Post-Mortem Finances: Understanding How Bankruptcy Impacts Your Will

When you file for bankruptcy, the goal is to eliminate excessive debt entirely or to agree to debt repayment with the assistance of the court. However, there are certain debts that cannot be eliminated, such as child support and payment to injured parties in a lawsuit, and debtors may also experience other financial repercussions from this process. But can those repercussions extend beyond the life of the bankrupt individual? How should bankruptcy be accounted for in your will?

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How To Write Your Own Will

A will that outlines your wishes in the event of your death is one of the most important documents you will create in your lifetime. It doesn’t matter how much you have acquired during the course of your life; this document will outline what you would like to have happen to the possessions you do have. Here are some tips for writing your own will.

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5 Important Things To Consider Before Seeking Legal Advice

There are some circumstances in life where getting lawyers involved seems to be the most logical solution. While legal professionals certainly have their place and can be very helpful in settling many matters, it’s best to think carefully before rushing into your local law firm. Asking yourself some key questions will help you:

• Prepare for your initial consultation
• Ensure you are seeing the right lawyer
• Help you confirm that seeking legal advice is indeed your best cause of action.

Here are five of the core things to consider.

1. Which Area Of Law Is Relevant To You?

The field of law is extremely broad. When seeking a legal representative, make sure you are looking for professionals in the right niche. For example, if your liberties have been violated, you should seek a civil rights attorney. If you’ve been injured in a car accident, you should look for a personal injury firm, such as Sinnamon Lawyers. Understanding which specific area of law your case falls under will help you find the most appropriate lawyer.

2. Have You Got Your Story Straight?

Piecing your story together can be a frustrating and time-consuming process for both you and your chosen lawyer. To help things run smoothly and give your law firm clarity, it’s a great idea to pre-emptively write a comprehensive summary of the circumstances that have led you to seek legal representation. Include all relevant details, including the names and contact details of third parties involved, dates and times, specific locations, and anything else you feel would be essential for your lawyer to know.

3. Could You Handle It Yourself?

Depending on your circumstances, you might consider representing yourself instead of hiring a law firm. If you have the time, resources and legal knowledge to do so, this is certainly an avenue worth thinking about. However, keep in mind that courtrooms can be quite intimidating places for the inexperienced, so self-representation definitely isn’t for everyone!

4. Is The Time And Effort Worth The Costs?

While many firms operate with a ‘no win, no fee’ policy, this isn’t always the case. In any event, the time and emotional energy poured into legal proceedings can never be bought back, particularly if your lawsuit ends up going nowhere. Seeking legal advice is a good way to clarify if a tricky case is worth pursuing, but if just a little objective thinking can reveal that your efforts won’t amount to anything, it might be best to skip the initial consultation altogether and focus on moving on with your life.

5. Have You Chosen A Firm You Can Rely On?

Sadly, not every legal agency delivers great results and service. If you have decided to go through with seeking legal advice, you certainly don’t want a dud lawyer. When choosing between the firms in your area, look for companies that have a reputation for excellence. Many will claim to be the best, but fewer will back this up with evidence – consistently positive outcomes and testimonies from satisfied clients are two of the things to look for.

What kind of things do you stop to consider when you seek legal advice? Share your tips and past experiences in the comments below to help out other readers.

Local Banks vs. Global Banks

The retail banking market in the UK is currently dominated by huge global organisations, such as Barclays, Lloyds, and HSBC. Smaller, local banks are often overlooked for these major chains. This article by Misys examines how even in emerging markets such as the Philippines, global banks are taking over and posing a strong threat to local banking businesses.

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How To Safely Use Your Credit Card

picIt’s no secret that credit card companies can be a little unscrupulous. There are all sorts of tricks that they use to ensure that they are making money from you in as many creative and ingenious ways as possible.

For example, you may have assumed that making a larger payment than the monthly minimum would mean that you are paying off your card quicker than if you simply make the minimum payment. Unfortunately, there are a large number of companies that have found a way to make sure you keep paying the maximum amount of interest.

Credit card overpayments can cost you more

Many card companies including Santander, The Bank of Scotland, Halifax, Lloyds TSB and Barclaycard have all come up with a trick to counteract the benefits of making an overpayment on your credit card. If you pay more than the minimum amount one month, they will reduce your payment the following month, making that overpayment a complete waste of time.

