August 2016

Debt Consolidation

Debt to Income Ratio: How to determine your DTI and why it is important.

Debt to income ratio (DTI) is infinitely important for handing your finances. Using the ratio is simple, all you need is your total monthly income and the total amount spent on bills (car payments, home mortgage, insurance payments, etc.) to calculate your DTI.

Here is an example of how to use the DTI:

  • Monthly income (before taxes): $3,000.
  • Total payments for the month: $1,000.

Divide the monthly income of $3000 by $1,000 for monthly expenses to get a percentage of 33%, since $1000 is 33% of $3000.

The debt to income ratio is important for a few different reasons. For one, you can determine if you will have enough money to make your payments each month and not put yourself in debt. A lower debt to income ratio allows you to easily pay bills and put money into savings or have extra money to spend. Make note that the debt to income ratio uses your gross monthly income to calculate the debt to income ratio, so realistically you will be receiving less money per month than the DTI accounts for.

The actual percentage has importance as well. If you want to qualify for a mortgage you will need a 41% or less, but a 36% DTI is considered the ideal amount to have. Studies conducted about mortgage loans suggest that those with a higher DTI are less likely to be able to make their monthly payments. While it is less likely to get a qualified mortgage with a higher debt to income ratio, you may still obtain one from a small creditor. They will still check your DTI, but are allowed to offer a qualified mortgage. Keep in mind that it is likely your lender is a small creditor.

Having a good debt to income ratio does not depend on the amount of money you make per month. Someone who has a low income can have an excellent DTI by practicing good spending habits and managing their finances well per month. On the other hand, someone who have a high income per month can have a bad DTI due to poor spending choices and having more bills, or higher cost bills, than they can afford.

A large lender may still offer a mortgage, even though it may not be a qualified mortgage. Large lenders will rely on good faith and CFBP (Consumer Financial Protection Bureau) rules to determine if you have the ability to pay off the loan. It is also important to keep in mind that different lenders have different standards for debt to income ratios. If one lender will not approve you, then contact other lenders to see if they will approve you with your DTI.

Note: If your DTI is 50% or more it is advised to seek help with your debt management right away. You can pay down your consumer debt or increase down payments to increase your debt to income ratio too.

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Debt Consolidation

Get Rid of Medical Debt with Bankruptcy

File bankruptcy to get rid of medical debts is the guarantee way of being debt free. A bankruptcy attorney can let you know if you are eligible for bankruptcy or know what debts to be able to eliminate.  A bankruptcy attorney can help you eliminate medical debt. File bankruptcy will stop all collections call and get rid of many debts such as wage garnishment.

Before filing bankruptcy it’s best to consult with a bankruptcy attorney. Most bankruptcy attorney will provide a free consultation. During the consultation, a bankruptcy attorney will let you know what steps to take and what debt can be eliminate. If you live in California, you can contact Consumer Action Law Group, for free bankruptcy advice. They only do one time evaluation, so it’s very important if you gather all information and layout all questions before speaking to bankruptcy attorney at Consumer Action Law Group.

Bankruptcy not only helps to get rid of debts, but it can save your property from foreclosure. Another fact that not many know is that bankruptcy can increase your credit score.

Medical Debt with Bankruptcy

What Debts Can Be Eliminating with Bankruptcy?

The most common forms of debts are the medical debts, credit card debts and property mortgage debts. All of these can have one clear answer, and that is the filing of a bankruptcy. The chapter 7 or 13 bankruptcy is a great wayto help you out, and especially the chapter 13 can stop a foreclosure immediately. However whether you may file a bankruptcy depending on the case and situation, and which type of bankruptcy you may file depending onyour income and assets etc, will only be determined by your Los Angeles bankruptcy attorney.

Benefit of Chapter 13 Bankruptcy – The Smartest Choice

With chapter 13 bankruptcy, the court immediate passes a declaration, which you may submit to the lender to make then immediately stop all collection calls, foreclosure steps and other collectionattempts. This isespeciallybeneficial when you are in a big medical debt, and can actually not pay it for along time due to poor financial situation.

Medical debts are a big problem, and it’s a reality that you don’t get them by logic, or reason or choice, but just because you are a victim of the situation. It’s always much painful, especially when you have collection calls and notices tapping your head every time. Hence, to avoid your property from being sold off, or your assets from being auctioned, you must contact a bankruptcy attorney Los Angeles on time.

Medical Debt with Bankruptcy1

A leading law firm in Los Angeles, Consumer Action law Group is specialize in bankruptcy and saving property from foreclosure. Whether you want to file chapter 7 or 13; or want to eliminate medical debt, credit card debt, or wage garnishment, their Los Angeles Bankruptcy Attorney can help you.

Remember, if you resident in the state of California, you are eligible for a free bankruptcy advice from a Los Angeles Bankruptcy attorney at Consumer Action Law Group. They can be reach at 818-254-8413 or visit


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