Financial Information

The Current Bankruptcy Situation

Sep 18, 2008 Bankruptcy

For borrowers suffering the many humiliations large and small of debts increasing beyond their control, there are actually several different forms of debt relief available to average consumers. What may surprise most Americans, actually, is the extent to which bankruptcy will no longer be considered among the debt relief alternatives that seasoned financial advisors recommend to most clients. Three years ago, while the economy was still relatively robust and the media was distracted by Iraq war coverage, the congress slipped in a few seemingly minor alterations to the United States bankruptcy code that went on to weaken tremendously the protection…

Source:The Current Bankruptcy Situation

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The Hidden Costs Of Filing Bankruptcy

Sep 18, 2008 Bankruptcy

Bankruptcy is a means to get out of debt. Some feel that it is a quick escape from mounding debt, and they make it their number one option. However, bankruptcy is no little thing and should be weighed carefully.

While the law has made it relatively easy to actually file papers, the process - like any legal proceeding - is far from painless. You will have to justify your filing, exposing all your financial history to a judge and opening it to objections by creditors. If you genuinely owe the money, they’re unlikely to settle happily for 10 cents (or less) on the dollar.

Even if you’re successful, there are multiple long-term impacts that you’ll want to consider carefully before taking such a drastic step.

You will no longer be eligible for any decent credit. That means that if you are able to receive a significant loan, for instance a home loan, you will be subject to extremely high interest rates which can lead you right back into financial ruin. Any credit cards that you were unable to pay will be lost, and other companies may decide that you are no longer a good risk and terminate your credit with them.

Bankruptcy does not always mean debt free. Some debts are exempt, such as back taxes within three years and student loans.

A bankruptcy stays on your credit for ten years, and it is very difficult to rebuild good credit afterward. Though your FICO scores are very important, nothing is looked upon more seriously and has a more negative effect on your credit than bankruptcy.

Beyond the credit impact, you may actually be required to forfeit real assets - a boat, expensive jewelry and other items - depending on when they were acquired. Most states make an exception for the primary residence and your auto. If you have secondary property, that may not be protected, however.

Finally, of course, the bankruptcy procedure itself is not free. Courts always have required fees and if you use an attorney that too will cost you. That can add the final straw to an already very bad financial situation.

There are some positives to bankruptcy as well. The debt collectors will stop calling once they receive word that you have filed bankruptcy. Also, you are protected from wage garnishment and from loosing your primary residence in foreclosure. If these things are eminent and you have run out of options, bankruptcy may give you a fresh start so that you can begin to rebuild your credit.

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Learning to Play by the New Bankruptcy Laws

Sep 10, 2008 Bankruptcy

Learning to Play by the New Bankruptcy Laws
By Jon Arnold

It used to be that bankruptcy was a relatively easy process to go through. Before the new bankruptcy law came into effect, you could file for bankruptcy relatively easily. If you had too many debts, it didn’t matter what your income was, for the most part. You could simply file for bankruptcy and have your debts wiped out so that you could start fresh, and people were doing this all the time, some even every year. However, that’s not true anymore.

New bankruptcy laws have made it much more difficult to both file for bankruptcy and to prove that you qualify for bankruptcy. In addition, if you do file for bankruptcy, you have to prove absolute financial hardship and lack of income to have the slate wiped clean. Even then, you don’t walk away scot-free, because you’ll usually lose any unprotected assets such as your house.

Instead, new bankruptcy laws have made it necessary for those in debt to take careful stock of their financial behavior and take responsibility for it. It’s still true that you can file for Chapter 7 bankruptcy (also known as “straight bankruptcy”), which allows you to completely walk away from your debts. However, you have to prove that you don’t have the income to pay back your debts no matter how you slice it, AND you’re going to lose unprotected assets such as your house in the process. This is because anything you owned that’s not protected is going to be liquidated and turned into cash to pay back creditors whatever can be paid back.

Most consumer bankruptcies filed these days fall under what’s called Chapter 13 bankruptcy. In this situation, you are called to account for your financial situation and debts, and will be required to pay them back through careful planning. If you fall into this situation, you have an income and have the ability to pay your debts back over time. You are held to account for your debts and are given a schedule by which you will pay them back to various creditors, usually over a period of several years. This is mandated by the court and you must do so. One advantage to Chapter 13 bankruptcy is that you usually get to keep such assets as your house; these would normally be liquidated in a Chapter 7 bankruptcy so that creditors could be paid back whatever monies could be squeezed out of your assets.