If you are paying more than the minimum to reduce your debt faster and pay less interest, you really need to be aware of this trick. Paying just  50 extra could result in savings of up to  40 on the interest alone, so it’s little wonder that the card companies have found a way to get around this. Keep a close eye on your statements to make sure that your card company isn’t doing this to you too.

How to avoid other credit card cons

There are more than 40 different tricks that the credit card companies use to ensure you are paying the maximum amount of interest to them. Some of them are quite complicated, so you really need to be aware of what they are doing to maximise their profits. Here are some tips to help you safely use your credit card and avoid paying more than you have to on your debt.

Set a monthly budget that will allow you to overpay as much as you can on a regular basis. This will help you to get the balance down faster and save you money on interest. You also need to remember that even with a 0% interest card, you’ll need to make the minimum payment every month or face penalty charges plus damage to your credit score.

If you are on a 0% deal and only paying off the minimum, aim to put away the difference into a savings account so you can clear the balance at the end of the promotion. There’s no guarantee that you will be able to transfer the balance onto another deal once your current promotion expires.

Never use credit cards to withdraw cash, whether domestic or foreign currency. You should also never use your credit cards for gift vouchers or gambling. Cash advances cost you more, so read the fine print carefully before you make a withdrawal.

Shop around to get the best APR (standard interest rates). Make sure you know when any introductory offers are coming to an end and switch providers before you get landed with extra interest payments.

Check your statements carefully to make sure you aren’t getting extra charges put on your bill. Also be wary of any credit card that offers “exclusive” financial services products such as insurance or travel deals.

Always check your statements carefully and don’t be tempted to max out your credit limit. If you believe there has been some discrepancy, contact the Financial Ombudsman Service and you’ll receive advice as to whether you have been mis-sold.

Is Paying off your Mortgage Early the Best Idea?

picPaying off your mortgage early can make sense for lots of people. After all, it’s almost certainly the biggest debt that anyone has and the sooner the mortgage ends, the sooner you can free up more disposable income.

Clear other debts first

But before you start looking into how much you can afford to pay off, you need to do a review of your finances. If you have other debts, for example a loan or credit cards or store cards, it will almost certainly make more sense to pay these off first.

Mortgage rates are historically low at the moment and will always be lower than credit, debit or store card rates, which can come in at well over 20%. Even if you have relatively small amounts of debit on cards such as these, it’s always best to clear them first as the amount you owe can quickly accumulate.

Review your mortgage

Once you have sorted out other debts, you can look at your mortgage. One of the first things you should do is review your mortgage product. Explore if you can move to a deal with lower rates, but remember to check if you have an early redemption fee on your current mortgage and any fees you might incur on a new one.

You will also need to check with your lender that they will allow you to make overpayments and also any possible restrictions on the total amount you can pay off early without incurring penalties. Remember to factor this into any decision you might be taking about switching provider.

How much can you overpay?

You now need to decide how much to overpay and how. Look at your household expenses and work out realistically how much you could afford in extra mortgage payments. Ask your lender to make a calculation for you so you know how much of the term of your mortgage you will potentially shave off.

That can act as a great incentive too, when you realise how much more quickly you could be mortgage free.

If you have a fully flexible, it may be possible to get back the money you have put into the mortgage in overpayments, but check with your lender. If you can get the money back, it removes the risk of tying up the money in the mortgage and could help you decide to overpay more.

Check with your lender when your interest is calculated. If it’s daily, any overpayment will make an immediate impact and start working for you. However, if it’s annual, it will be better to save the money in an easy access account, earn some interest on it and then put the money into your mortgage in the days running up to when the interest is worked out.

Other benefits

In addition to shortening the mortgage term you can also increase the equity in your home. This can be helpful, even vital, if you have little equity or are in negative equity. It will make it easier to move to a more competitive mortgage deal as these are often reserved for customers with more equity in their homes. It can also help you to get a better rate if you are planning to move house.

Life Insurance – What Cover Do I Need?

picLife insurance, or life ‘assurance’ as some people call it, is a very important element when considering the financial future of your loved ones when you’re gone. The type of policy you can get, or the amount of life insurance that you need, really depends on your individual circumstances, like whether or not you have a mortgage, debts, grandchildren, or other financial ties that you want to look after.

