Financial Literacy – Understanding Collateral Mortgages

The mortgage process is changing and many banks have are now using collateral mortgages when you purchase or refinance your home.  A collateral mortgage typically designed to secure all obligations that you owe to the bank and there is no dollar limit on the mortgage.

Am I Responsible For the Debt of My Business?

If your business is incorporated, you may still have personal obligations for certain debts; debt that you personally guaranteed, director liabilities, unpaid wages. If you operate your business as a sole proprietor, you are personally responsible for all the debts of that business. If you are a partner in a partnership, you and your business partner are jointly liable for all the debts of the partnership, not just your own portion.

Will My Personal Bankruptcy Affect My Spouse?

When you file a personal bankruptcy it does not directly affect your spouse or reflect on their credit report.  Your personal bankruptcy is between you and your creditors.  Your spouse is not liable for your debts simply because he/she is your spouse.  However, your personal bankruptcy can have an impact on the other person in certain ways.

Good Debt vs. Bad Debt

Good debt is for purchases that appreciate in value or significantly improve your quality of life.  Bad debts on the other hand typically do not provide you with any long-term benefit.  If you carry a heavy amount of bad debt and are only able to make minimum payments then it’s time to look for help.

What to Know Before Co-signing A Loan?

When you sign for a student loan, line of credit or any type of loan for another person you are legally responsible if that person fails to meet the terms of that credit agreement.  If the other person misses payments the creditor will expect you to make the payments and demand that you pay the debt in full.