SURAT: A plea for bankruptcy protection, filed by leading US diamond and jewellery seller M Fabrikant & Sons Inc, is sending shivers down the spine of the diamond manufacturing industry in Surat, as the company reportedly owes large amount of money to diamond units in the city.
Fabrikant-Leer International, a subsidiary of M Fabrikant, also filed a petition for relief under Chapter 11 of the US Bankruptcy Code last Friday.
Though the industry is tight-lipped about the development, sources said many diamond firms in the city are likely to suffer losses. According to them, the total debt of Fabrikant, which has a joint venture in the US with Mumbai-based Tara Jewels, would be around $363 million, of which it owes around $36 million (Rs 165 crore) to creditors. Of this Rs 165 crore, around 80-90%, amounting to about Rs 130-150 crore, are due to units in Surat.
Gem & Jewellery Export Promotion Council (GJEPC) chairman Sanjay Kothari, however, says Fabrikant’s total debt to Indian diamond merchants would be $25 million or around Rs 115 crore.
“Many diamond firms in Surat have close business links with Fabrikant, which is a major buyer of polished diamonds. The outstanding dues of these manufacturers will be in peril because of the bankruptcy-protection petition,” a leading diamond manufacturer told DNA Money.
However, sources pointed out that even if Fabrikant goes bankrupt, the creditors would be paid around 30% of their dues, so the economic losses would not be too huge. But there would definitely be loss of business.
“The bankruptcy petition will have an adverse effect on Surat’s diamond manufacturing industry as demand for polished goods will be hit. With Christmas round the corner, the development could not have come at a worse time,” said Dinesh Navadia, a local manufacturer.
Fabrikant is learnt to have run into financial troubles due to huge write-offs and reduced sales from the bankruptcy of two of its big retail customers and a reduction in Wal-Mart purchases. Secondly, its lenders imposed tougher borrowing rules following a poor financial performance in 2005.
http://www.dnaindia.com/report.asp?NewsID=1065761
Thursday, May 31, 2007
Enron v/s Iridium: similarities and contrasts
Remember Iridium LLC, the global satellite phone company that went up in smoke? Until the Enron flameout, Iridium was probably the most high-profile bankruptcy in the United States in recent times.
Iridium was Motorola’s dream experiment, which envisaged 66 artificial satellites girdling the globe and connecting up with terrestrial systems to zap calls to user telephones anywhere on earth. I remember Iridium’s slick talking communications official making the rounds of Indian newspapers and displaying natty little cellphone-like instruments which he said would be Iridium’s answer to the suitcase-sized Inmarsat phones that were the only satellite-linked alternative then.
In India, a consortium led by IDBI but steered by Deepak Parekh and Ravi Parthasarathy (then chairman and vice-chairman respectively of Infrastructure Leasing and Financial Services) was put together to invest $70 million in Iridium LLC and a further Rs 126.09 crore for the gateway at Pune. It now turns out that the Indian institutions were victims of a well-orchestrated fraud—at least that is what they allege in a criminal complaint filed before the Pune magistrate a few months ago. Or is it that they are so overawed by the high-octane sales pitch of US companies that they turn credulous and commit themselves to totally one-sided contracts? We will know soon enough.
The Indian consortium had a five per cent stake and a seat on the board of directors of Iridium LLC and would set up the gateway. In fact, there was much huffing and puffing about the bureaucratic delay in granting permission for the gateway, which, Iridium had otherwise threatened to reallocate to China. As it happens, the Iridium phone, when it was finally launched, was nowhere near the dream that was sold to the world. Instead of a snazzy handset there was an embarrassing shoebox-sized phone, which had no chance of becoming the business executive’s favourite gizmo; instead it was sold as a communication tool for oil exploration rigs, archeological expeditions and military outfits stationed at remote locations.
Even that market was difficult to tap, because the phones and the calls made with it were far too expensive. Hence, it was no surprise that Iridium filed for bankruptcy in 1999, or, that India’s largest overseas investment had gone bust.
Now that Indian institutions have filed for criminal fraud, several interesting facts have spilled out, and they provide an interesting comparison between India’s experience with Motorola’s Iridium and Enron’s Dabhol Power Company. For starters, Dabhol was touted as the ‘largest foreign direct investment in India’ while Iridium was India’s largest investment overseas. Both Iridium LLC and Enron filed for bankruptcy, but for entirely different reasons.
Like Enron, Iridium’s parent Motorola is among America’s most respected companies. Both Iridium and Dabhol had large and disastrous investments by Indian financial institutions and in both cases, the US companies wrote themselves gold plated deals and one-sided contracts. Enron’s sweetheart deal involved a change in India’s electricity policy, and eliminated all its business risk through multiple payment guarantees. It also got itself several lucrative contracts such as the fuel supply deal and the operations & maintenance (O&M) contract giving it a separate income stream.
Its two US partners—GE Capital and Bechtel—got themselves equipment supply deals and Maharashtra was left tied to an unviable project, largely funded by Indian institutions who have even guaranteed the loans by US banks and institutions.
Look at the similarity between this and the allegations made by Indian institutions against Iridium. They say that Motorola promoted Iridium LLC, only to use the project for ‘developing new technology at other people’s cost’. Also, while a global consortium of countries invested in the equity and gateway projects, Motorola allegedly raked in the moolah. It pocketed a hefty $6.5 billion as payments from Iridium LLC.
As against its equity investment of a mere $315 million, it earned $3.68 billion in equipment supply contracts etc at ‘artificially high prices’. Like in the Dabhol case, it cornered the O&M contract, the terrestrial network development contract and the space system contract at Iridium LLC.
This ensured that Motorola began to recover its money right at the beginning irrespective of whether or not the Iridium experiment worked. Further, its contracts with Iridium were not only ‘exorbitant’, but were structured in such a way that although ‘Iridium paid all the development costs, the most valuable assets of the system would still be owned by Motorola’.
Moreover, Motorola had protected itself by quietly using various debt and equity raising exercises to discharge third party guarantees that it had provided to Iridium LLC, in order to attract global investment. If this sounds astounding today, it is a pity that the Indian investors never realised what was going on during their umpteen trips abroad to tie up the deal. The institutions say that they later discovered that ‘the Iridium system was a complete failure and all the material representations made… were totally false, dishonest, fraudulent and deceitful’ and to the knowledge of Motorola officials.
In fact, the Motorola board had rejected a proposal to fund the development of Iridium on its own in the early 1990s. Far from processing fax and data, the constellation of satellites could not even generate signals that could be picked up inside buildings or in automobiles. Further, the gateway costing Rs 126 crore was a completely unnecessary and a waste (since the system itself did not work). Motorola allegedly knew that ‘the Iridium system could be operated through a single gateway and that other gateways were not absolutely necessary’. It only created the ‘subterfuge’ of the need for gateways in order to obtain licenses to operate Iridium in countries such as India.
Indian investors allege, that Motorola had become aware that Iridium was a disaster well before the commercial launch, but it suppressed this fact and ‘concealed the shortcomings’ to ‘induce’ investors to keep pumping money into the system even faster. The question is what next? When Indian investors demanded $250 million to make good the losses, Motorola slapped a counter demand on them of $6.9 million.
Undoubtedly Motorola will fight aggressively to protect itself. However, this led to the filing of a criminal complaint at Pune where again Motorola ignored the summons served on itself and its top brass. It now remains to be seen what role the Indian government will play in helping Indian institutions (the list includes IDBI, ICICI, HDFC, UTI, SBI, LIC, GIC, Exim Bank of India and IL&FS) recover their money.
If vice-president Dick Cheney and various US Ambassadors could aggressively push the Enron deal, can India do the same? Will the Indian government and its politicians stand up for its institutions without any strings attached? The next few months will demonstrate how good we are at protecting our national interest.
http://www.suchetadalal.com/articles/display/80/161.article
Iridium was Motorola’s dream experiment, which envisaged 66 artificial satellites girdling the globe and connecting up with terrestrial systems to zap calls to user telephones anywhere on earth. I remember Iridium’s slick talking communications official making the rounds of Indian newspapers and displaying natty little cellphone-like instruments which he said would be Iridium’s answer to the suitcase-sized Inmarsat phones that were the only satellite-linked alternative then.
In India, a consortium led by IDBI but steered by Deepak Parekh and Ravi Parthasarathy (then chairman and vice-chairman respectively of Infrastructure Leasing and Financial Services) was put together to invest $70 million in Iridium LLC and a further Rs 126.09 crore for the gateway at Pune. It now turns out that the Indian institutions were victims of a well-orchestrated fraud—at least that is what they allege in a criminal complaint filed before the Pune magistrate a few months ago. Or is it that they are so overawed by the high-octane sales pitch of US companies that they turn credulous and commit themselves to totally one-sided contracts? We will know soon enough.
The Indian consortium had a five per cent stake and a seat on the board of directors of Iridium LLC and would set up the gateway. In fact, there was much huffing and puffing about the bureaucratic delay in granting permission for the gateway, which, Iridium had otherwise threatened to reallocate to China. As it happens, the Iridium phone, when it was finally launched, was nowhere near the dream that was sold to the world. Instead of a snazzy handset there was an embarrassing shoebox-sized phone, which had no chance of becoming the business executive’s favourite gizmo; instead it was sold as a communication tool for oil exploration rigs, archeological expeditions and military outfits stationed at remote locations.
Even that market was difficult to tap, because the phones and the calls made with it were far too expensive. Hence, it was no surprise that Iridium filed for bankruptcy in 1999, or, that India’s largest overseas investment had gone bust.
Now that Indian institutions have filed for criminal fraud, several interesting facts have spilled out, and they provide an interesting comparison between India’s experience with Motorola’s Iridium and Enron’s Dabhol Power Company. For starters, Dabhol was touted as the ‘largest foreign direct investment in India’ while Iridium was India’s largest investment overseas. Both Iridium LLC and Enron filed for bankruptcy, but for entirely different reasons.
Like Enron, Iridium’s parent Motorola is among America’s most respected companies. Both Iridium and Dabhol had large and disastrous investments by Indian financial institutions and in both cases, the US companies wrote themselves gold plated deals and one-sided contracts. Enron’s sweetheart deal involved a change in India’s electricity policy, and eliminated all its business risk through multiple payment guarantees. It also got itself several lucrative contracts such as the fuel supply deal and the operations & maintenance (O&M) contract giving it a separate income stream.
Its two US partners—GE Capital and Bechtel—got themselves equipment supply deals and Maharashtra was left tied to an unviable project, largely funded by Indian institutions who have even guaranteed the loans by US banks and institutions.
Look at the similarity between this and the allegations made by Indian institutions against Iridium. They say that Motorola promoted Iridium LLC, only to use the project for ‘developing new technology at other people’s cost’. Also, while a global consortium of countries invested in the equity and gateway projects, Motorola allegedly raked in the moolah. It pocketed a hefty $6.5 billion as payments from Iridium LLC.
As against its equity investment of a mere $315 million, it earned $3.68 billion in equipment supply contracts etc at ‘artificially high prices’. Like in the Dabhol case, it cornered the O&M contract, the terrestrial network development contract and the space system contract at Iridium LLC.
This ensured that Motorola began to recover its money right at the beginning irrespective of whether or not the Iridium experiment worked. Further, its contracts with Iridium were not only ‘exorbitant’, but were structured in such a way that although ‘Iridium paid all the development costs, the most valuable assets of the system would still be owned by Motorola’.
Moreover, Motorola had protected itself by quietly using various debt and equity raising exercises to discharge third party guarantees that it had provided to Iridium LLC, in order to attract global investment. If this sounds astounding today, it is a pity that the Indian investors never realised what was going on during their umpteen trips abroad to tie up the deal. The institutions say that they later discovered that ‘the Iridium system was a complete failure and all the material representations made… were totally false, dishonest, fraudulent and deceitful’ and to the knowledge of Motorola officials.
In fact, the Motorola board had rejected a proposal to fund the development of Iridium on its own in the early 1990s. Far from processing fax and data, the constellation of satellites could not even generate signals that could be picked up inside buildings or in automobiles. Further, the gateway costing Rs 126 crore was a completely unnecessary and a waste (since the system itself did not work). Motorola allegedly knew that ‘the Iridium system could be operated through a single gateway and that other gateways were not absolutely necessary’. It only created the ‘subterfuge’ of the need for gateways in order to obtain licenses to operate Iridium in countries such as India.
Indian investors allege, that Motorola had become aware that Iridium was a disaster well before the commercial launch, but it suppressed this fact and ‘concealed the shortcomings’ to ‘induce’ investors to keep pumping money into the system even faster. The question is what next? When Indian investors demanded $250 million to make good the losses, Motorola slapped a counter demand on them of $6.9 million.
Undoubtedly Motorola will fight aggressively to protect itself. However, this led to the filing of a criminal complaint at Pune where again Motorola ignored the summons served on itself and its top brass. It now remains to be seen what role the Indian government will play in helping Indian institutions (the list includes IDBI, ICICI, HDFC, UTI, SBI, LIC, GIC, Exim Bank of India and IL&FS) recover their money.
If vice-president Dick Cheney and various US Ambassadors could aggressively push the Enron deal, can India do the same? Will the Indian government and its politicians stand up for its institutions without any strings attached? The next few months will demonstrate how good we are at protecting our national interest.
http://www.suchetadalal.com/articles/display/80/161.article
India does not need dynasticism
There is no law in the world which says that a politician should not let his wife, son or grandson take over from where he left. Hillary Clinton wants to be President, following the two-term career of her husband Bill. History is full of instances where politics has been a family tradition, whether in the United Kingdom or the United States, two of the best known democracies.
True, great names like Churchill, Disraeli or Gladstone in England or Lincoln in the United States did not have family members to succeed them in the Prime Ministerial or presidential gadi.
The Pitts in England may have been an exception. In the US there have been two Roosevelts, Theodore and Franklin, but they were not so closely related. There have been two other such instances in US history and in recent times we have had two George Bushes, father and son as Presidents, but one has never heard of a dynastic succession such as we have seen in India since 1947. Had Robert Kennedy not been assassinated he might - just might - have become President of the US like his elder brother John F. Their younger brother, Edward, has been a Senator, but his political ambitions stopped there.
By and large, some of our great leaders of the past have kept their sons and daughters away from politics. Of the Mahatma's sons, only Devadas Gandhi was - but only distantly - in political life as editor of Hindustan Times. None of the successors of, say, Dr Rajendra Prasad, C Rajagopalachari, Dr Radhakrishnan, Dr Ambedkar, the Bose brothers or B G Kher in Maharashtra followed in their elders' footsteps.
It is claimed that things are changing and mention is made of the progeny of Deve Gowda, Karunanidhi, Chautala, Mulayam Singh Yadav and Vasundhara Raje, not to mention Sheikh Abdullah. Gopala Krishna Gandhi, grandson of the Mahatma, is Governor of West Bengal, who would probably make as good a Prime Minister as any, but he has shown no indication of getting into pro-active politics. That by itself is no big deal; but it is only when a descendant of a well-known family makes extraordinary claims about his forebears that one feels sick in the stomach and wants to throw up.
Rahul Gandhi is not a child, though he has been behaving like one. The remarks attributed to him not only indicate a total sense of immaturity, but what is worse, an arrogance that is unacceptable. Nobody would question either the patriotic fervour or sense of dedication of the Nehrus, starting with Motilal. Had his son Jawaharlal not received his education in England, but had merely graduated from an Indian University, he would probably never had much to fall back upon, considering that as a lawyer, he was a failure. But those were colonial days and an England-returned had a glamour about him that fascinated even the Mahatma who took Jawaharlal under his wings, in part because of pressure from Nehru Senior.
It is open to question whether Vallabhai Patel would have been a better Prime Minister. Certainly, only Vallabhai could have brought the Indian Princes to heel, including the Nizam of Hyderabad. After Asoka, credit for uniting one India should go only to him. His son Dahyabhai could at most aspire to membership of Parliament, but poor Dahyabhai has long been forgotten. This is not to belittle Nehru's immense contribution to the freedom struggle or the many years of imprisonment he underwent for which the nation cannot be sufficiently grateful to him.
There were times when he was even in financial difficulties and Gandhi had to ask him whether he would like to become the Allahabad correspondent of the then prevailing nationalist paper, The Bombay Chronicle, to sustain himself. Gandhi was willing to seek the support of the paper's distinguished editor, Syed Abdullah Brelvi. And that is on record. Through his leanings to the Left, as was then the fashion, Jawaharlal's efforts to impose a Socialistic Pattern of Society on India proved disastrous and his taking the Kashmir issue to the Security Council turned to be a monumental error for which the country is still paying. True, there is so much he has done that is not only praiseworthy but calls for the country's adulation which, in any way, he received in substantial measure. Even the Non-Aligned Movement of which he was a founding father along with others like Nasser, Tito and Sukarno evokes admiration.
But one has to judge a man all in all and not merely on his plus and negative points. The same needs to be said of Indira Gandhi, She often played her cards well but the concessions she made to Zulfikar Ali Bhutto at the Simla Talks, following the end of the Bangladesh War showed poor understanding of real politic. Bhutto was an unprincipled India-hater and at Simla India could have resolved the Kashmir issue once and for all. But she made a colossal error in trying to be gracious and magnanimous.