When comparing life insurance quotes, you will need to make sure you have calculated exactly how much you need, whether you’re going to cash it in later on in life –retirement purposes, for example – or you wish to pass on the sum to your elected beneficiary. Furthermore, the acceptance of your policy will also depend on your mental and physical state, as well as unforeseen medical issues, like genetic illnesses, etc.

One of the biggest considerations about life insurance, assuming that you’ve found the right policy, is whether or not you can afford the premiums. Premiums are the payments you make to your insurers, weekly, monthly, annually or yearly (yearly usually offers the best discounts), that will allow you to receive your cash sum when you die. The more benefits you have on your life insurance policy, the higher the premiums will be.

Covering Your Mortgage

As there is no ‘one size fits all’ life insurance policy, you’re going to have to prioritise the financial elements that you want your policy to take care of. Again, this will vary from individual to individual, but there are a few financial responsibilities that nearly all people are tied to – like a mortgage for example.

Mortgage repayments will certainly be the biggest debt most people will leave behind if they suddenly die, and if you’re the main breadwinner in the family, the last thing you’d want is for that debt to be passed on to your loved ones. Making necessary provisions for circumstances like these is where life insurance comes in. Some mortgage lenders actually require you to buy life insurance with your mortgage, to cover the cost in the event that you die.

If you already have life insurance, now is the time to check whether it will cover the cost of your outgoings. Over the last few years, mainly due to the global recession, many life insurance policy premiums have gone up, but if you’re not getting a bigger pay-out for this premium increase, then maybe it’s time to consider another policy.

Childcare Expenses

Children, grandchildren and great grandchildren are also an important consideration when choosing a life insurance plan. Everyone wants to leave something to their young loved ones when they die, so you’re going to want the policy with the biggest pay out, whether it’s when you die, or when you cash it in.

As a parent or grandparent, totalling up the ‘unpaid’ expenses that you have to fork out for is vital when comparing life insurance policies. Furthermore, childcare, college funding and other financial elements of raising young family members must also be considered.

Top Mistakes Made When Buying Home Insurance

picWhen you’re considering taking out home insurance, there are many things to think about – the value of your home against the outstanding mortgage is one of them. Overlooking the following points when looking for the best home insurance deals could prove costly, and you could see your premiums sky rocket. Always remember to seek the advice of an independent financial advisor when selecting buildings or contents insurance.

Price and Value Are Not The Same

Don’t get sucked into the false economies of home insurance – price is not the same as value. Indeed, you could save a few pounds by taking out a standard, run of the mill home insurance contract, but you could end up losing hundreds of pounds due to inadequate cover. Always insure your home for what it’s worth, never anything less, and in some cases a little bit more.

Don’t Be Blinded By Big Words

‘Special’, ‘Bespoke’ or ‘Deluxe’ insurance policies are no different from the hundreds of home insurance quotes on the market – so don’t be fooled by enticing words. ‘Specialist’ insurance doesn’t always mean costly or expensive, and you could get a great package for the price of a standard one. Comparing the market is essential when looking for home insurance, and in some cases it only takes 15 minutes of searching online to find better deals!

Never Under Value

Your home and its possessions are two of the most valuable assets you own, so never under value them. If your home is worth more than average, undervaluing it can cause serious financial headaches if you were ever to claim on your insurance policy. Yes, your premiums will be a lot lower if you under value, but if you needed to claim due to an unforeseen event, then the pay-out won’t be anywhere near as much as you need to make repairs!

Always get two opinions on the value of your home – one from your potential or current insurer, and the other from an independent advisor. This way, there’s no chance of your home being undervalued, and you can’t lose out on your home insurance if you were ever to claim.

Insurance Is Rarely All-Inclusive

If there’s one thing you must remember, never be ignorant with your insurance policy, because there’s a good chance that one or two eventualities won’t be covered. A standard policy is likely to include just the basics, and a cap of how much you can claim. Don’t think that just because you’re home in insured, that it’s insured from all types of damage.

In many cases, water damage is an optional extra that needs to be taken out separately from your home insurance. It may only cost a few extra pounds a month to cater your policy to cover all damages, so always make sure you know what you’re protected against.

Finally, don’t forget to do a bit of digging on your insurance company. If they have a track record of not paying out maximum value on their customers’ policies, then make sure you steer well clear.