If you are having difficulty paying your bills, bankruptcy might seem like an easy answer. However, there is nothing easy about bankruptcy. In this article we will discuss some hard truths about filing for bankruptcy, and what to expect if you choose to file for bankruptcy.

1) Two kinds of bankruptcy
There are two different ways to file for bankruptcy if you are an individual. Chapter 7 will permit unsecured debts to be discharged, while Chapter 13 forgives a portion of the debt and requires the filer to set up a payment plan for the rest. It's important to note that certain types of debt, such as back taxes and student loans, cannot be discharged and must still be paid. If you choose to file for Chapter 7, you can expect that the majority of your assets and accounts will be seized to pay any debts that are still outstanding. Both Chapter 7 and Chapter 13 will stay on your credit report for several years.

2) Not everyone who wants to file for bankruptcy is able to do so.
In 2005 a law was passed to make it more difficult to file for bankruptcy. If you wish to file for Chapter 7 you must meet certain requirements regarding income and the ratio of disposable income to debt. If you do not meet these requirements then you will be forced to file for Chapter 13.

3) Financing major purchases.
After you have filed for bankruptcy you will likely still need to secure financing for any major purchases, such as an auto loan. There are companies that work exclusively with individuals who have filed for bankruptcy, but the loan terms will almost definitely require a high down payment or have a high interest rate. Understand that you are not being punished for past mistakes; the lender simply cannot give you the same terms as a prime borrower because you do not represent a good financial risk. As such, special loan terms might be necessary to offset the risk you represent.

Recovering from bankruptcy can take time, but it is possible. Discuss your options with a bankruptcy attorney to find out if this is the best path for you. 

Chances are good that you know someone who has been a victim of identity theft. Perhaps you have been a victim yourself! Identity theft is a widespread problem and can make it very difficult to get credit for larger purchases, such as an auto loan. If you are unfamiliar with what identity theft involves, here is what you need be aware of.

1) Identity theft is more than just stealing your credit card number.
If all identity theft involved was stealing credit cards, it wouldn't be such a big problem. If someone gets ahold of your credit card, odds are good that you'll find out about pretty quickly. You'll review the card statement, see charges that you don't recognize, and contact the credit card company. They in turn will reverse the charges and go after the guilty party. In some cases, the credit card company is even more proactive, and freezes the credit card or calls you as soon as they see unusual activity on your card. Identity theft is more covert. Rather than just stealing your credit card number, the thief steals your information, such as your social security number or address. It's likely that you won't even realize that the theft has taken place until after the damage has been done. You'll apply for an auto loan or other financing, and the lender will tell you that you do not qualify because of defaulted credit cards and other lines of credit that you didn't open.

2) Most people know the person who stole their identity.
Although there are people who dumpster dive to get information, they are more the exception than the rule. In most cases, when people find out the source of theft, it's usually someone they know. Friends and family members are usually the culprits. Even parents have been known to steal the identity of their children! It's important to not leave your personal information lying around your home where other people can easily access it.

You may not be able to stop identity theft from occurring, but there are things you can do to make it harder for your identity to be stolen. In a future article we will discuss further what you can do to stop identity theft. 

While most cars have a wide variety of bells and whistles, special features that are actually useful to the driver can actually add to the ease of use of the car. They might not be the flashiest features, but after having a vehicle with them for awhile you won't be able to imagine living without them. Here are somethings to look for when you are shopping for your next car and auto loan.

Keyless Locks
On newer cars, you might be surprised to learn that you can purchase a car which has a small remote control, but no key! In fact, locking and unlocking the doors is as easy as pushing a button. The 2008 Nissan Altima has small buttons on the door handles that you push to unlock the car. If the car senses that the key fob is within about 3 feet of the car, it will permit the doors to unlock. In addition, the trunk can be opened with the push of a button. This feature comes in especially handy when your hands are full and you need to unlock the car.

Remote Start
Some couples work out a system where one person goes out ahead of the other to warm up the car. But now neither person has to be left out in the cold! Remote start is a feature that is becoming more and more common on many cars. By pushing a button on your car's key fob, the car starts and also begins running the A/C or heat, as your preference may be. Normally the engine will run without the presence of a key for a designated period of time before shutting of, usually about five minutes.

Maintenance Alerts
Gone are the days when you would need to keep an eye on the little oil change sticker in the corner of your windshield. Your car can now let you know when it's time to get an oil change, as well as a number of other routine maintenance items.