One can lay the blame on her principal adviser, P N Naksar, but there is no denying the fact that she let go Bhutto cheaply and let down India badly.
We can forget the Emergency. It merely was indicative of the poor advice she received not only from her brash son Sanjay, but from sycophantic advisers, for which she paid dearly. She played the communal card just as carelessly and ruthlessly in Punjab with what results is everybody's knowledge. She may have wished to partition Pakistan - who, in India, wouldn't have, given the circumstances? - but to say that it was the Nehru-Gandhi genius that was responsible for it not only shows as abysmal ignorance of events but a total lack of tact.
Only someone suffering from a massive dose of self-delusion would have made the kind of remarks unbecoming of a Nehru descendant. This country can do without such adolescent behaviour. If this be the kind of leadership that Congress wants to sponsor, God save us. The tragedy is that the Congress is bereft of any vision.
It is therefore falling back on dynasticism. All its much-hyped ideas and concepts have failed - and that, too, miserably. Socialistic pattern of society, garibi hatao have become standard jokes. What garibi did Indira Gandhi hatao? It was not the Gandhi family which liberated Indian economy from fancy concept but it was Narasimha Rao, with the support of Dr Manmohan Singh, who did it after Rajiv Gandhi took India to the edge of financial bankruptcy.
Rajiv Gandhi's unplanned foray against the LTTE was responsible for huge losses in the Indian Army which was forced to beat a precipitate retreat somewhat shamefacedly. And what Congress leaders did following the assassination of Mrs Gandhi needs no reiteration. The earth indeed shook with the wholesale killings of innocent Sikh men, women and children. It is sad to see Dr Manmohan Singh certifying to Rahul Gandhi's leadership qualities - such as they are. But if Rahul needs further education on his family's great deeds, he may wish to read two volumes written by B N Tandon entitled PMO Diary I and II. It may help the young man to come down to earth. India has plenty of men and women of quality and character for the Congress to fall back on. It does not have to depend on the Nehru dynasty to lead the country to more disasters.
The bane of Indian society today is dynasticism and casteism. Haven't we gone beyond feudal concepts of Maharajahs where a ruler is succeeded by his son and so on till eternity come?
http://www.newstodaynet.com/guest/3004gu1.htm
True, great names like Churchill, Disraeli or Gladstone in England or Lincoln in the United States did not have family members to succeed them in the Prime Ministerial or presidential gadi.
The Pitts in England may have been an exception. In the US there have been two Roosevelts, Theodore and Franklin, but they were not so closely related. There have been two other such instances in US history and in recent times we have had two George Bushes, father and son as Presidents, but one has never heard of a dynastic succession such as we have seen in India since 1947. Had Robert Kennedy not been assassinated he might - just might - have become President of the US like his elder brother John F. Their younger brother, Edward, has been a Senator, but his political ambitions stopped there.
By and large, some of our great leaders of the past have kept their sons and daughters away from politics. Of the Mahatma's sons, only Devadas Gandhi was - but only distantly - in political life as editor of Hindustan Times. None of the successors of, say, Dr Rajendra Prasad, C Rajagopalachari, Dr Radhakrishnan, Dr Ambedkar, the Bose brothers or B G Kher in Maharashtra followed in their elders' footsteps.
It is claimed that things are changing and mention is made of the progeny of Deve Gowda, Karunanidhi, Chautala, Mulayam Singh Yadav and Vasundhara Raje, not to mention Sheikh Abdullah. Gopala Krishna Gandhi, grandson of the Mahatma, is Governor of West Bengal, who would probably make as good a Prime Minister as any, but he has shown no indication of getting into pro-active politics. That by itself is no big deal; but it is only when a descendant of a well-known family makes extraordinary claims about his forebears that one feels sick in the stomach and wants to throw up.
Rahul Gandhi is not a child, though he has been behaving like one. The remarks attributed to him not only indicate a total sense of immaturity, but what is worse, an arrogance that is unacceptable. Nobody would question either the patriotic fervour or sense of dedication of the Nehrus, starting with Motilal. Had his son Jawaharlal not received his education in England, but had merely graduated from an Indian University, he would probably never had much to fall back upon, considering that as a lawyer, he was a failure. But those were colonial days and an England-returned had a glamour about him that fascinated even the Mahatma who took Jawaharlal under his wings, in part because of pressure from Nehru Senior.
It is open to question whether Vallabhai Patel would have been a better Prime Minister. Certainly, only Vallabhai could have brought the Indian Princes to heel, including the Nizam of Hyderabad. After Asoka, credit for uniting one India should go only to him. His son Dahyabhai could at most aspire to membership of Parliament, but poor Dahyabhai has long been forgotten. This is not to belittle Nehru's immense contribution to the freedom struggle or the many years of imprisonment he underwent for which the nation cannot be sufficiently grateful to him.
There were times when he was even in financial difficulties and Gandhi had to ask him whether he would like to become the Allahabad correspondent of the then prevailing nationalist paper, The Bombay Chronicle, to sustain himself. Gandhi was willing to seek the support of the paper's distinguished editor, Syed Abdullah Brelvi. And that is on record. Through his leanings to the Left, as was then the fashion, Jawaharlal's efforts to impose a Socialistic Pattern of Society on India proved disastrous and his taking the Kashmir issue to the Security Council turned to be a monumental error for which the country is still paying. True, there is so much he has done that is not only praiseworthy but calls for the country's adulation which, in any way, he received in substantial measure. Even the Non-Aligned Movement of which he was a founding father along with others like Nasser, Tito and Sukarno evokes admiration.
But one has to judge a man all in all and not merely on his plus and negative points. The same needs to be said of Indira Gandhi, She often played her cards well but the concessions she made to Zulfikar Ali Bhutto at the Simla Talks, following the end of the Bangladesh War showed poor understanding of real politic. Bhutto was an unprincipled India-hater and at Simla India could have resolved the Kashmir issue once and for all. But she made a colossal error in trying to be gracious and magnanimous.
One can lay the blame on her principal adviser, P N Naksar, but there is no denying the fact that she let go Bhutto cheaply and let down India badly.
We can forget the Emergency. It merely was indicative of the poor advice she received not only from her brash son Sanjay, but from sycophantic advisers, for which she paid dearly. She played the communal card just as carelessly and ruthlessly in Punjab with what results is everybody's knowledge. She may have wished to partition Pakistan - who, in India, wouldn't have, given the circumstances? - but to say that it was the Nehru-Gandhi genius that was responsible for it not only shows as abysmal ignorance of events but a total lack of tact.
Only someone suffering from a massive dose of self-delusion would have made the kind of remarks unbecoming of a Nehru descendant. This country can do without such adolescent behaviour. If this be the kind of leadership that Congress wants to sponsor, God save us. The tragedy is that the Congress is bereft of any vision.
It is therefore falling back on dynasticism. All its much-hyped ideas and concepts have failed - and that, too, miserably. Socialistic pattern of society, garibi hatao have become standard jokes. What garibi did Indira Gandhi hatao? It was not the Gandhi family which liberated Indian economy from fancy concept but it was Narasimha Rao, with the support of Dr Manmohan Singh, who did it after Rajiv Gandhi took India to the edge of financial bankruptcy.
Rajiv Gandhi's unplanned foray against the LTTE was responsible for huge losses in the Indian Army which was forced to beat a precipitate retreat somewhat shamefacedly. And what Congress leaders did following the assassination of Mrs Gandhi needs no reiteration. The earth indeed shook with the wholesale killings of innocent Sikh men, women and children. It is sad to see Dr Manmohan Singh certifying to Rahul Gandhi's leadership qualities - such as they are. But if Rahul needs further education on his family's great deeds, he may wish to read two volumes written by B N Tandon entitled PMO Diary I and II. It may help the young man to come down to earth. India has plenty of men and women of quality and character for the Congress to fall back on. It does not have to depend on the Nehru dynasty to lead the country to more disasters.
The bane of Indian society today is dynasticism and casteism. Haven't we gone beyond feudal concepts of Maharajahs where a ruler is succeeded by his son and so on till eternity come?
http://www.newstodaynet.com/guest/3004gu1.htm
Wednesday, May 30, 2007
Simple Check to Test Your Eligibility for Filling Chapter 7 Bankruptcy
Most people who file for bankruptcy choose Chapter 7 instead of Chapter 13 because it's fast, effective, easy to file, and doesn't require payments over time. But are you eligible to file under chapter 7, check it out here.
Most people who file for bankruptcy choose Chapter 7 instead of Chapter 13 because it's fast, effective, easy to file, and doesn't require payments over time. Chapter 7 bankruptcy usually takes the least time to complete. The process is over in about 4 to 6 months, commonly requiring only one trip to the courthouse by the person filing for bankruptcy to emerge debt-free.
However not every persons who are seeking of getting debt free by filling bankruptcy will be eligible to file under chapter 7. If you remaining income after subtracting what you will spend on certain allowed expenses and monthly payments for child support, tax debts, secured debts such as a mortgage or car loan, and a few other types of debts is sufficient to support the payment under chapter 13 repayment plan, then, you will not allow to file bankruptcy under chapter 7.
Check Your Eligibility Criteria
The first step to check your eligibility of filling chapter 7 bankruptcy is to measure your average income for past six months against the median income for a family of your size in your state.
Once you have calculated your income, compare it to the median income for your state (You can find the median income by state information from www .usdoj.gov/ust; click the Mean Testing Information). If your calculated average income is less than or equal to the median income of your state, you can file under chapter 7 bankruptcy, else you need to go through another eligibility test, called "Mean Test".
The "Mean Test" based on the outcome from calculated disposable income. To get your disposable income, calculate your average monthly income as describe in above paragraph. From that amount, you subtract both of the following:
* Certain allowed expenses such as clothing, transportation, food and so on; in amounts set by the IRS (Note that this amount may be lower than your actual spending).
* Monthly payments you will have to make on secured and priority debts. Secured debts such as mortgage and/or car loan; priority debts include child support, alimony, tax debts, and wages owed to employees.
If your total monthly disposable income after subtracting these amounts is less than $100, you pass the means test, and will be allowed to file for Chapter 7. If your total disposable income is more than $166.66 then your will automatically force to Chapter 13 unless your have a solid reason with proven facts that you are facing a special circumstances that aren't reflected in the calculations above. You may be allowed to file under chapter 7, but this is a case by case basic.
What if you disposable income fall in between $100 and $166.66? If your disposable income is in this range, you must figure out whether what you have left over is enough to pay more than 25% of your unsecured, non priority debts such as credit cards, student loans and medical bills. If not, you pass the means test, and Chapter 7 remains an option else you have flunked the means test, and will be prohibited from using Chapter 7.
Summary
You may like most of people prefer to fill the bankruptcy (if this is the option left for debt free) under chapter 7, because it doesn't require you to repay any portion of your debts, as Chapter 13 does. But first thing is your must be eligible and meet the requirement for chapter 7 to opt for this option.
About Author
Cornie Herring is the Author from "StudyKiosk-Credit Basics"- http://www.studykiosk.com/creditbasics . "StudyKiosk-Credit Basics" is an informational website on credit basics, debt consolidation and bankruptcy.
Most people who file for bankruptcy choose Chapter 7 instead of Chapter 13 because it's fast, effective, easy to file, and doesn't require payments over time. Chapter 7 bankruptcy usually takes the least time to complete. The process is over in about 4 to 6 months, commonly requiring only one trip to the courthouse by the person filing for bankruptcy to emerge debt-free.
However not every persons who are seeking of getting debt free by filling bankruptcy will be eligible to file under chapter 7. If you remaining income after subtracting what you will spend on certain allowed expenses and monthly payments for child support, tax debts, secured debts such as a mortgage or car loan, and a few other types of debts is sufficient to support the payment under chapter 13 repayment plan, then, you will not allow to file bankruptcy under chapter 7.
Check Your Eligibility Criteria
The first step to check your eligibility of filling chapter 7 bankruptcy is to measure your average income for past six months against the median income for a family of your size in your state.
Once you have calculated your income, compare it to the median income for your state (You can find the median income by state information from www .usdoj.gov/ust; click the Mean Testing Information). If your calculated average income is less than or equal to the median income of your state, you can file under chapter 7 bankruptcy, else you need to go through another eligibility test, called "Mean Test".
The "Mean Test" based on the outcome from calculated disposable income. To get your disposable income, calculate your average monthly income as describe in above paragraph. From that amount, you subtract both of the following:
* Certain allowed expenses such as clothing, transportation, food and so on; in amounts set by the IRS (Note that this amount may be lower than your actual spending).
* Monthly payments you will have to make on secured and priority debts. Secured debts such as mortgage and/or car loan; priority debts include child support, alimony, tax debts, and wages owed to employees.
If your total monthly disposable income after subtracting these amounts is less than $100, you pass the means test, and will be allowed to file for Chapter 7. If your total disposable income is more than $166.66 then your will automatically force to Chapter 13 unless your have a solid reason with proven facts that you are facing a special circumstances that aren't reflected in the calculations above. You may be allowed to file under chapter 7, but this is a case by case basic.
What if you disposable income fall in between $100 and $166.66? If your disposable income is in this range, you must figure out whether what you have left over is enough to pay more than 25% of your unsecured, non priority debts such as credit cards, student loans and medical bills. If not, you pass the means test, and Chapter 7 remains an option else you have flunked the means test, and will be prohibited from using Chapter 7.
Summary
You may like most of people prefer to fill the bankruptcy (if this is the option left for debt free) under chapter 7, because it doesn't require you to repay any portion of your debts, as Chapter 13 does. But first thing is your must be eligible and meet the requirement for chapter 7 to opt for this option.
About Author
Cornie Herring is the Author from "StudyKiosk-Credit Basics"- http://www.studykiosk.com/creditbasics . "StudyKiosk-Credit Basics" is an informational website on credit basics, debt consolidation and bankruptcy.
6 Steps to Take Before Bankruptcy
If you currently have unbearable debts and thinking of wipe it off from your statement by declaring bankruptcy; Just on-hold your decision for a while, there may be other options available. Read this article to get more information on how to improve your situation
If you currently have unbearable debts and thinking of wipe it off from your statement by declaring bankruptcy; Just on-hold your decision for a while, there may be other options available. Try to improve your situation before you investigate the bankruptcy option. No matter which way you go, evaluate the 5 steps below to see if you could avoid taking that drastic step.
1. Detail out all your debts
First, look at all your secured debts such as mortgage and car loan. How much are the repayment for each month? What are the interest rates?
Then, list down all the fixed expenses such as power, phone, insurance, food, etc. What are the total costs for these expenses?
Follow by examining your credit card debts. Take out all your credit card statement and write down the amount you owe for each card and their interest rate.
Finally, write down all your other expandable; these are your optional expenses such as entertainment, gym, membership, dinners at restaurant and other impulsive purchase.
2. Eliminate the unnecessary expenses
Now you should have a better idea on where your money goes; Make a diet plan on your cash; In your Cash Diet Plan, list down all the your savings from the elimination of the optional expenses. You will be surprise that how much money you can save by carefully control your expenses. The money you saved can be used to pay down your debts.
3. Get your family involve and work as a team
Don't do it alone because under such as stress condition, you may out of control and may not think and plan in clear mind; get your family together and let them know your financial problem and have them to work together to control the household spending and eliminate the unnecessary expenses.
4. Cash out with your assets
If you have equity, you are in a better situation because you could refinance or get a secured loan for pay off your debts. If you are looking for bankruptcy as your debt relief options, your may not have any equity in hand already. But equity is not the only asset; many people tend to forget that things that have cash value, but not sentimental value. Think antiques, old clothes or collectibles.
List down all the assets you own which your can sell and cash out. Check the closets, garage and storage locker, she says, "and find out what you can live without". Then, cash them out through garage sales, eBay or consignment shops. Use the money to pay down your debts as much as possible.
5. Go for consumer counseling service
Arrange an appointment with a credit counseling agency and let the counselor to understand your finance situation and draft a budget for you. Review the debt management plan proposed to you before your sign to enroll into the plan. You may get a few plans from other credit counseling agencies for comparison. Choose the one which best suit your current financial needs. Although a debt-management plan can have a negative impact on your credit, it's better than bankruptcy.
6. Get A second or part time job
Utilize your out-of-work time on second or part time job. Although you may not earn much in your part time job, a little money coming in can keep a bad financial situation from getting worse.
Summary
Bankruptcy may be your easy way out from debts but the consequences may follow you for 7 to 10 years. Always look for other alternative before choose for this dramatic options.
About Author
Cornie Herring is the Author from "StudyKiosk-Credit Basics"- http://www.studykiosk.com/creditbasics . "StudyKiosk-Credit Basics" is an informational website on credit basics, debt consolidation and bankruptcy.
If you currently have unbearable debts and thinking of wipe it off from your statement by declaring bankruptcy; Just on-hold your decision for a while, there may be other options available. Try to improve your situation before you investigate the bankruptcy option. No matter which way you go, evaluate the 5 steps below to see if you could avoid taking that drastic step.
