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5 Crucial Things To Keep In Mind About Bankruptcy

5 Crucial Things To Keep In Mind About Bankruptcy

Whether you’re on the road to bankruptcy, or thinking about declaring your business in a state of bankruptcy, this process isn’t as clear-cut and simple as you might initially think.

In Canada, it is largely due to the fact that it is a federal government affair and requires a fair amount of paperwork and legal proceedings. This can take a huge amount of time and money out of your life. Fortunately, the bankruptcy system has been designed to keep the cost of bankruptcy as low for you as possible.

However, you should know that you’ll also lose all your possessions and all your money unless, of course, your possessions are assets – then they’re exempt (as long as they are in your particular province).

Let’s quickly delve beyond the surface of bankruptcy and discern what it’s all about.

1. Bankruptcy Costs

Usually, the process of bankruptcy includes fees, such as administrative costs, government-fees (for the bothersome task of filing all the paperwork), mailing costs, court fees, etc. This, as you can imagine, takes a lot of money out of your account(s).

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The average cost of bankruptcy (usually – as it varies between provinces) is between $1,500-1,900. The differences in cost is wide because, largely, the fee is set by your Insolvency Trustee. The trustee’s charge is a reflection of the Office of the Superintendent of Bankruptcy (OSB).[1] Keep in mind that the trustee’s charge is a reduced fee. This fee is based on what number your chosen trustee charges to file your bankruptcy paperwork.

You need to pay due diligence when it comes to picking an attorney to represent you in bankruptcy court. This is because there are some reports of attorneys collecting their fees and “dumping” the filing process and proceedings on another attorney’s shoulders. This is why it’s necessary to perform thorough background checks on attorneys and lawyers. Luckily, looking for reviews and testimonials and public ratings about such attorneys are easy to find, thanks to the internet.

However, if bankruptcy costs are more than you can pay, it’ll be to your satisfaction to contact a licensed Insolvency Trustee.[2]

2. What’s the Difference Between Lawyers And Trustees?

A trustee is a licensed official (by the federal government) who works with specific insolvency issues.[3] Many trustees are chartered accountants.

Bankruptcy lawyers, on the other hand, are solicitors who are experts when it comes to insolvency law.

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Unless a bankruptcy filing has several discrepancies, lawyers are not generally required in most cases.

3. How Bankruptcy Lets You Rise From The Ashes

Since bankruptcy is governed by federal law, the process is similar from state to state and it’s a process that will keep you busy.

Be careful when filing for bankruptcy. Your credit score can take a serious beating, since bankruptcy lowers your score by as much as 250 points, which, as you know is not peanuts.[4]

It’s a great way to erase your debt, however. Bankruptcy gives you a fresh start, a chance to wipe the slate clean, and a way to rebuild your credit score. If your bills haven’t defaulted (and your debts are through the roof), there’s a possibility your credit score is high enough to pass you through a mortgage refinance. This could potentially qualify you for a lower interest rate.

Since lower interest rates reduce monthly house payments, this means more freed-up cash in your budget so you can pay off any outstanding debts.

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4. What Does Bankruptcy Affect?

Don’t worry, if you’ve invested in 401k, IRA, or ERISA accounts, they’ll (in all probability) remain unaffected by the bankruptcy.

That means you do not take any money from these accounts to pay bills. Even if you’re pressed against the wall and these look like great last resorts, do not. The reason for this is simple: you’ll be hit with staggering penalties and taxes. These can never be discharged and will forever remain on your credit score. This makes it extremely hard to attain home loans in the future, which is why you should NOT take bankruptcy lightly. That is why you should check your credit report 60 days after you bankruptcy case closes. That way, you can check if there are any errors. It’s critical to stay on top of the report after bankruptcy, as there may be some mistakes.

After filing for bankruptcy, check your mail every single day. The court should send you legal paperwork that needs your signature by a certain date. Missing this paperwork means your case loses momentum and you’ll be stuck in this state for an even longer period. Once these documents arrive in your mail, review them carefully. And review them again to make sure you haven’t missed anything crucial.

