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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 November 8, 2018

How to Answer the Tough Question: What are Your Salary Requirements?

How to Answer the Tough Question: What are Your Salary Requirements?

After a few months of hard work and dozens of phone calls later, you finally land a job opportunity.

But then, you’re asked about your salary requirements and your mind goes blank. So, you offer a lower salary believing this will increase your odds at getting hired.

Unfortunately, this is the wrong approach.

Your salary requirements can make or break your odds at getting hired. But only if you’re not prepared.

Ask for a salary too high with no room for negotiation and your potential employer will not be able to afford you. Aim too low and employers will perceive as you offering low value. The trick is to aim as high as possible while keeping both parties feel happy.

Of course, you can’t command a high price without bringing value.

The good news is that learning how to be a high-value employee is possible. You have to work on the right tasks to grow in the right areas. Here are a few tactics to negotiate your salary requirements with confidence.

1. Hack time to accomplish more than most

Do you want to get paid well for your hard work? Of course you do. I hate to break it to you, but so do most people.

With so much competition, this won’t be an easy task to achieve. That’s why you need to become a pro at time management.

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Do you know how much free time you have? Not the free time during your lunch break or after you’ve finished working at your day job. Rather, the free time when you’re looking at your phone or watching your favorite TV show.

Data from 2017 shows that Americans spend roughly 3 hours watching TV. This is time poorly spent if you’re not happy with your current lifestyle. Instead, focus on working on your goals whenever you have free time.

For example, if your commute to/from work is 1 hour, listen to an educational Podcast. If your lunch break is 30 minutes, read for 10 to 15 minutes. And if you have a busy life with only 30–60 minutes to spare after work, use this time to work on your personal goals.

Create a morning routine that will set you up for success every day. Start waking up 1 to 2 hours earlier to have more time to work on your most important tasks. Use tools like ATracker to break down which activities you’re spending the most time in.

It won’t be easy to analyze your entire day, so set boundaries. For example, if you have 4 hours of free time each day, spend at least 2 of these hours working on important tasks.

2. Set your own boundaries

Having a successful career isn’t always about the money. According to Gallup, about 70% of employees aren’t satisfied with their current jobs.[1]

Earning more money isn’t a bad thing, but choosing a higher salary over the traits that are the most important to you is. For example, if you enjoy spending time with your family, reject job offers requiring a lot of travel.

Here are some important traits to consider:

  • Work and life balance – The last thing you’d want is a job that forces you to work 60+ hours each week. Unless this is the type of environment you’d want. Understand how your potential employer emphasizes work/life balance.
  • Self-development opportunities – Having the option to grow within your company is important. Once you learn how to do your tasks well, you’ll start becoming less engaged. Choose a company that encourages employee growth.
  • Company culture – The stereotypical cubicle job where one feels miserable doesn’t have to be your fate. Not all companies are equal in culture. Take, for example, Google, who invests heavily in keeping their employees happy.[2]

These are some of the most important traits to look for in a company, but there are others. Make it your mission to rank which traits are important to you. This way you’ll stop applying to the wrong companies and stay focused on what matters to you more.

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3. Continuously invest in yourself

Investing in yourself is the best investment you can make. Cliche I know, but true nonetheless.

You’ll grow as a person and gain confidence with the value you’ll be able to bring to others. Investing in yourself doesn’t have to be expensive. For example, you can read books to expand your knowledge in different fields.

Don’t get stuck into the habit of reading without a purpose. Instead, choose books that will help you expand in a field you’re looking to grow. At the same time, don’t limit yourself to reading books in one subject–create a healthy balance.

Podcasts are also a great medium to learn new subjects from experts in different fields. The best part is they’re free and you can consume them on your commute to/from work.

Paid education makes sense if you have little to no debt. If you decide to go back to school, be sure to apply for scholarships and grants to have the least amount of debt. Regardless of which route you take to make it a habit to grow every day.

It won’t be easy, but this will work to your advantage. Most people won’t spend most of their free time investing in themselves. This will allow you to grow faster than most, and stand out from your competition.

4. Document the value you bring

Resumes are a common way companies filter employees through the hiring process. Here’s the big secret: It’s not the only way you can showcase your skills.

To request for a higher salary than most, you have to do what most are unwilling to do. Since you’re already investing in yourself, make it a habit to showcase your skills online.

A great way to do this is to create your own website. Pick your first and last name as your domain name. If this domain is already taken, get creative and choose one that makes sense.

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Here are some ideas:

  • joesmith.com
  • joeasmith.com
  • joesmithprojects.com

Nowadays, building a website is easy. Once you have your website setup, begin producing content. For example, if you a developer you can post the applications you’re building.

During your interviews, you’ll have an online reference to showcase your accomplishments. You can use your accomplishments to justify your salary requirements. Since most people don’t do this, you’ll have a higher chance of employers accepting your offer

5. Hide your salary requirements

Avoid giving you salary requirements early in the interview process.

But if you get asked early, deflect this question in a non-defensive manner. Explain to the employer that you’d like to understand your role better first. They’ll most likely agree with you; but if they don’t, give them a range.

The truth is great employers are more concerned about your skills and the value you bring to the company. They understand that a great employee is an investment, able to earn them more than their salary.

Remember that a job interview isn’t only for the employer, it’s also for you. If the employer is more interested in your salary requirements, this may not be a good sign. Use this question to gauge if the company you’re interviewing is worth working for.

6. Do just enough research

Research average salary compensation in your industry, then wing it.

Use tools like Glassdoor to research the average salary compensation for your industry. Then leverage LinkedIn’s company data that’s provided with its Pro membership. You can view a company’s employee growth and the total number of job openings.

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Use this information to make informed decisions when deciding on your salary requirements. But don’t limit yourself to the average salary range. Companies will usually pay you more for the value you have.

Big companies will often pay more than smaller ones.[3] Whatever your desired salary amount is, always ask for a higher amount. Employers will often reject your initial offer. In fact, offer a salary range that’ll give you and your employer enough room to negotiate.

7. Get compensated by your value

Asking for the salary you deserve is an art. On one end, you have to constantly invest in yourself to offer massive value. But this isn’t enough. You also have to become a great negotiator.

Imagine requesting a high salary and because you bring a lot of value, employers are willing to pay you this. Wouldn’t this be amazing?

Most settle for average because they’re not confident with what they have to offer. Most don’t invest in themselves because they’re not dedicated enough. But not you.

You know you deserve to get paid well, and you’re willing to put in the work. Yet, you won’t sacrifice your most important values over a higher salary.

The bottom line

You’ve got what it takes to succeed in your career. Invest in yourself, learn how to negotiate, and do research. The next time you’re asked about your salary requirements, you won’t fumble.

You’ll showcase your skills with confidence and get the salary you deserve. What’s holding you back now?

Featured photo credit: LinkedIn Sales Navigator via unsplash.com

Reference

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