1. Detail out all your debts
First, look at all your secured debts such as mortgage and car loan. How much are the repayment for each month? What are the interest rates?
Then, list down all the fixed expenses such as power, phone, insurance, food, etc. What are the total costs for these expenses?
Follow by examining your credit card debts. Take out all your credit card statement and write down the amount you owe for each card and their interest rate.
Finally, write down all your other expandable; these are your optional expenses such as entertainment, gym, membership, dinners at restaurant and other impulsive purchase.
2. Eliminate the unnecessary expenses
Now you should have a better idea on where your money goes; Make a diet plan on your cash; In your Cash Diet Plan, list down all the your savings from the elimination of the optional expenses. You will be surprise that how much money you can save by carefully control your expenses. The money you saved can be used to pay down your debts.
3. Get your family involve and work as a team
Don't do it alone because under such as stress condition, you may out of control and may not think and plan in clear mind; get your family together and let them know your financial problem and have them to work together to control the household spending and eliminate the unnecessary expenses.
4. Cash out with your assets
If you have equity, you are in a better situation because you could refinance or get a secured loan for pay off your debts. If you are looking for bankruptcy as your debt relief options, your may not have any equity in hand already. But equity is not the only asset; many people tend to forget that things that have cash value, but not sentimental value. Think antiques, old clothes or collectibles.
List down all the assets you own which your can sell and cash out. Check the closets, garage and storage locker, she says, "and find out what you can live without". Then, cash them out through garage sales, eBay or consignment shops. Use the money to pay down your debts as much as possible.
5. Go for consumer counseling service
Arrange an appointment with a credit counseling agency and let the counselor to understand your finance situation and draft a budget for you. Review the debt management plan proposed to you before your sign to enroll into the plan. You may get a few plans from other credit counseling agencies for comparison. Choose the one which best suit your current financial needs. Although a debt-management plan can have a negative impact on your credit, it's better than bankruptcy.
6. Get A second or part time job
Utilize your out-of-work time on second or part time job. Although you may not earn much in your part time job, a little money coming in can keep a bad financial situation from getting worse.
Summary
Bankruptcy may be your easy way out from debts but the consequences may follow you for 7 to 10 years. Always look for other alternative before choose for this dramatic options.
About Author
Cornie Herring is the Author from "StudyKiosk-Credit Basics"- http://www.studykiosk.com/creditbasics . "StudyKiosk-Credit Basics" is an informational website on credit basics, debt consolidation and bankruptcy.
Tuesday, May 29, 2007
Plano Bankruptcy Attorney
Plano Bankruptcy Attorney
Are you receiving phone calls from creditors everyday? Are you tired of screening every call because you are scared to answer the phone? Well I have a solution. The Bankruptcy Attorneys of Plano are here to help. Not only will these attorneys sit you down and explain every detail in full, but they are willing to take that load of debt of your back and help you become debt free today! Whether it is a Chapter 7 or Chapter 13 bankruptcy case, a Plano Bankruptcy Attorney is ready to help!
You may ask yourself, “Why do I need a Bankruptcy Attorney”? Well the answer is because bankruptcy is a difficult process and with a Plano Bankruptcy Attorney you are more likely to succeed and expunge your debt more efficiently. Let us help you keep your belongings and stop the foreclosure on your home.
So what are you waiting for? Come in today for a free consultation! Let us help you become debt free by using bankruptcy and stop those harassing phone calls.
For more information please visit:
Fort Worth Bankruptcy Lawyer
Dallas Bankruptcy Attorney
Texas Bankruptcy
Bankruptcy Basics
Please fill out our free evaluation form to determine if bankruptcy is right for you.
* free bankruptcy evaluation by a lawyer
http://www.bankruptcyhome.com/bankruptcyblog/2006/07/31/plano-bankruptcy-attorney-2/
Are you receiving phone calls from creditors everyday? Are you tired of screening every call because you are scared to answer the phone? Well I have a solution. The Bankruptcy Attorneys of Plano are here to help. Not only will these attorneys sit you down and explain every detail in full, but they are willing to take that load of debt of your back and help you become debt free today! Whether it is a Chapter 7 or Chapter 13 bankruptcy case, a Plano Bankruptcy Attorney is ready to help!
You may ask yourself, “Why do I need a Bankruptcy Attorney”? Well the answer is because bankruptcy is a difficult process and with a Plano Bankruptcy Attorney you are more likely to succeed and expunge your debt more efficiently. Let us help you keep your belongings and stop the foreclosure on your home.
So what are you waiting for? Come in today for a free consultation! Let us help you become debt free by using bankruptcy and stop those harassing phone calls.
For more information please visit:
Fort Worth Bankruptcy Lawyer
Dallas Bankruptcy Attorney
Texas Bankruptcy
Bankruptcy Basics
Please fill out our free evaluation form to determine if bankruptcy is right for you.
* free bankruptcy evaluation by a lawyer
http://www.bankruptcyhome.com/bankruptcyblog/2006/07/31/plano-bankruptcy-attorney-2/
Wyoming Bankruptcy Law
Wyoming Bankruptcy Law
From the rolling plains to the beautiful Yellowstone National Park, Wyoming is one of the most beautiful states in the United States. Even though with all the beautiful scenery, the issue of debt is always nearby. Aren’t you tired of creditors calling non-stop all day long? Do you wish there was a way to get rid of them? Well there is! By filing for bankruptcy, you will fall under the protection of bankruptcy law and you will no longer be able to be harassed by those annoying creditors.
Effective since 2005, the United States requires every person who files for Bankruptcy to take an online course and meet with a credit counselor. The reason this law was implemented was to help people who have financial trouble find out where their problems started and think of ways they can help prevent debt from accumulating in the future.
By setting up an appointment with a Wyoming Bankruptcy Attorney you will be able to fully understand the laws and options of bankruptcy. Bankruptcy is a very difficult process to go through alone! So call us today and let us take the load of your back and help you regain your financial freedom today!
For more information please visit:
Idaho Bankruptcy
Chapter 7 Bankruptcy
Chapter 13 Bankruptcy
Please fill out our free evaluation form to determine if bankruptcy is right for you.
http://www.bankruptcyhome.com/bankruptcyblog/2006/07/31/wyoming-bankruptcy-law/
From the rolling plains to the beautiful Yellowstone National Park, Wyoming is one of the most beautiful states in the United States. Even though with all the beautiful scenery, the issue of debt is always nearby. Aren’t you tired of creditors calling non-stop all day long? Do you wish there was a way to get rid of them? Well there is! By filing for bankruptcy, you will fall under the protection of bankruptcy law and you will no longer be able to be harassed by those annoying creditors.
Effective since 2005, the United States requires every person who files for Bankruptcy to take an online course and meet with a credit counselor. The reason this law was implemented was to help people who have financial trouble find out where their problems started and think of ways they can help prevent debt from accumulating in the future.
By setting up an appointment with a Wyoming Bankruptcy Attorney you will be able to fully understand the laws and options of bankruptcy. Bankruptcy is a very difficult process to go through alone! So call us today and let us take the load of your back and help you regain your financial freedom today!
For more information please visit:
Idaho Bankruptcy
Chapter 7 Bankruptcy
Chapter 13 Bankruptcy
Please fill out our free evaluation form to determine if bankruptcy is right for you.
http://www.bankruptcyhome.com/bankruptcyblog/2006/07/31/wyoming-bankruptcy-law/
Bankruptcy In Rockport
Bankruptcy In Rockport
Rockport, a quaint little town on the Texas shoreline, has some of the prettiest views of the Gulf Coast. Even though there are many beautiful spots, the ugliness of debt is always in view. Although this view of debt may be hidden to the human eye, it weighs on the minds of every individual.
But you are in luck! The Bankruptcy Attorneys of Rockport are ready and willing to serve your case. Whether it is a Chapter 7 or Chapter 13 case, the experienced Bankruptcy Attorneys of Rockport are ready to solve your case with ease and efficiency. By consulting with a Rockport Bankruptcy Attorney, you will leave the meeting with the knowledge and understanding that will help you brush the stress of debt right off your back and stop those sleeplessness nights. Are you tired of collectors annoying you everyday? Well come in today and let us put a stop to those calls and allow you the chance to take the steps towards financial freedom!
So what are you waiting for? Call today and let us help you become debt free!
For more information please visit:
Texas Bankruptcy
Choosing an Attorney
Corpus Christi Bankruptcy Attorney
Please fill out our free evaluation form to determine if bankruptcy is right for you.
http://www.bankruptcyhome.com/bankruptcyblog/2006/07/28/bankruptcy-in-rockport/
Rockport, a quaint little town on the Texas shoreline, has some of the prettiest views of the Gulf Coast. Even though there are many beautiful spots, the ugliness of debt is always in view. Although this view of debt may be hidden to the human eye, it weighs on the minds of every individual.
But you are in luck! The Bankruptcy Attorneys of Rockport are ready and willing to serve your case. Whether it is a Chapter 7 or Chapter 13 case, the experienced Bankruptcy Attorneys of Rockport are ready to solve your case with ease and efficiency. By consulting with a Rockport Bankruptcy Attorney, you will leave the meeting with the knowledge and understanding that will help you brush the stress of debt right off your back and stop those sleeplessness nights. Are you tired of collectors annoying you everyday? Well come in today and let us put a stop to those calls and allow you the chance to take the steps towards financial freedom!
So what are you waiting for? Call today and let us help you become debt free!
For more information please visit:
Texas Bankruptcy
Choosing an Attorney
Corpus Christi Bankruptcy Attorney
Please fill out our free evaluation form to determine if bankruptcy is right for you.
http://www.bankruptcyhome.com/bankruptcyblog/2006/07/28/bankruptcy-in-rockport/
Monday, May 28, 2007
How to Cancel PMI
Keith has a lot of company. Most mortgages offered with less than a 20% down payment will require PMI (private mortgage insurance). So a lot of people pay for PMI.
PMI protects the lender if you default on the loan. It does not protect the borrower. It's fairly expensive insurance and is calculated based on how big your mortgage is. Your lender can tell you exactly how much you pay for PMI.
Back in the 90's some lenders were taking advantage of PMI. They would continue to charge the borrower for PMI long after they had reached the level of equity necessary to drop it.
Back in 1998 the Homebuyers Protection Act (HPA) was passed. It required lenders to notify homeowners when they had 20% equity in their home and terminate PMI when equity reached 22%.
Note that HPA does not require the lender to drop PMI if home appreciation causes home equity to go above the required levels. Only if payments cause it to reach that level. But most lenders will drop PMI if the equity in the home reaches the threshold level.
We won't get into all the different calculations as to whether you still need PMI. There are plenty of info available on that. We'll focus on getting PMI terminated when the time is right.
Let's start by going directly to the law. In section 3, the act pretty clearly defines how a borrower can cancel.
(a) BORROWER CANCELLATION.
A requirement for private mortgage insurance in connection with a residential mortgage transaction shall be canceled on the cancellation date, if the mortgagor
(1) submits a request in writing to the servicer that cancellation be initiated;
(2) has a good payment history with respect to the residential mortgage; and
(3) has satisfied any requirement of the holder of the mortgage (as of the date of a request under paragraph (1) for
(A) evidence (of a type established in advance and made known to the mortgagor by the servicer promptly upon receipt of a request under paragraph (1) that the value of the property securing the mortgage has not declined below the original value of the property; and
(B) certification that the equity of the mortgagor in the residence securing the mortgage is unencumbered by a subordinate lien.
According to the HPA the lender must drop PMI within 30 days of the automatic termination date or cancellation. When PMI is cancelled the lender is required to send notification that there is no PMI coverage and no further premiums are due.
Now that we know the law, let's see if we can't create a step-by-step procedure for canceling PMI.
The first step is to contact your mortgage company and ask some questions. Call them and have them send you the requested info. You'll want to know three things. First, what is the equity threshold required to cancel PMI. Usually 20 to 25% depending on who holds the mortgage.
Secondly, you'll want to know if an appraisal is required. And, if so, are there approved appraisers that you must use. Expect to pay approximately $400 for the appraisal.
Finally, find out where to send your cancellation letter. It may be the same address where you send your monthly payment. But, you want to be certain. So ask.
Once you know that you can go to work. Get the appraisal done. Assuming that it shows that you are over the threshold for canceling PMI, write a letter to your lender questing cancellation. It doesn't need to be fancy. The letter should include the current value of your home, the amount of your loan, and a sentence saying that you want to terminate PMI. Include a copy of the appraisal with the letter.
Some might consider it overkill, but sending the letter via certified mail or overnight service is a good idea. That way you have positive proof of it's receipt.
Yes, Keith has been jerked around. But, an appraisal plus a letter (or forms) should put an end to the monthly PMI. And, using the money freed up to reduce his principal is a great idea!
http://www.debtsmart.com/pages/article_cancel_pmi_070502725.html
PMI protects the lender if you default on the loan. It does not protect the borrower. It's fairly expensive insurance and is calculated based on how big your mortgage is. Your lender can tell you exactly how much you pay for PMI.
Back in the 90's some lenders were taking advantage of PMI. They would continue to charge the borrower for PMI long after they had reached the level of equity necessary to drop it.
Back in 1998 the Homebuyers Protection Act (HPA) was passed. It required lenders to notify homeowners when they had 20% equity in their home and terminate PMI when equity reached 22%.
Note that HPA does not require the lender to drop PMI if home appreciation causes home equity to go above the required levels. Only if payments cause it to reach that level. But most lenders will drop PMI if the equity in the home reaches the threshold level.
We won't get into all the different calculations as to whether you still need PMI. There are plenty of info available on that. We'll focus on getting PMI terminated when the time is right.
Let's start by going directly to the law. In section 3, the act pretty clearly defines how a borrower can cancel.
(a) BORROWER CANCELLATION.
A requirement for private mortgage insurance in connection with a residential mortgage transaction shall be canceled on the cancellation date, if the mortgagor
(1) submits a request in writing to the servicer that cancellation be initiated;
(2) has a good payment history with respect to the residential mortgage; and
(3) has satisfied any requirement of the holder of the mortgage (as of the date of a request under paragraph (1) for
(A) evidence (of a type established in advance and made known to the mortgagor by the servicer promptly upon receipt of a request under paragraph (1) that the value of the property securing the mortgage has not declined below the original value of the property; and
(B) certification that the equity of the mortgagor in the residence securing the mortgage is unencumbered by a subordinate lien.
According to the HPA the lender must drop PMI within 30 days of the automatic termination date or cancellation. When PMI is cancelled the lender is required to send notification that there is no PMI coverage and no further premiums are due.
Now that we know the law, let's see if we can't create a step-by-step procedure for canceling PMI.
The first step is to contact your mortgage company and ask some questions. Call them and have them send you the requested info. You'll want to know three things. First, what is the equity threshold required to cancel PMI. Usually 20 to 25% depending on who holds the mortgage.
Secondly, you'll want to know if an appraisal is required. And, if so, are there approved appraisers that you must use. Expect to pay approximately $400 for the appraisal.
Finally, find out where to send your cancellation letter. It may be the same address where you send your monthly payment. But, you want to be certain. So ask.
Once you know that you can go to work. Get the appraisal done. Assuming that it shows that you are over the threshold for canceling PMI, write a letter to your lender questing cancellation. It doesn't need to be fancy. The letter should include the current value of your home, the amount of your loan, and a sentence saying that you want to terminate PMI. Include a copy of the appraisal with the letter.
Some might consider it overkill, but sending the letter via certified mail or overnight service is a good idea. That way you have positive proof of it's receipt.
Yes, Keith has been jerked around. But, an appraisal plus a letter (or forms) should put an end to the monthly PMI. And, using the money freed up to reduce his principal is a great idea!
http://www.debtsmart.com/pages/article_cancel_pmi_070502725.html
Credit Card Fee Increases
It's estimated that Americans charged $1.8 trillion in 2005 on the 690 million credit cards outstanding. According to a Government Accountability Office study released in September, 2006, 13% of credit card users were assessed over-limit fees and 35% were assessed late fees in 2005. So Gwen has a lot of company.
Let's try to do three things. First, understand what these fees are. Next, see how fees are changing. And, finally, what Gwen can do to keep from being hurt.
Credit cards have always had fees. Some, like for a late payment, are understandable. Others came along as credit cards took on new capabilities. Think cash advance and balance transfer fees. Still others, like over-limit fees, seem like they shouldn't be possible. You would think that they wouldn't allow you to borrow more than your limit.
There are also 'penalty interest rates'. If you're late with a payment or go over your credit limit, you could see your rate bumped to 30% or more.
The 2006 GAO study looked at fees and penalties. It said that not only were fees increasing, but the credit card companies were doing a lousy job of informing consumers about those fees.
The credit card companies are obligated to tell you about any fees or penalties and how they're triggered. Some fees, like paying your credit card bill by phone, are sometimes not clearly disclosed. What Gwen received with her statement was a notice of a change in how fees would be charged. And, as long as she's notified they can get by with almost anything.
Late fees have nearly tripled in the last 11 years. And many cards have adopted a 'universal default clause' that says a late payment on any card will trigger the penalty interest rate.