While entertainment centers and good car stereos are definitely fun, make sure you are also looking at features that will make the car more convenient. You'll be glad you did! 

After your auto loan payment, you next biggest car-related expense is usually the insurance. Deciding how much and what kind of insurance to carry can be tricky. Here is a break-down of the various types of car insurance that you can choose to carry.

Liability Insurance
In most states, there is a minimum amount of liability insurance that you must carry by law. Liability covers any damage caused to another person's vehicle or property. It will also cover medical expenses related to the accident. If possible, you should opt to carry more than the minimum, because if you are determined to be at-fault in the accident you'll have to pay out-of-pocket for any expenses beyond the insurance coverage.

Comprehensive and Collision
While liability will cover the other guy, comprehensive and collision will cover your car. Usually sold together, these two types of insurance will cover just about any situation that causes damage to your car. Collision will cover your car in the event of an accident, while comprehensive covers situations like theft, weather damage, and vandalism.

No-Fault Insurance
In some states, such as Michigan, there are no-fault laws for accidents. This means that regardless of who is at fault, each motorist pays for the damage to their own vehicle. Your local insurance agent will be able to tell you whether you reside in a no-fault state, if you don't already know.

Gap Insurance
Liability, Comprehensive & Collision, and No-Fault all cover repairs to your vehicle in the event of an accident, while gap insurance will cover you in the event that your vehicle is totaled while still paying off the loan. If you owe more than the value of the car at the time that it is totaled, gap insurance will cover the difference. It could be worth carrying gap insurance if you have a longer loan term.

Although all types of insurance have their benefits, you may not need all of them. If the car is older, paid off, or you have a larger emergency fund, you may be able to avoid purchasing comprehensive and collision insurance. Think about your budget and go with the insurance plan that makes the most sense for you. 

In a previous article we discussed what identity theft is, and who it is most commonly committed by. After reading this article you are no doubt eager to do what you can to protect your credit and by extension, your reputation. Going on the offensive against credit thieves can save you a lot of hassle in the future. You'll have peace of mind knowing that can apply for an auto loan or other major financing with no surprises. Here are some things you can do to protect yourself from identity theft and make more difficult for thieves to get away with their crime.

1) Review your credit reports from all three bureaus.
By law, TransUnion, Experian, and Equifax all permit you to get a free copy of your credit report once a year. These three bureaus have teamed up to sponsor the website AnnualCreditReport.com. From the home page of AnnualCreditReport.com you will enter your state, and then additional information. Note that this website is secure, so any information you enter here is safe from prying eyes. Once you get your credit reports review them and make sure that you do not see any lines of credit that you do not recognize.

2) Shred sensitive documents.
While dumpster diving is a less common form of identity theft, it does still exist. Make sure that you shred old bills and other documents with sensitive information before putting them in the trash.

3) Beware of "shoulder surfers".
If you shop online, be wary of people who watch you enter your information over your shoulder. This can happen at work, in a public area like a coffee house, or even in your home. Do not permit others to see you entering credit cards and other information. Also be wary of sharing passwords. Many people use the same passwords over and over for various accounts, making it easy for thieves to log into your accounts.

4) Consider signing up for a monitoring service.
All three credit unions offer credit monitoring services. There are also companies such as LifeLock and Zander Insurance which will work to help you clean up the mess should identity theft occur. Usually there is a monthly fee for this service, but if your identity gets stolen it is well worth it. Do some research on your own and sign up with the one that is best for you. 

One of the best options available for auto loans is to go through a credit union. As a non-profit organization, credit unions can offer lower interest rates and better service. Membership requirements can vary, and some are very unique. Here are some of the more unusual credit unions in the United States.

Credit Union for Kids
CP Federal Credit Union not only offers products for children, but it also has actual working branches inside several elementary, middle, and high schools in Michigan. These branches are staffed by youth volunteers and even managed by students. CP Federal Credit Union's goal is to give students hands-on experience with managing money, and in turn make kids more financially responsible. Students are responsible for all aspects of the credit union, including advertising, office management, and customer service.

Credit Union with No Locations
Based in Illinois, the Air Line Pilots Association Federal Credit Union is 6,000 members strong and boasts members in all 50 states. Because pilots have work schedules that require them to travel from city to city, ALPAFCU makes it easy for pilots to manage their money by conducting all transactions online. ALPAFCU's product offerings are short and long term savings; they do not offer checking accounts. They also offer loans and credit cards with lower than usual interest rates.