So you see, the new bankruptcy laws are much tougher on people than used to be true. In some cases, of course, this may not seem fair to those consumers who have gotten into debt through no fault of their own, such as because of expensive medical care. However, it can be a good thing for those consumers who have simply been financially irresponsible with credit card debt or other unnecessary debt and need to be called to account for their actions, and held responsible for them. Regardless of your feelings on the matter, though, the new bankruptcy laws are here and aren’t likely to change soon.

For more insights and additional information about the New Bankruptcy Law as well as getting a free bankruptcy evaluation from a qualified bankruptcy lawyer in your area, please visit our web site at http://www.bankruptcy-data.com/bankruptcy-law.php

Article Source: http://EzineArticles.com/?expert=Jon_Arnold
http://EzineArticles.com/?Learning-to-Play-by-the-New-Bankruptcy-Laws&id=1462497

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Debt Settlement Vs Bankruptcy - Which Path Should You Choose to Lead You Out of Debt?

Sep 10, 2008 Bankruptcy

Debt Settlement Vs Bankruptcy - Which Path Should You Choose to Lead You Out of Debt?
By Stephanie Hofstetler

Consumer debt is at an all time high with the difficulties in the economic aspect of the entire global community. Millions of Americans are struggling to win over the difficulties of high debts and unsettled credit and financial liabilities. A lot of men and women are in a dilemma between debt settlement vs bankruptcy. Nearly 1.6 million Americans in the year of 2003 gave up on their chances to address their financial inability through filing bankruptcy. They chose to jeopardize their credit reliability rather than settle their accounts for future needs.

You have to understand the difference between debt settlement vs. bankruptcy. Whether your financial state and dilemmas are a result of an illness, unemployment, divorce, or simply overspending, it is an overwhelming experience to settle what you owe. If your debt and financial problems have improved, try debt settlement before going the bankruptcy route.

Debt Settlement vs Bankruptcy - Choosing the Best Option Out Of Debt

Before you decide on things, you have to understand the reasons behind the decision making with regards to addressing your financial problems. One thing to consider is debt settlement. This can be one of the most effective ways of addressing the debts you have. It will facilitate the improvement of your financial status. It will eventually facilitate the urgent relief from harassment and stress of angry creditors. With debt settlement, you can usually settle your bills in a short period of time, usually 1-3 years.

Yes, you are right. Bankruptcy is another option to consider if you want relief from the ill effects of debt and discharge the debt itself once and for all. Bankruptcy is another alternative in settling down your bills but it is generally considered to be the last option to use after all negotiations have failed. A bankruptcy can affect you for at least 7-10 years. That is a long time to wait to get a good rate on an auto or home loan.

You will also being paying higher insurance premiums and you may even be denied several job offers due to bankruptcy. When you file bankruptcy, you are judged as not being responsible enough to pay your bills so prospective employers will not be willing to take a chance on an employee who is not deemed responsible.

Debt settlement is not without its pitfalls either. Your credit won’t come out of debt settlement spotless either. It will have blemishes on it that will need fixing. Most debt settlement companies offer credit repair services or they can refer you to a company who can help you rebuild your credit after you have paid off your debt.

So which option should you choose? Debt settlement is like the lesser of two evils but still make sure you do your research when selecting a debt settlement company.

Learn how to settle credit card debt and avoid bankruptcy and be debt free in 12-36 months. http://www.howtosettledebt.org/

Article Source: http://EzineArticles.com/?expert=Stephanie_Hofstetler
http://EzineArticles.com/?Debt-Settlement-Vs-Bankruptcy—Which-Path-Should-You-Choose-to-Lead-You-Out-of-Debt?&id=1467067

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Alternatives to Bankruptcy

Sep 10, 2008 Bankruptcy

Alternatives to Bankruptcy
By Matt Murren

If you cannot afford to pay all of your bills and are considering filing bankruptcy, be sure to consider all of the alternatives to bankruptcy before taking this step. Those who have no property and no income don’t need to file for bankruptcy, they can take no action as there is nothing for their lenders to take from them. This is one of the alternatives to bankruptcy that might be available to retired people or those who are unemployed. In seven years the debt will be removed from your credit record. You probably only want to take this option if you plan to have no income or substantial property for the next seven years.

