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New Research: Improve Your Finances by Avoiding Decision Fatigue

August 29, 2011 By

New research published recently in the New York Times provides a fascinating look at how our brains work when required to make important decisions. The findings could have serious implications for people trying to avoid debt, rebuild after bankruptcy, or stick to a budget.

What Is Decision Fatigue?

Decision fatigue is exactly what it sounds like: a phenomenon that occurs when a person has made too many choices. Intriguingly:

  • Each decision a person makes requires energy.
  • We all have limits to our mental energy, but we may not realize we’re approaching those limits.
  • As we make decisions throughout the day, our mental energy is depleted. It can be restored with rest and food.
  • Poor people are reportedly more susceptible to decision fatigue than rich people because those with less money generally have to put more energy into each purchasing decision they make. Having fewer resources means that every spending choice has higher stakes.
  • Decision fatigue can lead to impulse buying, overextending yourself on credit and otherwise making the sort of purchases you wouldn’t if you had your full mental reserves available.

We’re wired to deal with decision fatigue in two ways: by acting impulsively or by making no decision at all. Clearly, either of those options can have serious side effects, especially if debt is on the line.

How Can I Fight Decision Fatigue?

We have to make so many decisions each day, we may not realize we’re making them: what to wear, what to eat for breakfast, what to pack for lunch, which lane to drive in, where to park – and that’s before getting to work.

Researchers have found that there are some key ways to fight decision fatigue and maximize your effectiveness throughout the day:

  • Plan ahead: Set out your clothes, pack your lunch and decide on breakfast before bed. In the morning, you can breeze through without stressing about minor things.
  • Schedule major decisions: If you know you have to make important decisions (e.g. buy a car or lead a big meeting at work), plan ahead. Make sure to get enough rest beforehand and to approach the decision with a full stomach.
  • Space major decisions: While it may seem productive to schedule major decisions or projects close together, you’ll probably serve yourself better by giving your brain a break between them.
  • Have a snack on hand: One encouraging finding of the decision fatigue research was that there is a simple way to fight back: eat something. The rush of glucose to the blood and brain we get from eating can help rejuvenate our energy and make decisions a little less overwhelming.
Filed Under: Medical Bankruptcy, News Tagged With: , , , , , , , , , , ,

Surviving Bankruptcy: Qualifying for Credit and Loans

August 9, 2010 By Leave a Comment

By R. Lawrence Anderson -

When many people think about surviving bankruptcy, they are usually worried about whether or not they will be able to qualify for credit and loans in the future.

So how does one go about surviving bankruptcy? First, you need to put together a game plan – then focus on working that plan.

For example, let’s say that qualifying for credit and loans is one of your concerns when it comes to surviving bankruptcy – and by the way, it’s a valid concern.

So what would your “surviving bankruptcy” game plan look like when it comes to qualifying for credit and loans? Here are three steps you could follow:

Surviving Bankruptcy Step #1: Rebuild your credit

Rebuilding your credit as soon as possible is critical when it comes to surviving bankruptcy. Why? Because rebuilding your credit history can increase your credit score. This in turn can mean the difference between qualifying or being declined for a loan. Second, if you increase your credit score enough it could help you get a lower interest rate – as a result, you could end up saving $100s or even $1,000s in extra interest.

Surviving Bankruptcy Step #2: Know how the credit approval process works

This is another key part of your surviving bankruptcy game plan. You need to know what lenders look for when evaluating a credit application, and how to use that information to your advantage. I cover this in detail in After Bankruptcy Credit Solutions. Timing is also critical – a lot of people who have had a bankruptcy get this wrong when applying for a loan.

Surviving Bankruptcy Step #3: Know how to apply for credit

If you’ve followed steps 1 and 2, then you’re ready for step three. One key part in step 3 is knowing which lenders to apply with. If you don’t, you could end up being in for disappointing results – which can make surviving bankruptcy unnecessarily difficult. Also, once you do find the right lender you want to reduce your interest expenses – there are specific steps you can take that can save you up to $100s or even $1,000s of dollars. There is not enough room to cover them here, but I do go through them in After Bankruptcy Credit Solutions.

So now you know some steps you can take when it comes to surviving bankruptcy as far as credit and loans are concerned. Of course, much will depend on your personal financial situation, age of your bankruptcy, credit score, etc. But hopefully, you can use them as a starting point when it comes to credit and loans after bankruptcy.

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Copyright © 2006 Innovative Solutions Publishing, Inc. All rights reserved.

DISCLAIMER:

This information is designed to provide only a general overview of the subject matter herein.

This information is provided with the understanding that neither the publisher nor author is engaged in rendering legal, accounting or other professional advice. If legal or other expert assistance is required, the services of a professional should be sought.

Neither the publisher nor author shall be liable for any loss or damages, including but not limited to special, consequential, incidental or other damages, caused by the information contained herein.

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About the Author: R. Lawrence Anderson is author of After Bankruptcy Credit Solutions, which shows individuals how to qualify for credit and loans after bankruptcy – a valuable resource for anyone concerned about surviving bankruptcy when it comes to credit and loans.