Credit card companies say that the higher interest rates and fees are appropriate based on risk factors. If it weren't for the higher fees, they claim that they wouldn't be able to offer credit to riskier consumers.
In fairness, the GAO's survey found that (at least among 6 of the largest card issuers) 80% of accounts paid interest rates of less than 20%. So the vast majority of card users are not paying penalty rates.
But the study also found that the disclosures were written well above the eighth grade reading level and (surprise!) featured small print. They recommended that the Federal Reserve Board revise rules on credit card disclosures.
Now that we understand what's going on we can try to help Gwen avoid problems. The first thing is to recognize that the card issuers get to make most of the rules. And, whether those rules are fair or not isn't relevant. The best she can do is to avoid getting hurt by those rules.
Get familiar with each account. The only way to know exactly what's allowed is to read and understand the "Card Member Agreement." Tough duty. But necessary.
Watch out for unexpected fees--like for balance transfers or increasing your credit limit. Know what could trigger fees or penalty rates.
Know exactly when your payment is due. Keep a list of due dates for your credit card accounts. If you don't get the bill, it's your responsibility to contact the company and still make a timely payment.
If possible, the best thing to do is to join nearly half of the cardholders who paid little or no interest. That's because they do not carry a balance.
Obviously, for many people that's not immediately possible. Then it's important to send in your payment as soon as possible. Being seven days early is better than being one day late.
If you find it difficult to get your payment in on time, you might want to authorize the credit card company to automatically debit your checking account for the minimum payment each month. You'll probably pay for the service, but that way the payment can't be late.
Talk to your card issuer. If your due date falls at a bad time of the month, they'll move it.
If Gwen is near or over the limit on any card, she should try to shift part of the debt to a different card. Some fees are even being assessed when an account is merely getting too close to the limit. Your best bet is to keep balances to less than half the available credit.
Although the higher late fees are infuriating, they do minimal damage. The real problem is in the universal default clause. Most credit card accounts now have a universal default clause.
Suppose your rate went from 15% to 30% on every open credit account. For every $1,000 you owe, an extra $150 interest would be charged each year. So if you're the type of person carrying a $10,000 balance, that one late payment could cost you $1,500 per year. For as long as you have the balance!
Gwen is right to pay close attention to her credit card accounts. With newer fees and penalty rates in place, it becomes more important to manage your credit. In fact, it's critical to your financial wellbeing.
http://www.debtsmart.com/pages/article_card_fee_increases_061129695.html
Let's try to do three things. First, understand what these fees are. Next, see how fees are changing. And, finally, what Gwen can do to keep from being hurt.
Credit cards have always had fees. Some, like for a late payment, are understandable. Others came along as credit cards took on new capabilities. Think cash advance and balance transfer fees. Still others, like over-limit fees, seem like they shouldn't be possible. You would think that they wouldn't allow you to borrow more than your limit.
There are also 'penalty interest rates'. If you're late with a payment or go over your credit limit, you could see your rate bumped to 30% or more.
The 2006 GAO study looked at fees and penalties. It said that not only were fees increasing, but the credit card companies were doing a lousy job of informing consumers about those fees.
The credit card companies are obligated to tell you about any fees or penalties and how they're triggered. Some fees, like paying your credit card bill by phone, are sometimes not clearly disclosed. What Gwen received with her statement was a notice of a change in how fees would be charged. And, as long as she's notified they can get by with almost anything.
Late fees have nearly tripled in the last 11 years. And many cards have adopted a 'universal default clause' that says a late payment on any card will trigger the penalty interest rate.
Credit card companies say that the higher interest rates and fees are appropriate based on risk factors. If it weren't for the higher fees, they claim that they wouldn't be able to offer credit to riskier consumers.
In fairness, the GAO's survey found that (at least among 6 of the largest card issuers) 80% of accounts paid interest rates of less than 20%. So the vast majority of card users are not paying penalty rates.
But the study also found that the disclosures were written well above the eighth grade reading level and (surprise!) featured small print. They recommended that the Federal Reserve Board revise rules on credit card disclosures.
Now that we understand what's going on we can try to help Gwen avoid problems. The first thing is to recognize that the card issuers get to make most of the rules. And, whether those rules are fair or not isn't relevant. The best she can do is to avoid getting hurt by those rules.
Get familiar with each account. The only way to know exactly what's allowed is to read and understand the "Card Member Agreement." Tough duty. But necessary.
Watch out for unexpected fees--like for balance transfers or increasing your credit limit. Know what could trigger fees or penalty rates.
Know exactly when your payment is due. Keep a list of due dates for your credit card accounts. If you don't get the bill, it's your responsibility to contact the company and still make a timely payment.
If possible, the best thing to do is to join nearly half of the cardholders who paid little or no interest. That's because they do not carry a balance.
Obviously, for many people that's not immediately possible. Then it's important to send in your payment as soon as possible. Being seven days early is better than being one day late.
If you find it difficult to get your payment in on time, you might want to authorize the credit card company to automatically debit your checking account for the minimum payment each month. You'll probably pay for the service, but that way the payment can't be late.
Talk to your card issuer. If your due date falls at a bad time of the month, they'll move it.
If Gwen is near or over the limit on any card, she should try to shift part of the debt to a different card. Some fees are even being assessed when an account is merely getting too close to the limit. Your best bet is to keep balances to less than half the available credit.
Although the higher late fees are infuriating, they do minimal damage. The real problem is in the universal default clause. Most credit card accounts now have a universal default clause.
Suppose your rate went from 15% to 30% on every open credit account. For every $1,000 you owe, an extra $150 interest would be charged each year. So if you're the type of person carrying a $10,000 balance, that one late payment could cost you $1,500 per year. For as long as you have the balance!
Gwen is right to pay close attention to her credit card accounts. With newer fees and penalty rates in place, it becomes more important to manage your credit. In fact, it's critical to your financial wellbeing.
http://www.debtsmart.com/pages/article_card_fee_increases_061129695.html
Lost Opportunities
Sometimes it's helpful to take a concept out of it's original environment and see how it fits someplace else. Today we're going to examine an economic theory and see how it might apply to our personal lives.
The Economist website defines 'opportunity cost' as "The true cost of something is what you give up to get it. This includes not only the money spent in buying (or doing) the something, but also the economic benefits that you did without because you bought (or did) that particular something and thus can no long buy (or do) something else."
To put it simply, for everything you get, you give up something else. That's an important concept. Let's consider an easy example. If you spend $15 on a pair of jeans, you do not have that money available to buy a pizza. The 'cost' of the jeans is not only $15. It is also giving up a pizza.
Another way to look at opportunity cost is the amount of time we give up working to buy a product. Suppose you make $12 per hour. Our tax rates are all different, but you can pretty much expect to pay about 1/3 in Social Security and federal, state and local income taxes. That leaves you with $8.
Let's further suppose that you go out to lunch with co-workers every day. And a typical lunch costs you $6. Add a tip and sales tax and that lunch brings the total to $7.20. So you give up 54 minutes of your life every day to work just to pay for lunch.
How about a different situation. Remember that an opportunity cost is what you give up by making another choice. For instance, suppose that you choose to spend $100 on a credit card knowing that you'll pay the minimum when the bill comes due. In effect you've given up about $140 in the future to make that purchase today. That's because finance charges will be added to the cost of your purchase.
We face opportunity costs with our time, too. I can choose to spend an hour watching TV. But that's an hour that I won't be talking to my wife, playing with the kids, doing home projects or sleeping. Of course, watching TV might be the best use of that hour. Still, it's a good idea to think about it before you spend the hour.
Sometimes the difference between choices is surprising. Suppose you spend $1 at break time five days a week. No big deal. Right? But if you didn't spend that dollar every day and put it in a bank at 3% interest, you'd have $3,000 in ten years. Or $7,100 in 20 years. Or $20,000 in 40 years. So by choosing that $1 snack each day you've given up a new car when you retire. A good trade-off? Only you can decide.
There's also the possibility of trading money today for time tomorrow. For instance, you could use the money from those work day snacks to allow you to retire 3 or 6 months earlier than you would otherwise. Is it unusual to think of 'banking' a few minutes each day towards an early retirement? Perhaps, but it does give you a new perspective on spending.
But, what about credit cards? Don't they make it possible to buy both things that we want? Yes, you can use your plastic to do that.
But credit cards are deceptive. They lead you to believe that you can spend more than you make. And, for a short time that's probably true. But eventually you get to a situation where you can only afford the minimum payment each month. Once there, you're back where choosing to spend on one thing prevents you from buying something else. And, you've also made the choice of paying interest to the credit card company on the monthly balance instead of having that money for other uses.
So how can you use opportunity costs to help you live a happier life? By thinking of the alternatives before you spend your time and money. Even though something looks good, if you stop to compare, you might find something else that you'd prefer to spend your time or money on.
http://www.debtsmart.com/pages/article_lost_opportunities_031022414.html
The Economist website defines 'opportunity cost' as "The true cost of something is what you give up to get it. This includes not only the money spent in buying (or doing) the something, but also the economic benefits that you did without because you bought (or did) that particular something and thus can no long buy (or do) something else."
To put it simply, for everything you get, you give up something else. That's an important concept. Let's consider an easy example. If you spend $15 on a pair of jeans, you do not have that money available to buy a pizza. The 'cost' of the jeans is not only $15. It is also giving up a pizza.
Another way to look at opportunity cost is the amount of time we give up working to buy a product. Suppose you make $12 per hour. Our tax rates are all different, but you can pretty much expect to pay about 1/3 in Social Security and federal, state and local income taxes. That leaves you with $8.
Let's further suppose that you go out to lunch with co-workers every day. And a typical lunch costs you $6. Add a tip and sales tax and that lunch brings the total to $7.20. So you give up 54 minutes of your life every day to work just to pay for lunch.
How about a different situation. Remember that an opportunity cost is what you give up by making another choice. For instance, suppose that you choose to spend $100 on a credit card knowing that you'll pay the minimum when the bill comes due. In effect you've given up about $140 in the future to make that purchase today. That's because finance charges will be added to the cost of your purchase.
We face opportunity costs with our time, too. I can choose to spend an hour watching TV. But that's an hour that I won't be talking to my wife, playing with the kids, doing home projects or sleeping. Of course, watching TV might be the best use of that hour. Still, it's a good idea to think about it before you spend the hour.
Sometimes the difference between choices is surprising. Suppose you spend $1 at break time five days a week. No big deal. Right? But if you didn't spend that dollar every day and put it in a bank at 3% interest, you'd have $3,000 in ten years. Or $7,100 in 20 years. Or $20,000 in 40 years. So by choosing that $1 snack each day you've given up a new car when you retire. A good trade-off? Only you can decide.
There's also the possibility of trading money today for time tomorrow. For instance, you could use the money from those work day snacks to allow you to retire 3 or 6 months earlier than you would otherwise. Is it unusual to think of 'banking' a few minutes each day towards an early retirement? Perhaps, but it does give you a new perspective on spending.
But, what about credit cards? Don't they make it possible to buy both things that we want? Yes, you can use your plastic to do that.
But credit cards are deceptive. They lead you to believe that you can spend more than you make. And, for a short time that's probably true. But eventually you get to a situation where you can only afford the minimum payment each month. Once there, you're back where choosing to spend on one thing prevents you from buying something else. And, you've also made the choice of paying interest to the credit card company on the monthly balance instead of having that money for other uses.
So how can you use opportunity costs to help you live a happier life? By thinking of the alternatives before you spend your time and money. Even though something looks good, if you stop to compare, you might find something else that you'd prefer to spend your time or money on.
http://www.debtsmart.com/pages/article_lost_opportunities_031022414.html
Sunday, May 27, 2007
Top Ten Reasons People File for Bankruptcy
1. Eliminate the Legal Obligation to Pay Many of Your Debts.
This process of wiping the slate clean is called a discharge of debts. The goal of a discharge is to reduce debt to give you a fresh start. Whether it is through straight bankruptcy (Chapter 7 Bankruptcy) or through reorganization (Chapter 13 Bankruptcy), most or all of your debts can be cleared.
2. Stop Foreclosure on Your House and Allow You to Effectively Make Payments to Catch up on Missed Payments of Your Mortgage.
If your home is in foreclosure, Chapter 13 Bankruptcy will stop the foreclosure any time prior to the sale. Bankruptcy does not eliminate mortgages on your property without payment. Rather, bankruptcy will structure a plan in order to repay your mortgage arrears (the amount that you are behind).
3. Prevent Your Car or Other Property From Being Repossessed.
Even if the creditor has repossessed your car, filing bankruptcy can effectively force them to return your car or other personal property (if the bankruptcy is filed quickly enough). The past payments you have missed will be consolidated into your Chapter 13 Bankruptcy plan. After this you will no longer pay the finance company, rather you will make monthly payments to the trustee of your Chapter 13 Bankruptcy who will then pay the finance company.
4. Reduce or Even Eliminate High Medical Bills.
Sometimes an unfortunate accident or major recently discovered illness can completely ruin a family. Many families have to make choices on allocation of bills. Often, bills that were once important become insignificant to the large medical bills acquired by a loved one. Filing Chapter
7 Bankruptcy can greatly reduce the amount of medical bills.
5. Recent Loss of Employment.
Studies show that loss of work is one of the most common reasons people file for bankruptcy. This is very easy to see. A family can get comfortable on two maybe even one salary. They can take on regular amount of debts, join clubs, and pay normal bills with relative ease. All of a sudden one or both spouses lose a job and a family must go from two salaries to one. Losing a job is closely tied to high medical bills. Losing a job means this family may be left without the protection of insurance that was once provided by their employer. Often times these two factors combined create an almost impossible mountain to climb without the help of bankruptcy.
http://www.bankruptcyhome.com/top10reasons.htm
This process of wiping the slate clean is called a discharge of debts. The goal of a discharge is to reduce debt to give you a fresh start. Whether it is through straight bankruptcy (Chapter 7 Bankruptcy) or through reorganization (Chapter 13 Bankruptcy), most or all of your debts can be cleared.
2. Stop Foreclosure on Your House and Allow You to Effectively Make Payments to Catch up on Missed Payments of Your Mortgage.
If your home is in foreclosure, Chapter 13 Bankruptcy will stop the foreclosure any time prior to the sale. Bankruptcy does not eliminate mortgages on your property without payment. Rather, bankruptcy will structure a plan in order to repay your mortgage arrears (the amount that you are behind).
3. Prevent Your Car or Other Property From Being Repossessed.
Even if the creditor has repossessed your car, filing bankruptcy can effectively force them to return your car or other personal property (if the bankruptcy is filed quickly enough). The past payments you have missed will be consolidated into your Chapter 13 Bankruptcy plan. After this you will no longer pay the finance company, rather you will make monthly payments to the trustee of your Chapter 13 Bankruptcy who will then pay the finance company.
4. Reduce or Even Eliminate High Medical Bills.
Sometimes an unfortunate accident or major recently discovered illness can completely ruin a family. Many families have to make choices on allocation of bills. Often, bills that were once important become insignificant to the large medical bills acquired by a loved one. Filing Chapter
7 Bankruptcy can greatly reduce the amount of medical bills.
5. Recent Loss of Employment.
Studies show that loss of work is one of the most common reasons people file for bankruptcy. This is very easy to see. A family can get comfortable on two maybe even one salary. They can take on regular amount of debts, join clubs, and pay normal bills with relative ease. All of a sudden one or both spouses lose a job and a family must go from two salaries to one. Losing a job is closely tied to high medical bills. Losing a job means this family may be left without the protection of insurance that was once provided by their employer. Often times these two factors combined create an almost impossible mountain to climb without the help of bankruptcy.
http://www.bankruptcyhome.com/top10reasons.htm
Friday, May 25, 2007
bankruptcy trustee
Who is a Trustee?
In every case of filing for bankruptcy, an impartial trustee is appointed by the courts. The primary role of the trustee is to act as a representative of the creditor. The role of the trustee and the degree of involvement changes with different types of bankruptcy plans. Although, representative of the creditors, the trustees also have the responsibility to ensure that the debtor’s plan runs as smoothly as possible.
How Does the Trustee Work?
There are various ways in which a trustee goes about carrying out his main objective of protecting the interest of the creditor. For example, a trustee can collect property of the estate, object to discharge or certain exemptions a debtor may claim, liquidate nonexempt property in the estate and distribute the funds to appropriate creditors. Te trustee is appointed by the United State Trustee, an officer of the Department of Justice.
Let’s now look at the two types of bankruptcy filing and the roles the trustee plays therein:
Chapter 7: In a Chapter 7 Bankruptcy filing, the role of the trustee is limited. In most Chapter 7 cases, the debtor would not have any assets available, but in cases where there are assets, the trustee is responsible for the liquidation and distribution of money to the creditors. The trustee will check up on the bankruptcy, look at exemptions, schedules, and ensure that the debtor is sticking to the plan of action laid out by the court. The trustee also participates in creditor meetings, and oversees the process of selling assets. The trustee has the power to deny a discharge to the debtor if any evidence of fraud, perjury, or ineligibility is discovered.
The United States Trustee appoints every Chapter 7 trustee to a panel for a period of one year (renewable).