Creditors will probably end up just writing off the debt to you if you have nothing for them to take. Another of the alternatives to bankruptcy is to try self money management, which means basically that you take a long hard look at where you are spending your money and cut back on some of your expenses that aren’t really necessary, like movie channels on cable, eating out, and magazine subscriptions. This can free up enough money to pay some of your bills, or at least give you enough so that it is easier to work out one of the other alternatives to bankruptcy. It is also possible to negotiate with creditors to try to either lower the payments or get part of your debt forgiven.

If creditors understand that you are looking into alternatives to bankruptcy and that their other option may be to lose out on the whole amount of the debt, they are more likely to agree to negotiate with you. If your creditors aren’t willing to negotiate with you or you aren’t comfortable negotiating with them yourself, you can get help from a nonprofit debt counseling agency, which can do the negotiating for you. However, some of these agencies are mainly funded through credit companies and therefore may have a conflict of interest. They may try to stick to agreements that leave you paying off the full amount of your debts when you might be able to get creditors to forgive some of the debt if you negotiate on your own.

Another of the alternatives to bankruptcy is debt consolidation. We have all heard the commercials for this on the radio and on tv. You take out a lower interest loan to pay back all of your high interest loans so that you only have one, lower interest loan to pay each month. There are debt consolidation companies that can help you with this, though be aware that some of them are not reputable so you want to be very careful when choosing a debt consolidation company. If you have decent credit you may be able to get a loan from your bank.

Matt D Murren owns and operates http://www.bankruptcy-options-advisor.com - Bankruptcy Options

Article Source: http://EzineArticles.com/?expert=Matt_Murren
http://EzineArticles.com/?Alternatives-to-Bankruptcy&id=1470120

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How Can I Avoid Bankruptcy?

Sep 10, 2008 Bankruptcy

How Can I Avoid Bankruptcy?
By Peter H Williams

I am not a debt councilor just a reasonable, fair minded and mature individual who has had more than his own share of financial problems.

No normal individual wants to declare themselves bankrupt but sometimes ‘clearing the decks’ does enable individuals to channel their efforts and thoughts back into positive ways rather than feel fear and spend time creating a defense of a situation that appears untenable.

Equally gaining advice and assistance may help you re-focus and actually see that there is a way to avoid declaring bankruptcy and avoid you becoming a bankrupt and having to take on board the consequences of bankruptcy for the next year or so.

Becoming bankrupt is the sort of event that can destroy marriages, impact or lose your job and generally just take you to the very end of your own ability to think straight. At a corporate level lots of people can get hurt.

What is Bankruptcy?

I am not legally trained but will give a simplistic view of the meaning of bankruptcy. Before you can take steps to avoid bankruptcy then you perhaps need to understand the circumstances under which it may occur. The term itself can applied to the individual and would be referred to as personal bankruptcy or to an organisation or company and maybe referred to as business or corporate bankruptcy. The laws or rules associated with any type of bankruptcy vary enormously in different countries of the world and across the states. This last statement is especially true in the U.S.

If a company or individual is unable to pay their current bills or costs then it has a cash flow problem. If for example the costs of running your home or business are $5,000 per month and the income for the same period is $4,000 then you are unable to pay all your creditors (that is the people to who you owe money). If you have a cash flow problem but have some type of asset then you are generally a far cry away from bankruptcy. You may for example have a debtor (someone that owes you money) that you are having trouble collecting from. Whatever the case you probably need help to restructure what you have such that you are able to generate either more cash for today or reduce the outgoing expenditure such that your income covers the rescheduled expenditure.

It all sounds simple doesn’t it, especially when it happens to someone else. Sometimes stating the obvious seems a little pointless but frequently when trouble surrounds an individual or company the so called obvious just can’t be seen and an outsider making the statement is exactly what is required. For example not all bills are the same even if they are due now. Bills for goods or services that you have used are obviously a little different than bills for goods or services that you anticipate using. In plain English it could be relevant to try and cancel commitments you may have made to future payments than to argue with suppliers who have already provided their goods or services. Another substantial cost maybe a mortgage which although due represents a part payment over several years and there maybe scope to reschedule.