And once you’ve set up an appointment or discussion with your attorney, update him/her on any relevant information that’s happening in your life because the more your attorney knows, the more successful your case will turn out. Your life and income (even your family’s life) is on the line here. Good, constant communication is key.

5. You Shouldn’t Declare Bankruptcy If…

You don’t need to go bankrupt just because you’re unable to pay your debts or are insolvent. Declaring bankruptcy seems like a smart thing to do when tides are low, but the reality of the situation is this:

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Sometimes bankruptcy is not a good option.[5]

It honestly depends on your situation. Let’s say a huge number of your debt is because those debts aren’t dischargeable. It would be inadvisable to file for bankruptcy. This is because non-dischargeable debts, such as child support, fines and penalties, student loans, etc. will remain on your record. Bankruptcy means that only debts that are dischargeable will be erased from your record.

Even so, it’s more important to know if you even need to file for bankruptcy. This is because a large amount of cases come down to credit or debt counseling. Knowing how to expertly handle your debt and credit scores/cards increases the likelihood that you won’t have to file for bankruptcy in the end.

Conclusion

Now you know more about bankruptcy and how to make wiser decisions. If, however, it’s too late and filing for bankruptcy is an absolute must, it is essential for your sanity and happiness that you remain cool, calm, and collected as you go through this process.

Featured photo credit: palmistryextraordinaire via palmistryextraordinaire.com

Reference

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Maya Levine

Passionate Writer & Researcher

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Published on January 17, 2020

How to Eat Healthy on a Budget (The Definitive Guide)

How to Eat Healthy on a Budget (The Definitive Guide)

Have you ever looked at health gurus and wondered how on earth they can afford all that health food? Or maybe you’ve tried multiple times to start eating healthy only to find the $600 monthly budget overwhelming?

If you’re anything like me, you know exactly what I’m talking about! I absolutely understand the sinking feeling of looking back over a grocery budget and finding you went way over what you intended. And besides that, it can be hard to justify buying a tiny $5 bag of carrot chips while a $1 mound of potato chips is sitting right next door.

My husband and I recently ran into that struggle. We got married this past year and soon found ourselves trying to balance 12 hour work-days with keeping our relationship strong and trying to keep our personal businesses afloat. Granted, our budget was the one thing that took a hit! After we started tracking our spending, we were shocked to see we were spending over $1000 a month just on food! A little planning cleared that right up.

So, how to eat healthy on a budget?

Here’re the top tips I learned that helped us shave over $600 monthly off of our food budget so we could reinvest that in the areas that really mattered to us![1]

1. Meal Plan

You’ve probably heard the saying “Fail to Plan, Plan to Fail” right? Well, this saying couldn’t be any more true than in the area of healthy budgeting! The fact is, most healthy foods don’t actually cost that much… the pre-made time saving ones do!

If you go about creating a healthy meal plan within your budget, you could easily cut costs down to around the same price you are paying for junk food.

Meal planning is as simple as working in foods you already have in your fridge/freezer, adding in several meals with simple ingredients and seasonal veggies, and breaking it down into a shopping list.

Often, finding a few meals to make in big batches will save you the most money in the long run, which leads me to my next point.

2. Cook in Bulk

Not only will cooking in bulk save you a whole lot of time, it will save you a whole lot of money too! Believe it or not, if you find meals to make with similar ingredients, you can easily save more money than when you were eating unhealthy.

Don’t believe me? Just look at a $4 frozen pasta dinner. Now, sub that with a veggie pasta dinner. 5 zuchinni ($3), Pasta sauce ($2.50), and chicken ($5) could last you a full 5 meals which adds up to a whopping total of just over $1 per meal!

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That’s not even digging in to all the money you will save from fast-food. Trust me, a little $10 spent here and there add up! You’ll be saving a whopping amount from all the meal prep you will do!

3. Cook all Your Meals in One Day

The science behind this is 2-fold.

Number one, if you have lots of meals to grab and go, you will be far less likely to binge on pricier food when you get hungry. Let’s be real, you’re not going to spend 1 hour cooking when hub-n’-grub is at your bekon-call!