Chapter 13: No doubt, in a Chapter 13 filing the trustee’s role is not just of an overseer, and is much more involved. Ordinarily, there will be one trustee handling all Chapter 13 work in a particular district or area. There is of course no liquidation involved in a Chapter 13 case so the trustee’s responsibility is to manage the financial affairs of the debtor, in a way that facilitates paying back some of all of the credit. The trustee must be present at all hearings that concern property valuation, must ensure receipt of payments from the debtor and also the disbursal of money to the respective creditors.
The United States Trustee appoints a “standing trustee” to administer cases in a specific geographic area.
Chapter 11: The job of a trustee in a Chapter 11 case is multi-layered. The responsibilities include setting up official committees (usually up to 15 people) to serve a case and choosing members for the same; reviewing all reorganization plans submitted to ensure the information provided is adequate and accurate; ensure that deadlines are met; investigating any case of fraud, or abusive conduct and refer the case to the appropriate department.
In all cases, the United States Trustee oversees (at the minimum) the following functions of the panel/“standing” trustees:
* Administration of individual debtor estates
* Financial record-keeping
* Impose necessary requirements to ensure that fiduciary duties are carried out
The Balancing Act
It’s a literal tight rope walk. On the one hand is the responsibility to keep the creditors interests in mind, and on the other is to provide assistance in the smooth performance of the debtor’s plan. How can a debtor be sure whether a trustee is keeping a close watch on your activity to help in times of need, or to collect as much money as possible? There is no knowing really, and it’s a tough call that you might want to avoid taking. Leave this to the discernment and experienced eye of your attorney to judge. Keeping in mind the tendencies of a particular trustee, your attorney will help you structure the best possible scenario for your bankruptcy plan.
http://www.bankruptcyhome.com/trusteerole.htm
In every case of filing for bankruptcy, an impartial trustee is appointed by the courts. The primary role of the trustee is to act as a representative of the creditor. The role of the trustee and the degree of involvement changes with different types of bankruptcy plans. Although, representative of the creditors, the trustees also have the responsibility to ensure that the debtor’s plan runs as smoothly as possible.
How Does the Trustee Work?
There are various ways in which a trustee goes about carrying out his main objective of protecting the interest of the creditor. For example, a trustee can collect property of the estate, object to discharge or certain exemptions a debtor may claim, liquidate nonexempt property in the estate and distribute the funds to appropriate creditors. Te trustee is appointed by the United State Trustee, an officer of the Department of Justice.
Let’s now look at the two types of bankruptcy filing and the roles the trustee plays therein:
Chapter 7: In a Chapter 7 Bankruptcy filing, the role of the trustee is limited. In most Chapter 7 cases, the debtor would not have any assets available, but in cases where there are assets, the trustee is responsible for the liquidation and distribution of money to the creditors. The trustee will check up on the bankruptcy, look at exemptions, schedules, and ensure that the debtor is sticking to the plan of action laid out by the court. The trustee also participates in creditor meetings, and oversees the process of selling assets. The trustee has the power to deny a discharge to the debtor if any evidence of fraud, perjury, or ineligibility is discovered.
The United States Trustee appoints every Chapter 7 trustee to a panel for a period of one year (renewable).
Chapter 13: No doubt, in a Chapter 13 filing the trustee’s role is not just of an overseer, and is much more involved. Ordinarily, there will be one trustee handling all Chapter 13 work in a particular district or area. There is of course no liquidation involved in a Chapter 13 case so the trustee’s responsibility is to manage the financial affairs of the debtor, in a way that facilitates paying back some of all of the credit. The trustee must be present at all hearings that concern property valuation, must ensure receipt of payments from the debtor and also the disbursal of money to the respective creditors.
The United States Trustee appoints a “standing trustee” to administer cases in a specific geographic area.
Chapter 11: The job of a trustee in a Chapter 11 case is multi-layered. The responsibilities include setting up official committees (usually up to 15 people) to serve a case and choosing members for the same; reviewing all reorganization plans submitted to ensure the information provided is adequate and accurate; ensure that deadlines are met; investigating any case of fraud, or abusive conduct and refer the case to the appropriate department.
In all cases, the United States Trustee oversees (at the minimum) the following functions of the panel/“standing” trustees:
* Administration of individual debtor estates
* Financial record-keeping
* Impose necessary requirements to ensure that fiduciary duties are carried out
The Balancing Act
It’s a literal tight rope walk. On the one hand is the responsibility to keep the creditors interests in mind, and on the other is to provide assistance in the smooth performance of the debtor’s plan. How can a debtor be sure whether a trustee is keeping a close watch on your activity to help in times of need, or to collect as much money as possible? There is no knowing really, and it’s a tough call that you might want to avoid taking. Leave this to the discernment and experienced eye of your attorney to judge. Keeping in mind the tendencies of a particular trustee, your attorney will help you structure the best possible scenario for your bankruptcy plan.
http://www.bankruptcyhome.com/trusteerole.htm
Home Equity and Bankruptcy
Using Home Equity to Get Out of Bankruptcy
Once you take your time and look around for the alternatives that you have when you are faced with bankruptcy, you will find that there are a number of things you can do to make your situation better. Sometimes people cannot avoid filing for bankruptcy, but there it is possible to fix things up quicker once you have filed for bankruptcy.
The Chapter 13 Bankruptcy gives you the option of repaying the outstanding amount of your debt over a period of about three to five years. The good news here is that if you have equity on your house, then it is possible to use that equity in order to pay off your Chapter 13 bankruptcy at a much faster pace. A “pay-off” balance is required by Chapter 13 Bankruptcy in order to effectively repay a part of or the full amount of the debt. In such a scenario, a home equity loan or even refinancing your existing loan might be a good way to pay off the outstanding debt in a Chapter 13 Bankruptcy.
The benefit of taking up a new loan is that it will give you a longer period over which to pay off the debt. This means that you are not limited to the three to five years that the Chapter 13 Bankruptcy allows you. Additionally, most probably you will also be able to find a lower interest rate by refinancing your loan or getting a home equity loan.
When you talk to your attorney ask him or her to work out the remaining balance of your bankruptcy case and to file a motion in order to Incur Debt for you so that you are able to get the new loan. You should also consult your loan consultant in order to figure out what kinds of options are applicable for you in the loan program for your specific situation.
http://www.bankruptcyhome.com/home_equity.htm
Once you take your time and look around for the alternatives that you have when you are faced with bankruptcy, you will find that there are a number of things you can do to make your situation better. Sometimes people cannot avoid filing for bankruptcy, but there it is possible to fix things up quicker once you have filed for bankruptcy.
The Chapter 13 Bankruptcy gives you the option of repaying the outstanding amount of your debt over a period of about three to five years. The good news here is that if you have equity on your house, then it is possible to use that equity in order to pay off your Chapter 13 bankruptcy at a much faster pace. A “pay-off” balance is required by Chapter 13 Bankruptcy in order to effectively repay a part of or the full amount of the debt. In such a scenario, a home equity loan or even refinancing your existing loan might be a good way to pay off the outstanding debt in a Chapter 13 Bankruptcy.
The benefit of taking up a new loan is that it will give you a longer period over which to pay off the debt. This means that you are not limited to the three to five years that the Chapter 13 Bankruptcy allows you. Additionally, most probably you will also be able to find a lower interest rate by refinancing your loan or getting a home equity loan.
When you talk to your attorney ask him or her to work out the remaining balance of your bankruptcy case and to file a motion in order to Incur Debt for you so that you are able to get the new loan. You should also consult your loan consultant in order to figure out what kinds of options are applicable for you in the loan program for your specific situation.
http://www.bankruptcyhome.com/home_equity.htm
Debt Consolidation
Debt Consolidation
People who are faced with mounting debts and unpaid bills would most probably have thought of the phrase ‘debt consolidation’. We hear it over and over again, but what exact does it mean? And how does it help those who are in heavy debts?
A common misconception is the debt consolidation is a loan. That is not true. The process of debt consolidation consists of reorganizing the outstanding amount that you owe to your creditors and paying them back under new terms and conditions. The advantages of debt consolidation are that it reduces the total overdue amount and it also decreases the interest rates. Another plus point to debt consolidation is that it can erase financial charges.
In other words, debt consolidation is a process through which the consumer enters into a new contract which helps him or her pay off the old debts with lesser monthly installments.
People often confuse debt consolidation with consolidation loan. However these two things are not the same. To put it simply, consolidation loan is a long term loan that is meant to help you pay off your current debts. The interest rates for a consolidation loan might seem low, but because this is a loan that you have to pay off over a long period of time, the end result is that you will end up paying a lot more money over the years. Because of this catch in consolidation loans, debt consolidation is most probably a better way of paying of your current debts.
Debt consolidation has many benefits to it. For a start, the process of debt consolidation works at doing away with or reducing your past interest and penalty. Another way of saving you money is by consolidating your credit cards so that you do not have to keep track of all the different bills and payment dates. Through debt consolidation all your bills and accounts will be consolidated into one, making payments and keeping track of payments easier for you. Another benefit of debt consolidation is that it reduces the average interest rate on the total amount that you have overdue. A fresh debt consolidation plan is also a good way of coming up with a new payment plan according to your current abilities. A competent consolidation consultant will ensure that new payment plan is structured according to how much you can afford to pay at that point in your life.
The bottom line of debt consolidation programs is to allow you to get rid of your debts as soon as is practically possible. The result of which is that you will at last be free of calls from your creditors and in the long run you will get a new chance to re-establish your credit rating and have a more relaxed life.
http://www.bankruptcyhome.com/debtconsolidation.htm
People who are faced with mounting debts and unpaid bills would most probably have thought of the phrase ‘debt consolidation’. We hear it over and over again, but what exact does it mean? And how does it help those who are in heavy debts?
A common misconception is the debt consolidation is a loan. That is not true. The process of debt consolidation consists of reorganizing the outstanding amount that you owe to your creditors and paying them back under new terms and conditions. The advantages of debt consolidation are that it reduces the total overdue amount and it also decreases the interest rates. Another plus point to debt consolidation is that it can erase financial charges.
In other words, debt consolidation is a process through which the consumer enters into a new contract which helps him or her pay off the old debts with lesser monthly installments.
People often confuse debt consolidation with consolidation loan. However these two things are not the same. To put it simply, consolidation loan is a long term loan that is meant to help you pay off your current debts. The interest rates for a consolidation loan might seem low, but because this is a loan that you have to pay off over a long period of time, the end result is that you will end up paying a lot more money over the years. Because of this catch in consolidation loans, debt consolidation is most probably a better way of paying of your current debts.
Debt consolidation has many benefits to it. For a start, the process of debt consolidation works at doing away with or reducing your past interest and penalty. Another way of saving you money is by consolidating your credit cards so that you do not have to keep track of all the different bills and payment dates. Through debt consolidation all your bills and accounts will be consolidated into one, making payments and keeping track of payments easier for you. Another benefit of debt consolidation is that it reduces the average interest rate on the total amount that you have overdue. A fresh debt consolidation plan is also a good way of coming up with a new payment plan according to your current abilities. A competent consolidation consultant will ensure that new payment plan is structured according to how much you can afford to pay at that point in your life.
The bottom line of debt consolidation programs is to allow you to get rid of your debts as soon as is practically possible. The result of which is that you will at last be free of calls from your creditors and in the long run you will get a new chance to re-establish your credit rating and have a more relaxed life.
http://www.bankruptcyhome.com/debtconsolidation.htm
Thursday, May 24, 2007
bankruptcy
Top Ten Reasons People File for Bankruptcy
1. Eliminate the Legal Obligation to Pay Many of Your Debts.
This process of wiping the slate clean is called a discharge of debts. The goal of a discharge is to reduce debt to give you a fresh start. Whether it is through straight bankruptcy (Chapter 7 Bankruptcy) or through reorganization (Chapter 13 Bankruptcy), most or all of your debts can be cleared.
2. Stop Foreclosure on Your House and Allow You to Effectively Make Payments to Catch up on Missed Payments of Your Mortgage.
If your home is in foreclosure, Chapter 13 Bankruptcy will stop the foreclosure any time prior to the sale. Bankruptcy does not eliminate mortgages on your property without payment. Rather, bankruptcy will structure a plan in order to repay your mortgage arrears (the amount that you are behind).
3. Prevent Your Car or Other Property From Being Repossessed.
Even if the creditor has repossessed your car, filing bankruptcy can effectively force them to return your car or other personal property (if the bankruptcy is filed quickly enough). The past payments you have missed will be consolidated into your Chapter 13 Bankruptcy plan. After this you will no longer pay the finance company, rather you will make monthly payments to the trustee of your Chapter 13 Bankruptcy who will then pay the finance company.
4. Reduce or Even Eliminate High Medical Bills.
Sometimes an unfortunate accident or major recently discovered illness can completely ruin a family. Many families have to make choices on allocation of bills. Often, bills that were once important become insignificant to the large medical bills acquired by a loved one. Filing Chapter 7 Bankruptcy can greatly reduce the amount of medical bills.
5. Recent Loss of Employment.
Studies show that loss of work is one of the most common reasons people file for bankruptcy. This is very easy to see. A family can get comfortable on two maybe even one salary. They can take on regular amount of debts, join clubs, and pay normal bills with relative ease. All of a sudden one or both spouses lose a job and a family must go from two salaries to one. Losing a job is closely tied to high medical bills. Losing a job means this family may be left without the protection of insurance that was once provided by their employer. Often times these two factors combined create an almost impossible mountain to climb without the help of bankruptcy.
http://www.bankruptcyhome.com/top10reasons.htm
1. Eliminate the Legal Obligation to Pay Many of Your Debts.
This process of wiping the slate clean is called a discharge of debts. The goal of a discharge is to reduce debt to give you a fresh start. Whether it is through straight bankruptcy (Chapter 7 Bankruptcy) or through reorganization (Chapter 13 Bankruptcy), most or all of your debts can be cleared.
2. Stop Foreclosure on Your House and Allow You to Effectively Make Payments to Catch up on Missed Payments of Your Mortgage.
If your home is in foreclosure, Chapter 13 Bankruptcy will stop the foreclosure any time prior to the sale. Bankruptcy does not eliminate mortgages on your property without payment. Rather, bankruptcy will structure a plan in order to repay your mortgage arrears (the amount that you are behind).
3. Prevent Your Car or Other Property From Being Repossessed.
Even if the creditor has repossessed your car, filing bankruptcy can effectively force them to return your car or other personal property (if the bankruptcy is filed quickly enough). The past payments you have missed will be consolidated into your Chapter 13 Bankruptcy plan. After this you will no longer pay the finance company, rather you will make monthly payments to the trustee of your Chapter 13 Bankruptcy who will then pay the finance company.
4. Reduce or Even Eliminate High Medical Bills.
Sometimes an unfortunate accident or major recently discovered illness can completely ruin a family. Many families have to make choices on allocation of bills. Often, bills that were once important become insignificant to the large medical bills acquired by a loved one. Filing Chapter 7 Bankruptcy can greatly reduce the amount of medical bills.
5. Recent Loss of Employment.
Studies show that loss of work is one of the most common reasons people file for bankruptcy. This is very easy to see. A family can get comfortable on two maybe even one salary. They can take on regular amount of debts, join clubs, and pay normal bills with relative ease. All of a sudden one or both spouses lose a job and a family must go from two salaries to one. Losing a job is closely tied to high medical bills. Losing a job means this family may be left without the protection of insurance that was once provided by their employer. Often times these two factors combined create an almost impossible mountain to climb without the help of bankruptcy.
http://www.bankruptcyhome.com/top10reasons.htm
Top 12 Signs You Need To Talk To A Bankruptcy Attorney
The first step to overcoming a debt problem is recognizing it. If worries about your credit cards and loans are keeping you awake at night, you probably already know that you're in over your head. But if you've been cruising along, juggling credit cards and happily spending, you may not yet realize that you're on a dangerous path. If you find yourself in any of these situations, think seriously about addressing your debt.
1. You routinely spend more than you earn.
2. You make only the minimum payment required on your credit cards.
3. Your credit limit is maxed on most of your cards.
4. You're unsure about how much you owe or what may be on your credit report.
5. You skip payments on some bills in order to pay others, or use cash advances on one credit card to pay off another.
6. You skip payments on some bills in order to pay others, or use cash advances on one credit card to pay off another.
7. You find yourself arguing with your spouse about money. Or, you're are afraid to talk to your spouse about money at all.
8. You've recently been turned down for credit or a loan.
9. You panic when faced with an unexpected expense, such as a car repair.
10. You owe more on your car than it's worth.
11. Creditors are calling you about overdue bills.
12. You're thinking about filing for bankruptcy.
* free bankruptcy evaluation by a lawyer
http://www.bankruptcyhome.com/top12signs.htm
1. You routinely spend more than you earn.
2. You make only the minimum payment required on your credit cards.
3. Your credit limit is maxed on most of your cards.
4. You're unsure about how much you owe or what may be on your credit report.
5. You skip payments on some bills in order to pay others, or use cash advances on one credit card to pay off another.
6. You skip payments on some bills in order to pay others, or use cash advances on one credit card to pay off another.
7. You find yourself arguing with your spouse about money. Or, you're are afraid to talk to your spouse about money at all.