If you have assets then again you maybe able to borrow against you asset or sell some or your entire asset to generate cash.

Whatever your status the odds are if you have thought about corporate or personal bankruptcy then you probably need some outside help. Just having another pair of eyes look at a problem can help. If you are to seek help then you would be required to list your income and expenditure and your debts and commitments. To do this take a piece of paper or spreadsheet and just start making a list of all your current expenditure and anticipated expenditure and then do the same for your income then go over it again. You maybe then can go over the figures and break down into smaller categories. Take your last few months bank statements and check that you have itemised everything in your statements.

Now you are in a position to get some proper help whether be about personal bankruptcy or a corporate matter. Do not allow yourself to be pushed or intimidated because if you’ve got this far you may well be over the worst.

Personal bankruptcy
or corporate bankruptcy create very difficult times for all and just having someone else take a look maybe just the help you need. The getfunded website provides further help, resources and links.

Article Source: http://EzineArticles.com/?expert=Peter_H_Williams
http://EzineArticles.com/?How-Can-I-Avoid-Bankruptcy?&id=1452728

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Chapter 7 Vs Chapter 13 Bankruptcy - The Insider Facts You Need to Know Before You Sign

Sep 10, 2008 Bankruptcy

Bankruptcy is a federal court process that can help consumers eliminate overwhelming debts or establish a plan to repay them. Depending on your income and circumstances, bankruptcy laws may give you a way to erase many financial obligations and start afresh.

Personal Bankruptcy Choices Chapter 7 And Chapter 13

For personal bankruptcy there are basically two ways to get bankruptcy protection, they are chapter 7 and chapter 13 filings.

Both chapters are a judicial process whereby someone declares that they are unable to pay their debt under Title 11 of the United States Code.

Bankruptcy is a process by which a debtor can obtain relief from his debts, through the courts. This relief may come in a variety of forms, including full or partial discharge of the debt, or the imposition of a payment program consistent with the debtor’s financial means.

Lets look at specifics.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy is known as “straight bankruptcy” and is the preferred option for people with little or no property and a lot of unsecured debt.

This is the most common type of bankruptcy proceeding filed and it is the “liquidation” bankruptcy where most debts are discharged without requiring the debtor to make any payments. The term “liquidation” refers to the process where a petition is filed with the bankruptcy court detailing the individual’s property, debts, and financial situation.

The trustee then takes your items of value ells them to repay your creditors a portion of your debt. If there is any debt left you will no longer be responsible for it.

For a person with little or no assets this is the quickest way to eliminate financial worries.

Chapter 13 Bankruptcy

Chapter 13 Bankruptcy is also known as a reorganization bankruptcy and it provides a better solution for those consumers who have a regular income, secured debts and do not which to loose their property.

Chapter 13 bankruptcy less common than Chapter 7 however it allows the consumer to submit a plan to the bankruptcy court to repay the debts that are secured. This plan us usually executed over a three to five year period of time.

It is important to note that Chapter 13 bankruptcy serves not to discharge you from your debts but rather to reorganize them and repay them within the three to five year period.

This means that this option is probably best for people with property and assets that they want to keep. Plus it means that they also have a predictable source of income allowing them to repay their debts and still maintain a standard of living.

Chapter 7 Vs Chapter 13 Bankruptcy Which Is The Best Choice For You

Bankruptcy can do wonders if you are in financial jeopardy, but filing is not a decision to be taken lightly. The fact is that Bankruptcy is a complex legal process, which means you should gain as much understanding as possible before you jump in. In fact did you know that Bankruptcy doesn’t work on some kinds of debts?

Fortunately there is a great free resource you can check out to get your Bankruptcy Questions answered. Click to http://www.bankruptcyreports.info a popular info site for those considering bankruptcy to relieve the stress of debt.

Article Source: http://EzineArticles.com/?expert=James_Lassider
http://EzineArticles.com/?Chapter-7-Vs-Chapter-13-Bankruptcy—The-Insider-Facts-You-Need-to-Know-Before-You-Sign&id=1471699

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