Number 2, meal prepping ahead of time will help you stick to your meal plan better when you’re not in the mood. Let’s face it, we’re all going to have days when protein and veggies doesn’t exactly sound appealing. But, if you have a full meal that’s quick to grab in the fridge, it will be easier for you to fill up on the good stuff rather than spending money on what you don’t really need.

4. Cut Back on Snacks and Specialty Items

I can almost hear you from across the screen. “But, I thought snacks were good for me!” Here’s the deal: Snacks are expensive! And healthy snacks, oh my goodness, say goodbye to your paycheck!

Look, I’m definitely not saying that healthy snacks are bad. Quite frankly, I would much rather you chow down on Halo Top than a triple-butterfinger-fudge sundae. It’s just that… healthy snacks are why eating healthy gets a bad rap for being expensive.

Look at it this way: You could either buy a week’s worth of groceries full of chicken, fish, beans, veggies, and fruits for $30. Or, you can spend that $30 on six snacks that will leave you hungry for more.

What’s more, the ingredients for gluten-free baked goods, sugar free substitutes, or protein powders alone will add up to you eating a full week’s budget in one sitting. By all means, if you want to work some yummy items into your budget, do it! But don’t confuse that extra monthly $300 of delicacies as a necessity. Your body and budget will thank you!

5. Satisfy Yourself with Your Favorite Subs

We all have an emotional tie to food. Maybe pasta reminds you of home! Or maybe a fresh-baked pizza is what gives you a feeling of comfort. Whatever you favorite food, find a way to work it into your budget in the best way.

We’re only human, and depriving ourselves of what we love will never end well. More often than not actually, it ends in take-out or a pricey-premade substitute.

Instead of finding yourself in this situation, find a way to make your favorite foods fit your budget. Zuchinni noodle pasta might just give you that feeling of home without breaking the bank. Or maybe you could google a healthy pizza alternative you would like that you could make at home. Often, something similar to your craving will be enough to give you a sense of satisfaction.

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Or, just buy your cheat meal and save it for a special day. That’s okay too!

6. Stick to the Cheaper Proteins

Okay, I know we all love steak. Unfortunately, buying pre-cooked or expensive cuts of meat are one of the easiest ways to drain a budget.

Instead of purchasing those, try buying frozen chicken or eggs. A 5 lb bag of frozen chicken can be as cheap as $5, and you can buy a whole weeks worth of eggs for just over $1. You could even try going vegetarian for a few meals if you really want to cut down on costs!

7. Buy Frozen Fruits and Veggies

I know, we all love our fresh fruits and veggies! However, sometimes frozen might be the way to go if you’re looking to cut costs!

Fruits and veggies are easiest to ship when frozen, making them a much cheaper option. Contrary to popular belief, scientists have actually found that frozen might be better for you too![2]

The reason is, frozen produce is picked at its prime and shipped immediately. Fresh fruit tends to be picked much earlier so it will ripen while being shipped. Not only does this make it less nutrient dense, but sometimes the fruits are actually pumped with artificial flavors to make up for the lack of real nutrients.

While I’m all for fresh fruits and veggies, don’t feel guilty if you opt for frozen foods due to a budget.

8. Bump up the Calories with Rice and Beans

The problem some people find when trying to eat healthy is that it can be hard to get the amount of calories you need without relying on expensive “specialty” items. Instead of stocking up on pricey gluten-free breads and pasta, I say stick to simple rice and beans as the bulk of your meals.

Brown Rice is very cheap and easy to use as a base for bowls and dishes. Likewise, beans can add a bit of fiber making you feel full and satisfied without having to spend a lot of money.

If you are trying to cut on body fat, use extra veggies as the bulk of your meal and add in rice and beans as a filler.

9. Try Acai Bowls

Acai Bowls can be a really cheap and satisfying meal as long as you do it right.

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You can find cheap fruits at most stores or just freeze your fresh fruits before it goes bad.

Making your own granola can save you a lot of money as well. The total cost for this delicious meal should only add up to a few dollars compared to triple that price if you were to buy one pre-made.