Family Credit Union
In most cases, FCU stands for "federal credit union", but in at least one case it could also stand for "family credit union" The Lee Federal Credit Union has almost 1000 members, all who are part of the Lee family. This unusual credit union is based in San Francisco but has sister credit unions also in Houston, Washington DC, Los Angeles, Boston, and Chicago. The only requirement is that you are part of the Lee family, or related (by marriage) to someone in the Lee family.

Most credit union membership requirements are specific to workplace or location of residence, but there are certainly exceptions. Find out if you qualify for membership at your local credit union by visiting their website. 

When choosing which car your auto loan will finance, one of the things you'll likely consider is the safety features of the vehicle. For female drivers, this might be even more true. In addition to the built-in features that come with the car that you purchase, there are also accessories you can keep in your car to ensure your safety on the road. Here is a list of items that no woman should be without in her car.

First Aid Kit

A large first aid kit is a must for the trunk of the car. You can purchase them pre-made, or make one of your own. Included in the kit should be items such as band-aids, bandages, gauze, pain killers, spare medication, pain killers, and forceps or tweezers. You should also carry a supply of drinking water, for rehydration and cleaning wounds.

Mylar blanket and regular blanket

If you are in a colder climate, you'll definitely want to make sure that you have at least one mylar blanket and regular blanket for each family member. Mylar blankets are thin with a metallic appearance, and reflect body heat back to the person wearing them. If you wrap yourself in the mylar blanket first and the regular blanket second, you'll stay toasty warm while you wait for help.

Jumper Cables and Jump Starter

Should you find yourself with a dead batter, you'll definitely appreciate having a portable jump starter and jumper cables. Many of the portable jumpstarters come with a rechargeable battery so you'll always be ready to go. They also have regular outlets to power smaller electronic devices and sometimes even include an air compressor to allow you to re inflate your tires, if necessary.

Compared to the cost of your car, you'll find that the cost of these items is very low, so there really is no reason to be without them. Hopefully you'll never need any of your emergency items, but if you use them even once, you'll agree that it was money well spent.

Are you mystified by how lenders determine your loan payments? Your loan payment is not a magical number conjured out of thin air. In this article we will break down how a loan payment is determined. In this example, we will assume that the loan is set up under simple interest, which means that the interest percentage is compounded monthly. We'll also assume that the loan will begin immediately.

To figure out your loan payments you need to know:

- The loan amount (P)
- The term (or length) of the loan, in months (T)
- The interest rate, expressed as a decimal (I)

To make the calculations cleaner, we'll also say that (J) is the monthly rate of the interest: J = I/12

To figure out our monthly payment (M), the formula looks like this:

M = P x (J/(1 - ( 1 + J) ^ -T)) << Taking 1 + J to the minus-T power, then subtracting this from 1.

For example, let's say that you have taken out a loan of $12,000. You have opted for a loan term of 48 months at 9% interest.

First, assign values to each variable:

Loan amount (P) = 12,000
Term of loan in months (T) = 48
Interest rate as a decimal (I) = .09

Next, we calculate the decimal form of the interest (J) : .09/(12) = .0075 = J

Now we are ready to plug the values into the formula:
 
M =$12,000 x (.0075/ (1- (1 + .0075) ^-48))

M = $12,000 x (.0075/ (1- (1.0075)^.48))

M = $12,000 x (.0075/(1 - .6986))

M = $12,000 x (.0075/.3014)

M = $12,000 x (.0249)

M = $298.80 per month!

As you can see, the math involved is not all that difficult. If your calculator has a x^y button it is easy to figure out your payment. This is a standard feature of Microsoft's calculator when viewed in Scientific mode. However, if calculating this makes your head hurt, take heart. There is no need to do these calculations yourself. Several websites are available online to calculate the payments for you, using the same formula as described above. Spreadsheet programs such as Excel also have formulas like this one built in, although admittedly this is an advanced feature and requires knowledge of how to use formulas in a spreadsheet.

Why go through this exercise? Simply, this can help you determine whether or not you can afford the car you want. When you plug the numbers into this formula, it quickly becomes apparent whether or not the monthly payments will fit in your budget, saving you from a potentially embarrassing situation at the dealer.