8. You've recently been turned down for credit or a loan.
9. You panic when faced with an unexpected expense, such as a car repair.
10. You owe more on your car than it's worth.
11. Creditors are calling you about overdue bills.
12. You're thinking about filing for bankruptcy.
* free bankruptcy evaluation by a lawyer
http://www.bankruptcyhome.com/top12signs.htm
student loan
If I File for Bankruptcy Will My Student Loans Get Discharged?
For those who have to repay a student loan and are considering filing for bankruptcy, the question on their mind would be: does filing for bankruptcy discharge my student load? Unfortunately, though, student loans most probably will not be discharged in the case of bankruptcy. According to Chapter 7 Bankruptcy the only circumstance when the student loan might be discharged is if it would cause the debtor “undue hardships”. Basically, the same rule is applicable for the Chapter 13 Bankruptcy cases also.
Discharging student loans gained attractiveness during the 70s, when students would file for bankruptcy soon after they finish their pricey education. They would do so before they start earning so that they could get the loan out of the way. However, the requirements that were considered before discharging a student loan were altered in 1998.
According to these new changes, your student loan will only be discharged if the bankruptcy court is convinced that paying back the loan would bring about undue hardships for you or the people who are dependent on you. Keeping this in mind, the Federal Student Aid Ombudsman (FSAO) stated that there were three criterions that would be used to determine whether a person is eligible to have their student loan discharged or not.
The first point that would be looked at is that in the case that you were forced to pay, you will not be able to maintain a minimal standard of living. The next point of consideration is if this difficulty in maintain finances will stretch out to a significant length of period over which you are expected to pay back the loan. The third and last criterion is that you have made an effort to repay the loan before you decided to file for bankruptcy. Your efforts to repay would usually be taken into consideration if you have been in repayment for at least five years.
If you do not meet these criteria when you file for bankruptcy then it is unlikely that your student loan would be discharged.
http://www.bankruptcyhome.com/studentloans.htm
For those who have to repay a student loan and are considering filing for bankruptcy, the question on their mind would be: does filing for bankruptcy discharge my student load? Unfortunately, though, student loans most probably will not be discharged in the case of bankruptcy. According to Chapter 7 Bankruptcy the only circumstance when the student loan might be discharged is if it would cause the debtor “undue hardships”. Basically, the same rule is applicable for the Chapter 13 Bankruptcy cases also.
Discharging student loans gained attractiveness during the 70s, when students would file for bankruptcy soon after they finish their pricey education. They would do so before they start earning so that they could get the loan out of the way. However, the requirements that were considered before discharging a student loan were altered in 1998.
According to these new changes, your student loan will only be discharged if the bankruptcy court is convinced that paying back the loan would bring about undue hardships for you or the people who are dependent on you. Keeping this in mind, the Federal Student Aid Ombudsman (FSAO) stated that there were three criterions that would be used to determine whether a person is eligible to have their student loan discharged or not.
The first point that would be looked at is that in the case that you were forced to pay, you will not be able to maintain a minimal standard of living. The next point of consideration is if this difficulty in maintain finances will stretch out to a significant length of period over which you are expected to pay back the loan. The third and last criterion is that you have made an effort to repay the loan before you decided to file for bankruptcy. Your efforts to repay would usually be taken into consideration if you have been in repayment for at least five years.
If you do not meet these criteria when you file for bankruptcy then it is unlikely that your student loan would be discharged.
http://www.bankruptcyhome.com/studentloans.htm
Wednesday, May 23, 2007
bankruptcy certification
New Bankruptcy Legislation Requirements
The law, which took effect on October 17, 2005, has taken up the onus of making the process of filing for bankruptcy a more laborious task, for attorneys and debtors. Of course, that's one side of the coin and the shift is undoubtedly geared towards benefiting the end customer; the debtor.
The documentation that is required when filing for bankruptcy has increased. For example, the debtor must provide additional information that details all income and expenses. In cases where the expenses exceed the IRS allowance, a special circumstances document must be submitted which reasons the necessity of the extra expense incurred. A statement of accuracy must also be submitted, along with these special circumstance documents.
The attorney’s job is further diversified, and a lot of responsibility for ensuring checks is put on the attorney. A signature of the attorney certifies that the petition has been reasonably inspected, and the proceeding is not an abuse of the bankruptcy process. The attorney also certifies that the proceeding is acceptable under current law or that it is a good faith argument for the extension/modification of current law. In case of a violation, the fees of the attorney and the debtor cost can be assessed and made payable to the trustee. This will possibly work as an incentive for trustees to file more motions, perhaps resulting in the need for additional insurance or an unknown increase in current rates.
In a bid to decrease the number of people filing bankruptcy, the new law requires that debtors receive counseling from an approved credit counseling agency within six months prior to filing the bankruptcy petition. This counseling would orient clients of other options that are available to them. Such a counseling session will ensure that people don’t take an uninformed decision to file for bankruptcy.
Here again, it will be the responsibility of the attorney to ensure that the client has attended a certified counseling program. But this is just as simple as a “have you” or “have you not” verification. In Senate hearings the credit counseling industry has been described as "a network of not-for-profit companies linked to for-profit conglomerates. … plagued with consumer complaints about excessive fees, pressure tactics, nonexistent counseling and education, promised results that never come about, ruined credit ratings, poor service, in many cases being left in worse debt than before they initiated their debt management plan.” The debtors’ job is not getting any easier, with counseling required even in such cases where repayment is impossible, or where a debtor faces an unfair debt.
Further more, while in the old law in consultation with attorneys debtors chose the type of bankruptcy that they felt suited them the most, in the new law that is not to be the case. The new law will also reduce the number of people who file for Chapter 7 bankruptcy by allowing only people who fall under the median state income, adjusted for family size and inflation, and people who meet the rigorous standards under the means test to file for it. A series of complex mathematical formulas have been put in place to evaluate the rest of people who don’t make this mark. These formulas won’t be fixed, and will be revised on an annual basis when the new median incomes are released. The new law utilizes income and expense standards devised by the IRS that vary by county. There are numerous exceptions and special circumstances to the standards that must be considered for each client.
Clients who do not qualify for the aforesaid means test will be required to file for Chapter 13 bankruptcy. Also, the new law has extended the term for Chapter 13 bankruptcy from the range of three to five years, to a mandatory five-year term. Chapter 13 Bankruptcy clients will now require supervision and representation for at least five years before they receive their discharge.
The effects of the new law are such that it would require attorneys to specialize in bankruptcy. These are complex rules, and a new level of commitment towards the protection of bankruptcy clients is mandated by it.
Yes, it would seem from hereon lawyers would be harder to find, because of the kind of complications that have been introduced under the new law. The commitment of Bankruptcyhome.com is undeterred! After all, the basic tenet of bankruptcy filing remains unchanged. A change in the law does not imply a change in the basic principles that we work on. We specialize in bankruptcy litigation will continue to assist clients, even in the face of new bankruptcy legislation.
http://www.bankruptcyhome.com/bankruptcy-certification.htm
The law, which took effect on October 17, 2005, has taken up the onus of making the process of filing for bankruptcy a more laborious task, for attorneys and debtors. Of course, that's one side of the coin and the shift is undoubtedly geared towards benefiting the end customer; the debtor.
The documentation that is required when filing for bankruptcy has increased. For example, the debtor must provide additional information that details all income and expenses. In cases where the expenses exceed the IRS allowance, a special circumstances document must be submitted which reasons the necessity of the extra expense incurred. A statement of accuracy must also be submitted, along with these special circumstance documents.
The attorney’s job is further diversified, and a lot of responsibility for ensuring checks is put on the attorney. A signature of the attorney certifies that the petition has been reasonably inspected, and the proceeding is not an abuse of the bankruptcy process. The attorney also certifies that the proceeding is acceptable under current law or that it is a good faith argument for the extension/modification of current law. In case of a violation, the fees of the attorney and the debtor cost can be assessed and made payable to the trustee. This will possibly work as an incentive for trustees to file more motions, perhaps resulting in the need for additional insurance or an unknown increase in current rates.
In a bid to decrease the number of people filing bankruptcy, the new law requires that debtors receive counseling from an approved credit counseling agency within six months prior to filing the bankruptcy petition. This counseling would orient clients of other options that are available to them. Such a counseling session will ensure that people don’t take an uninformed decision to file for bankruptcy.
Here again, it will be the responsibility of the attorney to ensure that the client has attended a certified counseling program. But this is just as simple as a “have you” or “have you not” verification. In Senate hearings the credit counseling industry has been described as "a network of not-for-profit companies linked to for-profit conglomerates. … plagued with consumer complaints about excessive fees, pressure tactics, nonexistent counseling and education, promised results that never come about, ruined credit ratings, poor service, in many cases being left in worse debt than before they initiated their debt management plan.” The debtors’ job is not getting any easier, with counseling required even in such cases where repayment is impossible, or where a debtor faces an unfair debt.
Further more, while in the old law in consultation with attorneys debtors chose the type of bankruptcy that they felt suited them the most, in the new law that is not to be the case. The new law will also reduce the number of people who file for Chapter 7 bankruptcy by allowing only people who fall under the median state income, adjusted for family size and inflation, and people who meet the rigorous standards under the means test to file for it. A series of complex mathematical formulas have been put in place to evaluate the rest of people who don’t make this mark. These formulas won’t be fixed, and will be revised on an annual basis when the new median incomes are released. The new law utilizes income and expense standards devised by the IRS that vary by county. There are numerous exceptions and special circumstances to the standards that must be considered for each client.
Clients who do not qualify for the aforesaid means test will be required to file for Chapter 13 bankruptcy. Also, the new law has extended the term for Chapter 13 bankruptcy from the range of three to five years, to a mandatory five-year term. Chapter 13 Bankruptcy clients will now require supervision and representation for at least five years before they receive their discharge.
The effects of the new law are such that it would require attorneys to specialize in bankruptcy. These are complex rules, and a new level of commitment towards the protection of bankruptcy clients is mandated by it.
Yes, it would seem from hereon lawyers would be harder to find, because of the kind of complications that have been introduced under the new law. The commitment of Bankruptcyhome.com is undeterred! After all, the basic tenet of bankruptcy filing remains unchanged. A change in the law does not imply a change in the basic principles that we work on. We specialize in bankruptcy litigation will continue to assist clients, even in the face of new bankruptcy legislation.
http://www.bankruptcyhome.com/bankruptcy-certification.htm
Tuesday, May 22, 2007
Regain Your Financial Health
Financial Health?
Unpaid bills are a symptom, and a disease at once, and they speak volumes about your financial health. But you are not the only one suffering from this disease that is spreading its wings across the length and breadth of the country. Commonly seen amongst middle income families, and the worst thing would be to let the problem (the debt) grow. The consequences of financial health are unprecedented.
End of the Road?
No, almost never. There are solutions to cure your financial ill-health and many of the other pages of this website will guide you through ways of tackling it. Everything from improving relationships with your creditors, to reducing your debts, and helping you manage your money—the whole range of problems sorted out for you, right here. These are solutions that will make your today comfortable, and your tomorrow even better.
How Do I Know if I am Affected?
Your account books are a good place to start checking. Unpaid bills, repeated calls from bill collectors; signs that you are probably in some sort of a financial trouble. If you're having difficulty stretching your paycheck to pay monthly bills, you need to act Now!
Action Plan
Review your situation in detail. Check if all the pending amounts against your name valid and there are no disputes on any of the debts. Contact your creditors and inform them about your situation. Explain the reasons because of which you are unable to make timely payments. If your creditor understands your situation it puts you in a relatively comfortable situation even though you still need to be very careful. Keep in mind that there are laws in place to protect you from any sort of harassment on the part of the creditor.
Self help: First of all, stop all the excess unnecessary spending and budget your expenses. Itemize your expenses as necessary and optional. Create a spending plan which will at least ensure that you don’t accumulate any more debt. Start using your savings to pay back your debts, and also looking for any additional resources that you can think of. Additional sources can be Governmental assistance such as unemployment compensation, food stamps, Medicaid, and others.
Credit Counseling: As for the new Bankruptcy law Credit counseling is a must. Also called Consumer Credit Counseling Service, these agencies employ professionals who will provide you with the required guidance to develop an action plan to end your financial crisis. Credit counseling agencies can also get into talks with your creditors, if need be in trying to achieve some sort of a settlement, or an understanding.
Personal Bankruptcy: The decision to file for bankruptcy must be taken after much thought and serious consideration. You should take the plunge into this complex world of forms, rules and regulations if you are certain of it, and have been advised to do so. Two types of Bankruptcy options available are Chapter 13 and Chapter 7. With the new stricter law in place, there are certain criterions that one needs to fulfill in order to file for bankruptcy. Once you’ve met these criterions, the next difficult step is to choose an attorney. Attorneys at BankruptcyHome.com bring with them years of expertise in this field enough to assess the solution that meets your specific need.
Prevention Better Than Cure
It is of course never to late to stop. You need to put an immediate end to spending that exceeds your earning, regular credit purchases especially if you are able to make only the minimum payment on the monthly credit card debt. Think of it this way; will you be able to pay your next month's bills if you didn't have your job?
If your answer is no, then try our free online evaluation tool which will tell you whether you need to file for bankruptcy or not. From thereon, our attorneys will ensure that your interests are secured, your ill-health a story of the past, and you are ready to start afresh.
http://www.bankruptcyhome.com/regainfinancialhealth.htm
Unpaid bills are a symptom, and a disease at once, and they speak volumes about your financial health. But you are not the only one suffering from this disease that is spreading its wings across the length and breadth of the country. Commonly seen amongst middle income families, and the worst thing would be to let the problem (the debt) grow. The consequences of financial health are unprecedented.
End of the Road?
No, almost never. There are solutions to cure your financial ill-health and many of the other pages of this website will guide you through ways of tackling it. Everything from improving relationships with your creditors, to reducing your debts, and helping you manage your money—the whole range of problems sorted out for you, right here. These are solutions that will make your today comfortable, and your tomorrow even better.
How Do I Know if I am Affected?
Your account books are a good place to start checking. Unpaid bills, repeated calls from bill collectors; signs that you are probably in some sort of a financial trouble. If you're having difficulty stretching your paycheck to pay monthly bills, you need to act Now!
Action Plan
Review your situation in detail. Check if all the pending amounts against your name valid and there are no disputes on any of the debts. Contact your creditors and inform them about your situation. Explain the reasons because of which you are unable to make timely payments. If your creditor understands your situation it puts you in a relatively comfortable situation even though you still need to be very careful. Keep in mind that there are laws in place to protect you from any sort of harassment on the part of the creditor.
Self help: First of all, stop all the excess unnecessary spending and budget your expenses. Itemize your expenses as necessary and optional. Create a spending plan which will at least ensure that you don’t accumulate any more debt. Start using your savings to pay back your debts, and also looking for any additional resources that you can think of. Additional sources can be Governmental assistance such as unemployment compensation, food stamps, Medicaid, and others.
Credit Counseling: As for the new Bankruptcy law Credit counseling is a must. Also called Consumer Credit Counseling Service, these agencies employ professionals who will provide you with the required guidance to develop an action plan to end your financial crisis. Credit counseling agencies can also get into talks with your creditors, if need be in trying to achieve some sort of a settlement, or an understanding.
Personal Bankruptcy: The decision to file for bankruptcy must be taken after much thought and serious consideration. You should take the plunge into this complex world of forms, rules and regulations if you are certain of it, and have been advised to do so. Two types of Bankruptcy options available are Chapter 13 and Chapter 7. With the new stricter law in place, there are certain criterions that one needs to fulfill in order to file for bankruptcy. Once you’ve met these criterions, the next difficult step is to choose an attorney. Attorneys at BankruptcyHome.com bring with them years of expertise in this field enough to assess the solution that meets your specific need.
Prevention Better Than Cure
It is of course never to late to stop. You need to put an immediate end to spending that exceeds your earning, regular credit purchases especially if you are able to make only the minimum payment on the monthly credit card debt. Think of it this way; will you be able to pay your next month's bills if you didn't have your job?
If your answer is no, then try our free online evaluation tool which will tell you whether you need to file for bankruptcy or not. From thereon, our attorneys will ensure that your interests are secured, your ill-health a story of the past, and you are ready to start afresh.
http://www.bankruptcyhome.com/regainfinancialhealth.htm
Life after Bankruptcy
Is There Life After Bankruptcy?
Yes, of course there is. As much as it may seem that it is an impossibility, it is very much possible to rebuild you financial life—start from scratch. But the answer to this question doesn’t end with a simple ‘yes’.
Bankruptcyhome.com
BankruptcyHome.com is the answer to that first question! Our role is not just as an advisor or a guide but also as someone who will provide you with a practical solution customized to your specific situation. Our objective goes beyond just explaining regulations, filling out forms, and shutting out creditors and credit.
A leading provider of bankruptcy related services and solutions, BankruptcyHome.com has become a trusted name with people who are determined to end an existing or impending financial crisis. Our determined efforts will ensure that you are freed of debt, and the harassment that you may have suffered because of it. Furthermore, we will see to it that not only does the crisis come to an end, but that you have a fresh start.