10. Make Your Own Meal Kits

Do you like your meals freshly cooked? Sending meal kits to your doorstep is an easy way to drain your budget. Instead, try making your meal kit at home! Not only is it fun, you will easily get a delicious taste.

Simply find a few simple meal cards or print some out and fill a ziplock with the ingredients for each specific day. Don’t know what recipe to make? Another option is to order one month of meal kits and recycle the recipe into ingredients for the upcoming months with ingredients you picked up from the store.

11. Don’t Drink Your Calories

A few dollars spent here and there can really add up! Just as with specialty items, healthy drinks can be a blackhole for you. An energy drink and kombucha and coffee each day could easily have you spending and extra $300 each month!

I you really need a special drink fix, try making your favorites at home. Bring a coffee in, make kombucha, or even try making lemonade with stevia or a healthy soda. You’ll be surprised w hat a big difference such a small change can make on your budget!

12. Buy Cheap Online

Just like anything else, it pays to be prepared. Buying foods from online retailers can be a really affordable way to save money as long as you’re prepared.

Plan ahead for those more expensive specialty items you can’t live without. It will save you tons of money compared to having to buy food from a specialty store.

13. Don’t Fret about the Clean Fifteen

One of the huge things that can mess with a person’s budget is eating organic. For the record, I am 110% all for eating organic whenever you can. However, for some people, it can be hard to make organic food fit into a budget.

Instead of scratching healthy eating for a smaller budget, try to buy meat and the dirty dozen organic, and don’t go crazy about the rest. The clean fifteen are the fifteen safest foods to buy that aren’t organic! Meanwhile, the dirty dozen is the most worthwhile avoiding. According to Produce Retailer, these are the dirty dozens:[3]

  1. Strawberries
  2. Spinach
  3. Kale
  4. Nectarines
  5. Apples
  6. Grapes
  7. Peaches
  8. Cherries
  9. Pears
  10. Tomatoes
  11. Celery
  12. Potatoes

14. Pay Attention to Storage

Keeping the food you have is just as important as how much food is in the first place. Try to stay on top of how much produce you can actually use before it goes bad. It might not be a bad idea to pencil an extra shopping trip in the middle of the week to keep food fresh.

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Investing in good food storage containers could go a long way in saving you in the long run as well.

15. Freeze Food Before it Goes Bad

Instead of getting mad at yourself at the end of the week for all the wilted produce you need to throw out, try freezing it before you get to that point.

Most frozen veggies will taste delicious in stir fries and soups. You can freeze fruits to make sorbet or smoothies. Frozen greens can be chopped up and tossed into just about anything for a nutrient boost!

16. Consider Ditching Most Supplements and Powders

I have nothing against superfood powders and supplements. However, if your budget is tight, it can be hard to fit supplements and powders in.

Instead of adding in powders, add extra nutrients to you food. Add lots of greens and veggies to all your meals to meet your nutrient needs. If you need a specific supplement, you can find great deals online as well!

17. Use Budget App

There are so many great apps you can download for free. One of my current favorite is HoneyDue because you can track your budget easily with your spouse. There are many options available, just find the one that you’re most likely to use. The ones that download your spendings automatically are often the easiest and will give you a more accurate number.

My husband and I use the same app, but have a separate budget for each of our weekly food plan and for our additional snacks. Keeping things separate can often be helpful to know exactly where your money is going. Plus, it can help hold you accountable if you have a significant other you are sharing money with.

18. Use What you Have

Most people have unused protein powders lying around in their cabinets. Instead of letting that go to waste, work them into your meal plan. Protein powders can make amazing doughnuts, pastries, or pancakes!

19. Enjoy the Process!

Finding ways to enjoy your new lifestyle will be helpful in sticking to it long term. Find fun in seeing how much you can save each month. Make a competition with someone to see who can stick to the lowest budget and create something fun to do for the winner with some of the money saved! Blast some music in the kitchen while cooking your new recipes.

Budgeting and health doesn’t have to be a drag. Make it fun and you’ll enjoy your new lifestyle long-term!

Featured photo credit: kevin laminto via unsplash.com

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