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http://EzineArticles.com/?Surviving-Bankruptcy:-Qualifying-for-Credit-and-Loans&id=163945

Filed Under: Recovering from Bankruptcy Tagged With: , , , ,

How to Dispute False Credit Reports After Bankruptcy

July 12, 2009 By Leave a Comment

By Justin Baxter -

Bankruptcy is supposed to give consumers a fresh start. In a Chapter 7 bankruptcy, the Court may discharge some or all of a consumer’s debts. Consequently, the way creditors report the account to the credit reporting agencies must change as well.

When the Bankruptcy Court Judge issues his or her final order discharging a consumer’s debts, discharged accounts will have the notation “Included in Bankruptcy.” However, the account balance becomes zero, improving a consumer’s debt-to-income ratio. Also, the account should not show other derogatory remarks resulting from non-payment after the discharge order is entered. Deleting high balances and derogatory remarks can improve a consumer’s credit score.

If this type of information is showing on your credit report (also known as a consumer report), you can send a written dispute to the credit reporting agencies. If a creditor continues reporting amounts owing or that the account is past due, consumers may be able to bring a suit for damages under the Fair Credit Reporting Act. Below is a short description of the process for disputing false information on your credit report.

1. Get a copy of your consumer report. While it is possible to access your credit report online, some credit reporting companies require consumers to give up important rights in order to access their consumer report through their website. Also, it can be confusing navigating the many links to purchase services that you do not necessarily need. A better way is to request it by mail.

Consumers can request their free annual credit report by writing to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. The request form is available at the annualcreditreport.com website.

2. Send a written dispute letter to the credit reporting agencies. Tell them that you filed for bankruptcy, and give them the bankruptcy court case number. List the specific accounts and account numbers which were discharged.

Send your letter via certified mail, with a return receipt requested. Keep a copy of your signed, dated letter, along with copies of enclosures.

3. Review the response. If the credit bureaus request additional information, provide it to them. If you are unable to get the credit reports corrected, consider contacting a consumer protection attorney.

Justin M. Baxter

Baxter & Baxter, LLP

Portland, Oregon

(503) 297-9031 http://www.baxterlaw.com

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Filed Under: Credit Repair Tagged With: ,

What Will My Life Look Like After Bankruptcy?

June 12, 2009 By Leave a Comment

bicycleBy Carly Calkins -

There can be moments after any bankruptcy discharge when a person feels enormous relief.

Upon completion of your bankruptcy filing, creditor harassment, once a rampant feature in your life, will likely cease.

And, if you don’t have time to spend time avoiding creditors, then you can spend time focusing on getting your financial life back on track.

Nevertheless, post-bankruptcy situations can also be very alarming. A common rumor is that you won’t be able to get credit for ten years following your bankruptcy filing.

Of course, when you’ve just filed bankruptcy, your credit will probably not be strong.

This should come as no a surprise given your previous credit card debt, unpaid bills and threats of foreclosure.

Fortunately, however, this understanding allows for attention to be paid to other important concerns.
Here are some things that you can likely expect:

•    You may be bombarded with offers of low-balance credit cards to help you “rebuild” your credit. Unfortunately, many of these offers may be from unscrupulous creditors, and they may come laden with activation fees and membership fees that push you near your limit before you’ve ever used the card. At that point, late fees and over-the-limit fees will appear, and you’ll be looking at the same dilemma that may have forced you into bankruptcy originally. The solution? Be very careful when choosing your new credit accounts. There are some reputable lenders out there who will give you a legitimate chance to re-establish your credit. Be patient and deliberate in determining which offers are on par and which are just too good to be true.
•    Upon bankruptcy, you probably won’t immediately qualify for most conventional mortgages, car loans and other similar loans. Fortunately, for those who pay their bills on time following [http://www.totalbankruptcy.com/]bankruptcy, these loans will likely be available to you within two to three years following discharge. Anyone seeking a car loan knows this is no small amount of time, but it certainly beats the 10 year rumor.
•    And yes, you’ll probably pay a higher interest rate for the first few loans or credit accounts that you apply for. These rates are tied to your three-digit credit score and your scores will be low following bankruptcy. The good news is that the negative items on your credit history have less and less bite over time, as you add good credit on top of them. The more recent items will mean much more to your score, so keep those items as current as you can.

The bottom line is that your credit was probably in bad shape before bankruptcy, and it will not be immediately improved by the process.

But, without old debts weighing you down, you will have a chance to rebuild credit. If you are careful and responsible, you will likely emerge with credit stronger than when you filed, and with that, you will probably see more opportunities with lower interest rates and favorable terms.

Don’t forget that a bankruptcy attorney may be able to tell you even more about what your life after bankruptcy will look like.

Talk to a bankruptcy lawyer to find out more about the reasons for filing, the process itself and what your future may hold following your discharge.

Carly Calkins

writer from Chicago

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