Our competitive services are geared towards benefiting you the most.
Filing Bankruptcy
You may think you don’t need it, but you can never know when those unpaid bills grow so long that within your limited resources you are unable to settle them. Don’t know whether you should or not? BankruptcyHome.com will answer even that fundamental question, with the help of the online evaluation tool.
Life After Bankruptcy
A lot more that just your money and yours assets are at stake when you are in a financial crisis. You need to find a solution that doesn’t cause any more damage to your self-respect, your honor than bankruptcy has already caused. Remember, a bankruptcy will stay on your credit record from the time of filing until the roll over period of the credit reporting agency. BankruptcyHome.com has for you all the information you will need about filing for bankruptcy, and the life after it.
Be confident that the solutions provided by our attorneys are farsighted and tailor-made. No two situations are comparable, and even though the type of bankruptcy applied may be the same there may be a difference in approach. As has been said before, the process of filing for bankruptcy is not as simplistic as it seems. And BankruptcyHome.com excels in the nuances involved.
We work within your budget to create a program that will solve your crisis, by reducing the debt amount you owe, and the years that you would otherwise have to spend paying it back. This is your opportunity to regain faith in yourself, and with the help of a professional financial coach plan every step you take until you reach the goal – that day when your debt is totally wiped out.
Our team of professional experts with extensive knowledge and experience in the fields of law, accounting, financial planning, insurance, debt and budget management, and psychology. We will make sure the most severe situation.
Contrary to the popular myth, a negative history on your credit report is not the end of the road. Having filed for bankruptcy does not leave a permanent black mark on your credit report. It is not going to be difficult to remove the blot from your own mind, but you need to do that. Be sure that your learning from this experience is positive and helps you in the long run. We are fully aware of the fact that the first two or three years after bankruptcy are going to be difficult times. Yet, these are not going to be impossible times and the advice offered by the attorneys is the best way forward.
Our attorneys will provide you all the moral and legal support you need, help you get out of your financial crisis and ensure a better tomorrow.
http://www.bankruptcyhome.com/lifeafterbankruptcy.htm
Yes, of course there is. As much as it may seem that it is an impossibility, it is very much possible to rebuild you financial life—start from scratch. But the answer to this question doesn’t end with a simple ‘yes’.
Bankruptcyhome.com
BankruptcyHome.com is the answer to that first question! Our role is not just as an advisor or a guide but also as someone who will provide you with a practical solution customized to your specific situation. Our objective goes beyond just explaining regulations, filling out forms, and shutting out creditors and credit.
A leading provider of bankruptcy related services and solutions, BankruptcyHome.com has become a trusted name with people who are determined to end an existing or impending financial crisis. Our determined efforts will ensure that you are freed of debt, and the harassment that you may have suffered because of it. Furthermore, we will see to it that not only does the crisis come to an end, but that you have a fresh start.
Our competitive services are geared towards benefiting you the most.
Filing Bankruptcy
You may think you don’t need it, but you can never know when those unpaid bills grow so long that within your limited resources you are unable to settle them. Don’t know whether you should or not? BankruptcyHome.com will answer even that fundamental question, with the help of the online evaluation tool.
Life After Bankruptcy
A lot more that just your money and yours assets are at stake when you are in a financial crisis. You need to find a solution that doesn’t cause any more damage to your self-respect, your honor than bankruptcy has already caused. Remember, a bankruptcy will stay on your credit record from the time of filing until the roll over period of the credit reporting agency. BankruptcyHome.com has for you all the information you will need about filing for bankruptcy, and the life after it.
Be confident that the solutions provided by our attorneys are farsighted and tailor-made. No two situations are comparable, and even though the type of bankruptcy applied may be the same there may be a difference in approach. As has been said before, the process of filing for bankruptcy is not as simplistic as it seems. And BankruptcyHome.com excels in the nuances involved.
We work within your budget to create a program that will solve your crisis, by reducing the debt amount you owe, and the years that you would otherwise have to spend paying it back. This is your opportunity to regain faith in yourself, and with the help of a professional financial coach plan every step you take until you reach the goal – that day when your debt is totally wiped out.
Our team of professional experts with extensive knowledge and experience in the fields of law, accounting, financial planning, insurance, debt and budget management, and psychology. We will make sure the most severe situation.
Contrary to the popular myth, a negative history on your credit report is not the end of the road. Having filed for bankruptcy does not leave a permanent black mark on your credit report. It is not going to be difficult to remove the blot from your own mind, but you need to do that. Be sure that your learning from this experience is positive and helps you in the long run. We are fully aware of the fact that the first two or three years after bankruptcy are going to be difficult times. Yet, these are not going to be impossible times and the advice offered by the attorneys is the best way forward.
Our attorneys will provide you all the moral and legal support you need, help you get out of your financial crisis and ensure a better tomorrow.
http://www.bankruptcyhome.com/lifeafterbankruptcy.htm
Monday, May 21, 2007
Choosing a Bankruptcy Attorney
When faced with such a serious financial problem that you have to file for bankruptcy, perhaps the smartest and safest thing to do would be to let the professionals guide you through the rough waters. But once you have taken the decision to consult a bankruptcy attorney, you might find yourself lost about where to find a qualified one.
* Free Bankruptcy Evaluation
* Bankruptcy Myths Busted
* Chapter 13 basics
Looking up an Attorney in The Yellow Pages
The Yellow Pages is a helpful source with a vast amount of information. Attorneys are usually categorized by their field of specialization. Looking under the sub-heading of ‘Bankruptcy Attorneys’ should give you a list of attorneys who could help you out. Even so, it would be a good idea to use the Yellow Pages just as a starting point to familiarize yourself with the attorneys near you.
Recommendations by Other Attorneys
Another way to go about finding yourself a qualified bankruptcy attorney is by referral from those who are more familiar with the field. If there are other attorneys you know, they might be able to make some helpful recommendations.
Ask Your Family and Friends
Unfortunately, because of duty of confidentiality lawyers cannot share the information about their current or past clients unless they have permission to do so. It would have been ideal to be able to talk to clients to find out the competence of a lawyer, but since that is not always possible you can try talking to close and trusted family and friends who might guide you in the right direction. These recommendations from experiences family members and friends will give you an insight into the lawyer’s competence and also the relationship he or she shares with their clients.
Contacting one of our attorneys and make it about our attorneys…they all offer free consultations, all are experienced, need to fill out our evaluation etc.
Contacting one of Our Attorneys
Do not be hasty in your choice of an attorney. Consider if the attorney makes you comfortable and is considerate about your problem. Try to see if the attorney/staff are organized, punctual and work well together. Last but not the least, you should also ensure that matters about fees and payment are settled.
The first consultation with our bankruptcy attorney is free. At this time the client should honestly explain his or her situation to the attorney and try to gauge if they are comfortable with the attorney and their staff. At the same time our attorney will give you feedback on your situation and the options thereon.
When conversing with our attorney, find out how long he or she has been in practice, what the specifics of their specialization are, approximately how many cases they have handled and what your expectations should be from the attorney in terms of representation. Also find out if the attorney will be personally attending to your case and that it will not be passed on to a junior lawyer or staff. Ask as many questions as you need and make sure you are comfortable with the fact that you are appointing them as your bankruptcy attorney.
Though the fee of an attorney is an important consideration, do not make that the only factor when making a choice. The bottom-line is your level of comfort and the confidence you feel toward the attorney. Give us an opportunity, and be rest assured that your case is in safe hands.
http://www.bankruptcyhome.com/choosinganattorney.htm
* Free Bankruptcy Evaluation
* Bankruptcy Myths Busted
* Chapter 13 basics
Looking up an Attorney in The Yellow Pages
The Yellow Pages is a helpful source with a vast amount of information. Attorneys are usually categorized by their field of specialization. Looking under the sub-heading of ‘Bankruptcy Attorneys’ should give you a list of attorneys who could help you out. Even so, it would be a good idea to use the Yellow Pages just as a starting point to familiarize yourself with the attorneys near you.
Recommendations by Other Attorneys
Another way to go about finding yourself a qualified bankruptcy attorney is by referral from those who are more familiar with the field. If there are other attorneys you know, they might be able to make some helpful recommendations.
Ask Your Family and Friends
Unfortunately, because of duty of confidentiality lawyers cannot share the information about their current or past clients unless they have permission to do so. It would have been ideal to be able to talk to clients to find out the competence of a lawyer, but since that is not always possible you can try talking to close and trusted family and friends who might guide you in the right direction. These recommendations from experiences family members and friends will give you an insight into the lawyer’s competence and also the relationship he or she shares with their clients.
Contacting one of our attorneys and make it about our attorneys…they all offer free consultations, all are experienced, need to fill out our evaluation etc.
Contacting one of Our Attorneys
Do not be hasty in your choice of an attorney. Consider if the attorney makes you comfortable and is considerate about your problem. Try to see if the attorney/staff are organized, punctual and work well together. Last but not the least, you should also ensure that matters about fees and payment are settled.
The first consultation with our bankruptcy attorney is free. At this time the client should honestly explain his or her situation to the attorney and try to gauge if they are comfortable with the attorney and their staff. At the same time our attorney will give you feedback on your situation and the options thereon.
When conversing with our attorney, find out how long he or she has been in practice, what the specifics of their specialization are, approximately how many cases they have handled and what your expectations should be from the attorney in terms of representation. Also find out if the attorney will be personally attending to your case and that it will not be passed on to a junior lawyer or staff. Ask as many questions as you need and make sure you are comfortable with the fact that you are appointing them as your bankruptcy attorney.
Though the fee of an attorney is an important consideration, do not make that the only factor when making a choice. The bottom-line is your level of comfort and the confidence you feel toward the attorney. Give us an opportunity, and be rest assured that your case is in safe hands.
http://www.bankruptcyhome.com/choosinganattorney.htm
Saturday, May 19, 2007
Bankruptcy Reform
Bankruptcy Reform
On May 14th 2004 the new Bankruptcy Legislation Amendment (anti-avoidance and other measures) Bill was introduced. The purpose of this bill was to curtail the unfair way in which some high income earners were using bankruptcy laws as a way of avoiding their tax payments. Even though the number of affluent people who try to use bankruptcy as an excuse is small, their share still amounts up to a significant sum. These people have the ability to pay their taxes but by filing for bankruptcy they are able to avoid their tax obligations.
Despite the good intensions with which this bill has been introduced, some people are worried that though this bill was initiated to curb tax avoidance by those who can afford it but it might also adversely influence other people who actually need the advantages of filing for bankruptcy to solve their serious financial problems.
The bill came into effect quickly after it was introduced in May 2004. On May 21st 2004 the Chairman of the House of Representatives Standing Committee on Legal and Constitutional Affairs, Bronwyn Bishop made it known to the media that the committee is examining changes to bankruptcy laws. On the 18th of June, 2004 the ICAA expressed its support for the legislation, however they also voiced their concern about the effect that this new law would have on the individuals who genuinely were in financial trouble and were not using bankruptcy as a technique of tax evasion. By the 7th of December 2005 the Bankruptcy Legislation Amendment (Anti-Avoidance) Bill 2005 was introduced into parliament.
The bill has been effective from October 17, 2005 and with this bill it would be more difficult for people to make a fresh start with their finances by filing for bankruptcy. Since the law has come into effect, filing for Chapter 7 bankruptcy will be considerably changed. Unlike earlier, a means test will be conducted in order to evaluate if you quality for Chapter 7 or not. In addition to that you will also have to attend, and pay for, debt counseling which is mandatory and will be considered as part of the criterion for determining your qualification. At the same time, if it so happens that you do not qualify for Chapter 7 bankruptcy, then you can still file for bankruptcy under Chapter 13, even though it is a much more complicated process.
* free bankruptcy evaluation by a lawyer
http://www.bankruptcyhome.com/bankruptcyreform.htm
On May 14th 2004 the new Bankruptcy Legislation Amendment (anti-avoidance and other measures) Bill was introduced. The purpose of this bill was to curtail the unfair way in which some high income earners were using bankruptcy laws as a way of avoiding their tax payments. Even though the number of affluent people who try to use bankruptcy as an excuse is small, their share still amounts up to a significant sum. These people have the ability to pay their taxes but by filing for bankruptcy they are able to avoid their tax obligations.
Despite the good intensions with which this bill has been introduced, some people are worried that though this bill was initiated to curb tax avoidance by those who can afford it but it might also adversely influence other people who actually need the advantages of filing for bankruptcy to solve their serious financial problems.
The bill came into effect quickly after it was introduced in May 2004. On May 21st 2004 the Chairman of the House of Representatives Standing Committee on Legal and Constitutional Affairs, Bronwyn Bishop made it known to the media that the committee is examining changes to bankruptcy laws. On the 18th of June, 2004 the ICAA expressed its support for the legislation, however they also voiced their concern about the effect that this new law would have on the individuals who genuinely were in financial trouble and were not using bankruptcy as a technique of tax evasion. By the 7th of December 2005 the Bankruptcy Legislation Amendment (Anti-Avoidance) Bill 2005 was introduced into parliament.
The bill has been effective from October 17, 2005 and with this bill it would be more difficult for people to make a fresh start with their finances by filing for bankruptcy. Since the law has come into effect, filing for Chapter 7 bankruptcy will be considerably changed. Unlike earlier, a means test will be conducted in order to evaluate if you quality for Chapter 7 or not. In addition to that you will also have to attend, and pay for, debt counseling which is mandatory and will be considered as part of the criterion for determining your qualification. At the same time, if it so happens that you do not qualify for Chapter 7 bankruptcy, then you can still file for bankruptcy under Chapter 13, even though it is a much more complicated process.
* free bankruptcy evaluation by a lawyer
http://www.bankruptcyhome.com/bankruptcyreform.htm
Bankruptcy and Jobs
Bankruptcy and Co-signers
Before filing for bankruptcy you need to make sure which type is appropriate for your situation. At this time it is important to ask if your co-signer would be asked to pay your debt if your file for bankruptcy. The answer to this question would depend on the type of bankruptcy that you file for and the particulars of your bankruptcy plan.
Essentially, only a Chapter 13 bankruptcy will protect your co-signer. With a Chapter 7 bankruptcy, only the debtor is protected and the co-signer will still be liable for the debt. That is to say, with Chapter 7 bankruptcy, the creditors will still have the right to demand that your co-signer pay off the outstanding payments. On the other hand, Chapter 13 bankruptcy is able to give the co-signer increased protection under the right conditions. Under chapter 13 bankruptcy, as long as the bankruptcy plan is active the co-signers will receive a stay. All the same, when the plan closes, the co-signer is once again liable to pay any outstanding payments. The following aspects should stay constant while your file for bankruptcy and in the later processes also. If any one of the following factors is not satisfied at the point of bankruptcy filing or later, then your co-signer will be responsible to pay off your debts. The factors are:
* you file for Chapter 13 bankruptcy. Chapter 7 will not protect your co-signers
* the debt of the co-signer has to be a consumer debt, which is to say, a personal debt and not a business one.
* the co-signer is not the recipient of any benefits from the debt proceeds.
* the accurate bankruptcy plan payments are made in accordance with your bankruptcy.
When filing for bankruptcy, one needs to keep in mind that the conditions mentioned above are legal ones and have to be dealt with in the appropriate manner. It would be advisable to contact a bankruptcy attorney to ensure the protection of your co-signer.
http://www.bankruptcyhome.com/bankruptcyandjobs.htm
Before filing for bankruptcy you need to make sure which type is appropriate for your situation. At this time it is important to ask if your co-signer would be asked to pay your debt if your file for bankruptcy. The answer to this question would depend on the type of bankruptcy that you file for and the particulars of your bankruptcy plan.
Essentially, only a Chapter 13 bankruptcy will protect your co-signer. With a Chapter 7 bankruptcy, only the debtor is protected and the co-signer will still be liable for the debt. That is to say, with Chapter 7 bankruptcy, the creditors will still have the right to demand that your co-signer pay off the outstanding payments. On the other hand, Chapter 13 bankruptcy is able to give the co-signer increased protection under the right conditions. Under chapter 13 bankruptcy, as long as the bankruptcy plan is active the co-signers will receive a stay. All the same, when the plan closes, the co-signer is once again liable to pay any outstanding payments. The following aspects should stay constant while your file for bankruptcy and in the later processes also. If any one of the following factors is not satisfied at the point of bankruptcy filing or later, then your co-signer will be responsible to pay off your debts. The factors are:
* you file for Chapter 13 bankruptcy. Chapter 7 will not protect your co-signers
* the debt of the co-signer has to be a consumer debt, which is to say, a personal debt and not a business one.
* the co-signer is not the recipient of any benefits from the debt proceeds.
* the accurate bankruptcy plan payments are made in accordance with your bankruptcy.
When filing for bankruptcy, one needs to keep in mind that the conditions mentioned above are legal ones and have to be dealt with in the appropriate manner. It would be advisable to contact a bankruptcy attorney to ensure the protection of your co-signer.
http://www.bankruptcyhome.com/bankruptcyandjobs.htm
Bankruptcy and Cosigners
Bankruptcy and Co-signers
Before filing for bankruptcy you need to make sure which type is appropriate for your situation. At this time it is important to ask if your co-signer would be asked to pay your debt if your file for bankruptcy. The answer to this question would depend on the type of bankruptcy that you file for and the particulars of your bankruptcy plan.
