include property that technically only has one name from the partnership on paper.

Changes in Asset Value

An additional factor to consider is appreciation, both active and passive. Active appreciation is an addition to the value of assets through direct action, such as deposits and contributions towards investments. These are easy to track with proper documentation. Passive appreciation is the result of outside forces influencing an asset’s value, such as a market supply and demand, inflation and devaluation. Real estate lawyers are keenly aware of these factors and can be an asset in property valuation during divorce proceedings.

Asset Distribution

Redistributing assets is by no means an easy action to take. When it gets down to the matter, dividing up sentimentally valued property and financial holdings accumulated as a team is an exceptionally emotional event. This process can quickly become emotionally charged with everything else that is going on during a divorce. When personal items are thrown up for evaluation, it can leave feelings of bitterness should negotiations break down, and the goal switches from amicable separation to trying to get the best deal from the transaction. As such, a family home can quickly become a difficult asset to divide.

Separating couples can choose to handle this asset in different ways. First, the divorcees can choose to sell the home and divide the profit equally. This is the simplest way to divide the equity of the home. If one spouse does not wish to abandon the family home, he or she can refinance the mortgage to remove the name of the former spouse. This means that the home is no longer a shared asset as the old debt is replaced with a new loan. The spouse retaining the property may need to buy out the other person’s share of the equity. Finally, the asset may continue to be shared. This is a viable option for partners who choose a nesting method for child custody.

 

To beginners, the concept of learning how to successfully buy and sell shares in a company can seem overwhelming. There are plenty of stories out there about people who have made their fortunes learning how to master the stock market and make the right acquisitions at the correct times. However, you can also find plenty of tales of people who have rushed into the landscape too fast and wasted their money in the process. Becoming a successful trader is a process that takes significant time and effort. You’ll need to make sure that you’re evaluating the market carefully, building a successful strategy, and diversifying your investments as you go. So, what do you need to get started?

A Solid Plan

The first step in becoming successful at anything, is having a solid strategy. For share traders, this means thinking about what you want to accomplish with your investments and building a plan to help you reach those goals. A trading plan is something that in the past you might create with the assistance of a financial advisor, and a brokerage team. Today you can also create a plan yourself, using various trading resources that are available online.

Essentially, you determine what it’s going to take to get you to enter a position in a trade, and what might cause you to step back and sell an asset. You’ll also think about things like money management, and how frequently you’re going to buy and sell. Only once you have a solid plan in mind can you start looking for an online stock trading provider that can help you to achieve your goals. As you progress in the industry and learn more about your markets, you can adapt your plan as you go.

The Right Tools

The bar to entry for trading is lower today than it’s been in quite some time. You don’t need to be a huge business owner or have a lot of cash to get started. All you need is an online account with the right brokerage firm, and enough cash to begin building your portfolio. However, there are various other tools that can help you to improve your chances of success. For instance, if you’re a day trader, then you’re going to need an account that allows you to make multiple trades a day, and a computer with a fast internet connection to keep you ahead of the curve. If you’re a beginner in stock trading, a paper account that allows you to practice your skills before you put your money at risk will be an essential step.

Patience

The best investors in the world didn’t make their cash overnight. Even the most effective traders have had to put plenty of time and effort into ensuring that their strategies work. This means that you’re going to need to have a little patience before you can classify yourself as an advanced trader. The more time you put into testing your strategies, reading up about your markets, and learning new skills as you go, the more likely it is that you’ll have what it takes to build a portfolio that actually delivers measurable results. Rush in too quickly, and you could lose everything.

 

Property taxes are generally not dischargeable in bankruptcy. However, homeowners can use the bankruptcy process to help if they fall behind on property taxes to avoid losing a home. Paying property taxes is one of the responsibilities of a homeowner, and failing to do so puts a homeowner at risk of losing a home through the foreclosure process. Chapter 7 bankruptcy provides minimal protection in this instance. However, through Chapter 13, homeowners can include property taxes in the distribution process, buying time to pay back what is owed.

Why Paying Property Taxes Is So Important

Failing to pay property taxes can cause a homeowner to lose the home. When back taxes are owed, the delinquent property taxes, along with the interest and penalties, become a lien on the property. The taxing authority has the right to repossess the home and sell it to satisfy the debt. In addition, if the homeowner has a mortgage on the home, the back property taxes can put the owner in breach of the mortgage contract. As a result, the mortgage provider can repossess the home. Because of this, falling behind on property taxes puts an individual at serious risk of losing a home. This is why many turn to bankruptcy in hopes of finding protection.

Using Bankruptcy to Help with Property Taxes

Property taxes cannot be discharged in Chapter 7 bankruptcy. Filing for Chapter 7 still leaves the individual responsible for all back taxes. However, people may be able to use Chapter 13 bankruptcy to help.

Under Chapter 13 bankruptcy protection, a debtor places all of the existing debts into a payment plan that is controlled by a Trustee. Each month, the debtor pays the Trustee a set amount, and then that amount is distributed to the creditors based on a pre-determined repayment schedule. Debtors can include back property taxes in the distribution process. The goal of this repayment plan is to make it something that fits the individual’s budget to make the debts easier to manage.

This buys the debtor time to repay the property taxes. Once the property taxes are in the Chapter 13 distribution, the debtor receives an automatic stay. This prevents the taxing authority and mortgage provider from performing collection activities.

Even though property taxes are not dischargeable in bankruptcy, help is available. Debtors who have fallen behind do not have to lose their home if they take advantage of Chapter 13 bankruptcy protection. With the help of a Chapter 13 repayment plan, debtors can protect the home and avoid the pitfalls of back property taxes.

Chapter 7 and Property Taxes

Though property taxes are not dischargeable in Chapter 7 bankruptcy, Chapter 7 may be able to help debtors in other ways. By discharging credit card debt and similar debts, debtors may be able to free up enough money in the budget to address back property taxes. This strategy only works if the home is not in danger of foreclosure yet. Bankruptcy attorneys can help debtors weigh their options to deal with back property taxes.