WEBMU 2011

WEBMU 2011 is getting some nice discussions happening. The current list of cities are... 

-Magdeburg
-Frankfurt
-Cologne
-Aachen
-Cologne
-Münster
-Somewhere in the Ruhrgebiet
-Nuremberg
-Düsseldorf
-Stuttgart
-a smaller town perhaps in the countryside
-someplace Ian can cycle to
-Anywhere
-Berlin

I am rooting for Cologne with the obvious bias, but it guess it will be the activities associated with the event that will make it a winner.

By the way, if you are a blogger and an expat living in Germany, feel free to drop by at WEBMU for a quick discussion, especially if you have a town or a city in mind.

Düsseldorf Rheinturm

Becoming bankrupt is easier than you think

The following is a guest post by Caramon Khan of PayPlan.

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Staying in control of your finances can seem like a nightmare at times. Controlling debt can be difficult at the best of times. With a static economy and rising prices many people ignore the problem and hope it will just go away. Beware though, do this and soon you could be facing the slide into bankruptcy. Avoiding bankruptcy and the stigma that goes with it can seem impossible. If you are at the situation where you no longer feel in control, take action. Putting together a debt management plan is a major and necessary part of that action

First of all admit there is a problem. Pretending that there are no problems in the face of mounting interest and charges is a perfect way to drop into bankruptcy without even realising it. Once you face up to your debt problems the issue of bankruptcy and the likelihood will become clear. Secondly, admit that you cannot keep control; there is no shame in that. If you do not, then the problem will just get worse. Too many people try to borrow their way out, thinking it is the answer. But, the debt will not magically go away. Last of all seek professional advice. Sit down with a debt professional and you will start benefiting straight away. If you feel confident enough, you can use a computer to make your own debt management plan. Although, if you have debt problems, then a professional will have more experience and authority when dealing with creditors.

What will a debt management company do and what is the benefit of a debt management plan? For a start you can get free initial advice and consultation. They will look objectively at your debt problems and see how dangerous they are. Next and most importantly your consultant will draw up a solid plan to manage your debt. This is vital, to allow him to approach your creditors and persuade them to join the plan. He will try to hold or freeze debts you have. Stopping interest and other charges is a massive step as it stops the 'snowball' effect on your debts.

A debt management plan will show the true extent of the debt problems. That clarity is quite sobering and a big wake up call. Seeing how close you might have been to bankruptcy shows how easy it is to lose control. But, it will also have your new month to month budgets so that you take control of your finances again. This will exactly lay out your new spend in detail. It will cut back on unnecessary items to allow a payment each month into your debts. The plan will usually aim to pay off your debts within three to five years.

Learning how to monitor and control debt, whether business or personnel is vital. Bankruptcy is not a fun experience as anyone who has gone through it will testify. A debt management plan is a sensible and practical way to relieve the burden and stabilise your life before it is too late.

Sold our house.

When we shifted to Germany, we had plans to service the mortgage by a combination of rental income and international money transfer from Germany. The house was rented essentially the day we flew out of Australia. This was a very good start. The exchange rate was about 0.65EUR to the aussie dollar. At that time, it was quite feasible for this arrangement to work quite well.

That was in the middle of 2009 when the GFC was in full swing. Fast forward to the end of 2011. The tenants have shifted out to buy their own house, and the exchange rate is at all time time for the aussie dollar at around 0.76EUR. This made is quite difficult for us to keep servicing the mortgage. When we fixed interest rate on our mortgage, we made a simple mistake. It was not the fixing of the interest rate as that was on the increase. It the length of time. We fixed it for four years and it was way too long.

The only that we could really do and be able to sustain some sense of normal life in Germany is to sell the house in Australia. Contribution to that decision are a couple of positives. 

Firstly, the housing market is still going strong in Melbourne so we will be getting a bit of profit. We have own the house for about four years, and over that four years, we have made about $30K. It is not spectacular, but it is welcomed.

Secondly, we avoid the hassle of managing the house from Germany. Even though we have an agent looking after the house in Australia, there are still a lot things that concern us. For example, we had to worry about how the marketing is going to get the new tenants, any damage to the house when the previous tenants shifted out etc.

When the house finally got sold, the deadly Queensland flood cause the settlement date to be delayed. The bank that the purchaser used were based in Brisbane and the floods caused the bank's system to be shutdown. I felt pretty bad that I had to impose a penalty on the purchaser as the delay was an "act of god", but I am sure that their bank will pay for the penalty at the end of the day.