Essentially, only a Chapter 13 bankruptcy will protect your co-signer. With a Chapter 7 bankruptcy, only the debtor is protected and the co-signer will still be liable for the debt. That is to say, with Chapter 7 bankruptcy, the creditors will still have the right to demand that your co-signer pay off the outstanding payments. On the other hand, Chapter 13 bankruptcy is able to give the co-signer increased protection under the right conditions. Under chapter 13 bankruptcy, as long as the bankruptcy plan is active the co-signers will receive a stay. All the same, when the plan closes, the co-signer is once again liable to pay any outstanding payments. The following aspects should stay constant while your file for bankruptcy and in the later processes also. If any one of the following factors is not satisfied at the point of bankruptcy filing or later, then your co-signer will be responsible to pay off your debts. The factors are:
* you file for Chapter 13 bankruptcy. Chapter 7 will not protect your co-signers
* the debt of the co-signer has to be a consumer debt, which is to say, a personal debt and not a business one.
* the co-signer is not the recipient of any benefits from the debt proceeds.
* the accurate bankruptcy plan payments are made in accordance with your bankruptcy.
When filing for bankruptcy, one needs to keep in mind that the conditions mentioned above are legal ones and have to be dealt with in the appropriate manner. It would be advisable to contact a bankruptcy attorney to ensure the protection of your co-signer.
http://www.bankruptcyhome.com/cosigners.htm
Before filing for bankruptcy you need to make sure which type is appropriate for your situation. At this time it is important to ask if your co-signer would be asked to pay your debt if your file for bankruptcy. The answer to this question would depend on the type of bankruptcy that you file for and the particulars of your bankruptcy plan.
Essentially, only a Chapter 13 bankruptcy will protect your co-signer. With a Chapter 7 bankruptcy, only the debtor is protected and the co-signer will still be liable for the debt. That is to say, with Chapter 7 bankruptcy, the creditors will still have the right to demand that your co-signer pay off the outstanding payments. On the other hand, Chapter 13 bankruptcy is able to give the co-signer increased protection under the right conditions. Under chapter 13 bankruptcy, as long as the bankruptcy plan is active the co-signers will receive a stay. All the same, when the plan closes, the co-signer is once again liable to pay any outstanding payments. The following aspects should stay constant while your file for bankruptcy and in the later processes also. If any one of the following factors is not satisfied at the point of bankruptcy filing or later, then your co-signer will be responsible to pay off your debts. The factors are:
* you file for Chapter 13 bankruptcy. Chapter 7 will not protect your co-signers
* the debt of the co-signer has to be a consumer debt, which is to say, a personal debt and not a business one.
* the co-signer is not the recipient of any benefits from the debt proceeds.
* the accurate bankruptcy plan payments are made in accordance with your bankruptcy.
When filing for bankruptcy, one needs to keep in mind that the conditions mentioned above are legal ones and have to be dealt with in the appropriate manner. It would be advisable to contact a bankruptcy attorney to ensure the protection of your co-signer.
http://www.bankruptcyhome.com/cosigners.htm
Friday, May 18, 2007
New Bankruptcy Legislation Requirements
The law, which took effect on October 17, 2005, has taken up the onus of making the process of filing for bankruptcy a more laborious task, for attorneys and debtors. Of course, that's one side of the coin and the shift is undoubtedly geared towards benefiting the end customer; the debtor.
The documentation that is required when filing for bankruptcy has increased. For example, the debtor must provide additional information that details all income and expenses. In cases where the expenses exceed the IRS allowance, a special circumstances document must be submitted which reasons the necessity of the extra expense incurred. A statement of accuracy must also be submitted, along with these special circumstance documents.
The attorney’s job is further diversified, and a lot of responsibility for ensuring checks is put on the attorney. A signature of the attorney certifies that the petition has been reasonably inspected, and the proceeding is not an abuse of the bankruptcy process. The attorney also certifies that the proceeding is acceptable under current law or that it is a good faith argument for the extension/modification of current law. In case of a violation, the fees of the attorney and the debtor cost can be assessed and made payable to the trustee. This will possibly work as an incentive for trustees to file more motions, perhaps resulting in the need for additional insurance or an unknown increase in current rates.
In a bid to decrease the number of people filing bankruptcy, the new law requires that debtors receive counseling from an approved credit counseling agency within six months prior to filing the bankruptcy petition. This counseling would orient clients of other options that are available to them. Such a counseling session will ensure that people don’t take an uninformed decision to file for bankruptcy.
Here again, it will be the responsibility of the attorney to ensure that the client has attended a certified counseling program. But this is just as simple as a “have you” or “have you not” verification. In Senate hearings the credit counseling industry has been described as "a network of not-for-profit companies linked to for-profit conglomerates. … plagued with consumer complaints about excessive fees, pressure tactics, nonexistent counseling and education, promised results that never come about, ruined credit ratings, poor service, in many cases being left in worse debt than before they initiated their debt management plan.” The debtors’ job is not getting any easier, with counseling required even in such cases where repayment is impossible, or where a debtor faces an unfair debt.
Further more, while in the old law in consultation with attorneys debtors chose the type of bankruptcy that they felt suited them the most, in the new law that is not to be the case. The new law will also reduce the number of people who file for Chapter 7 bankruptcy by allowing only people who fall under the median state income, adjusted for family size and inflation, and people who meet the rigorous standards under the means test to file for it. A series of complex mathematical formulas have been put in place to evaluate the rest of people who don’t make this mark. These formulas won’t be fixed, and will be revised on an annual basis when the new median incomes are released. The new law utilizes income and expense standards devised by the IRS that vary by county. There are numerous exceptions and special circumstances to the standards that must be considered for each client.
Clients who do not qualify for the aforesaid means test will be required to file for Chapter 13 bankruptcy. Also, the new law has extended the term for Chapter 13 bankruptcy from the range of three to five years, to a mandatory five-year term. Chapter 13 Bankruptcy clients will now require supervision and representation for at least five years before they receive their discharge.
The effects of the new law are such that it would require attorneys to specialize in bankruptcy. These are complex rules, and a new level of commitment towards the protection of bankruptcy clients is mandated by it.
Yes, it would seem from hereon lawyers would be harder to find, because of the kind of complications that have been introduced under the new law. The commitment of Bankruptcyhome.com is undeterred! After all, the basic tenet of bankruptcy filing remains unchanged. A change in the law does not imply a change in the basic principles that we work on. We specialize in bankruptcy litigation will continue to assist clients, even in the face of new bankruptcy legislation.
http://www.bankruptcyhome.com/bankruptcy-certification.htm
The documentation that is required when filing for bankruptcy has increased. For example, the debtor must provide additional information that details all income and expenses. In cases where the expenses exceed the IRS allowance, a special circumstances document must be submitted which reasons the necessity of the extra expense incurred. A statement of accuracy must also be submitted, along with these special circumstance documents.
The attorney’s job is further diversified, and a lot of responsibility for ensuring checks is put on the attorney. A signature of the attorney certifies that the petition has been reasonably inspected, and the proceeding is not an abuse of the bankruptcy process. The attorney also certifies that the proceeding is acceptable under current law or that it is a good faith argument for the extension/modification of current law. In case of a violation, the fees of the attorney and the debtor cost can be assessed and made payable to the trustee. This will possibly work as an incentive for trustees to file more motions, perhaps resulting in the need for additional insurance or an unknown increase in current rates.
In a bid to decrease the number of people filing bankruptcy, the new law requires that debtors receive counseling from an approved credit counseling agency within six months prior to filing the bankruptcy petition. This counseling would orient clients of other options that are available to them. Such a counseling session will ensure that people don’t take an uninformed decision to file for bankruptcy.
Here again, it will be the responsibility of the attorney to ensure that the client has attended a certified counseling program. But this is just as simple as a “have you” or “have you not” verification. In Senate hearings the credit counseling industry has been described as "a network of not-for-profit companies linked to for-profit conglomerates. … plagued with consumer complaints about excessive fees, pressure tactics, nonexistent counseling and education, promised results that never come about, ruined credit ratings, poor service, in many cases being left in worse debt than before they initiated their debt management plan.” The debtors’ job is not getting any easier, with counseling required even in such cases where repayment is impossible, or where a debtor faces an unfair debt.
Further more, while in the old law in consultation with attorneys debtors chose the type of bankruptcy that they felt suited them the most, in the new law that is not to be the case. The new law will also reduce the number of people who file for Chapter 7 bankruptcy by allowing only people who fall under the median state income, adjusted for family size and inflation, and people who meet the rigorous standards under the means test to file for it. A series of complex mathematical formulas have been put in place to evaluate the rest of people who don’t make this mark. These formulas won’t be fixed, and will be revised on an annual basis when the new median incomes are released. The new law utilizes income and expense standards devised by the IRS that vary by county. There are numerous exceptions and special circumstances to the standards that must be considered for each client.
Clients who do not qualify for the aforesaid means test will be required to file for Chapter 13 bankruptcy. Also, the new law has extended the term for Chapter 13 bankruptcy from the range of three to five years, to a mandatory five-year term. Chapter 13 Bankruptcy clients will now require supervision and representation for at least five years before they receive their discharge.
The effects of the new law are such that it would require attorneys to specialize in bankruptcy. These are complex rules, and a new level of commitment towards the protection of bankruptcy clients is mandated by it.
Yes, it would seem from hereon lawyers would be harder to find, because of the kind of complications that have been introduced under the new law. The commitment of Bankruptcyhome.com is undeterred! After all, the basic tenet of bankruptcy filing remains unchanged. A change in the law does not imply a change in the basic principles that we work on. We specialize in bankruptcy litigation will continue to assist clients, even in the face of new bankruptcy legislation.
http://www.bankruptcyhome.com/bankruptcy-certification.htm
Filing Bankruptcy Process
Those who are faced with the overwhelming fact that their debts have grown to such a large amount that they might have to file for bankruptcy might not have a clue about how to go about this course. The first and foremost step to take is to put your bankrupt status on paper by filing for bankruptcy through the bankruptcy court. But how exactly does one go about it?
First of all, you should keep in mind that filing for bankruptcy is a legal process. For this reason, and for your own financial wellbeing, each decision that you make about bankruptcy should be well informed choices. That is to say, is this process something you want to take up on your own, or do you want a professional to help you? It is possible to file for bankruptcy on your own; however, it is a process that would take a lot of patience and diligence.
If you decide that you want to file for bankruptcy on your own, the first decision you have to make is which kind of bankruptcy you should file for: Chapter 7 or Chapter 13? Once again, these decisions cannot be made fast. So it would be a good idea to visit your local library and talk to a few people who might know more technical information about filing for bankruptcy.
On the other hand, it might be a safer option to get in touch with a bankruptcy lawyer who can guide you through the complicated procedure of filing for bankruptcy. You will have to provide you bankruptcy lawyer with all your personal information in order to put together and file your voluntary petition. Once the documents are filed at the bankruptcy court, you will be assigned a trustee who will see to it that all the information that is needed is collected from you and that all the information provided is accurate. The next step would be to notify your creditors that you will be filing for bankruptcy so that they will have to stop all actions they might be taking up against you to get your payments.
The later procedures include meeting the various parties who are involved in your bankruptcy case, together with your creditors and if possible your creditors’ lawyers.
While all this is going on, also keep in mind that filing for bankruptcy is a long process which will require a lot of patience. For this reason, having an experienced lawyer might make sure that everything runs smoothly.
http://www.bankruptcyhome.com/filing-bankruptcy.htm
First of all, you should keep in mind that filing for bankruptcy is a legal process. For this reason, and for your own financial wellbeing, each decision that you make about bankruptcy should be well informed choices. That is to say, is this process something you want to take up on your own, or do you want a professional to help you? It is possible to file for bankruptcy on your own; however, it is a process that would take a lot of patience and diligence.
If you decide that you want to file for bankruptcy on your own, the first decision you have to make is which kind of bankruptcy you should file for: Chapter 7 or Chapter 13? Once again, these decisions cannot be made fast. So it would be a good idea to visit your local library and talk to a few people who might know more technical information about filing for bankruptcy.
On the other hand, it might be a safer option to get in touch with a bankruptcy lawyer who can guide you through the complicated procedure of filing for bankruptcy. You will have to provide you bankruptcy lawyer with all your personal information in order to put together and file your voluntary petition. Once the documents are filed at the bankruptcy court, you will be assigned a trustee who will see to it that all the information that is needed is collected from you and that all the information provided is accurate. The next step would be to notify your creditors that you will be filing for bankruptcy so that they will have to stop all actions they might be taking up against you to get your payments.
The later procedures include meeting the various parties who are involved in your bankruptcy case, together with your creditors and if possible your creditors’ lawyers.
While all this is going on, also keep in mind that filing for bankruptcy is a long process which will require a lot of patience. For this reason, having an experienced lawyer might make sure that everything runs smoothly.
http://www.bankruptcyhome.com/filing-bankruptcy.htm
How Did This Happen?
Dear Readers, Picture This:
Your spouse is out of job, the monthly income is halved and your family is left without health insurance. Just as you are managing somehow by slashing all unnecessary expenses your child is hospitalized for a tonsillectomy. Past-due bills are piling up, the number of calls from nasty creditors, and the letters threatening to foreclose on your mortgage, are on the rise too. You contact non-profit debt counseling services who manage to keep their promise of permanently lowering interest rates on some of your outstanding bills. But six months on, and having paid the sign-up charge and monthly fee of the agency, your debt only increases. The counseling services seems to have profited more.
Claim for help is hollow, and the promise to rescue, a scam. The combination of high household debt levels and major corporate layoffs in the past few years has led to a sudden increase in many organizations that depend on people falling for these claims.
But What About The Law?
Yes, the laws are all in place to safeguard fair practices and what not, but the rise of abusive practices is phenomenal even in the face of such laws. Such credit counseling agencies are typically small and offer services such as providing help with budgeting and management of debt. Individual cases determine future course of action, with some extreme cases even steered into bankruptcy, but a majority guided towards debt management programs.
"More recently," says Winston, "a new kind of agency has arisen." Instead of being locally-based, these agencies are national. And, he adds, "they pitch their services aggressively," advertising on television, in magazines and over the Internet.
According to Winston, self-promotion was traditionally not a practice of credit counselors, but the problem with such advertising is that oftentimes it is not truthful. It has been seen that the word “non-profit” misleads people into blindly believing such organizations, and their intent.
As a note of warning, he advises people in a financial crisis to be particularly wary of organizations, and have a clear understanding of the fee structure that they follow.
You need to ask the right questions about commissions, and be wary of any possible no tie up between the credit card company you owe money to, and the agency – this will obviously influence the advice you are given. You should know that, commission kicked back to the credit agency could range anywhere from 5 to 15 percent of the amount that is paid. Reduction of you debt in such a scenario need not be the primary goal of the credit counselor. There have even been cases where people were wrongly advised to stay away from bankruptcy, when it was the best option.
For your information, a legitimate credit counseling agency would be aware and sympathetic towards your financial crisis and charge you just enough to cover their expenses. That would be essential differentiator between a "non-profit" organization, and a non-profit organization. The good news for debtors is that there are organizations where based on individual cases all charges are waived off.
Is There A Way To Know?
Profit making non-profit organizations can be identified based on a few tip offs. Here are some.
* They charge a high fee.
* They guarantee to eliminate unsecured debt or promise that it can be paid off for pennies on the dollar.
* They advise to stop making payments to your creditors.
* They provide no guidance on how to avoid financial trouble in the future.
* They automatically pitch their (fee-based) re-payment plan without considering your case at length.
* They promise to clean up your credit report. (It takes 10 years to eliminate bankruptcy filing, and late payment and defaults stay on your record for 7 years.)
If you find out that you are a victim, have your contract scrutinized by a trusted advisor. Once confirmed, you should file a report with the local Better Business Bureau or your State’s Attorney General’s office. You can contact the Federal Trade Commission, which may not be able to fight your case since it’s a law enforcement agency, but broader action can be initiated based on complaints. There can, for example, be a move to shut down a company if many such complaints trickle in.
Attempts are being made to crack down on these unscrupulous credit counseling firms, but in the meanwhile be alert to such possibilities. Go to a company if you know someone who’s been there and got their problem resolved, or of course if you are certain that the history they boast of is for real. But the bottom line is, be aware and prepared to tackle any negative consequences.
http://www.bankruptcyhome.com/howdidthishappen.htm
Your spouse is out of job, the monthly income is halved and your family is left without health insurance. Just as you are managing somehow by slashing all unnecessary expenses your child is hospitalized for a tonsillectomy. Past-due bills are piling up, the number of calls from nasty creditors, and the letters threatening to foreclose on your mortgage, are on the rise too. You contact non-profit debt counseling services who manage to keep their promise of permanently lowering interest rates on some of your outstanding bills. But six months on, and having paid the sign-up charge and monthly fee of the agency, your debt only increases. The counseling services seems to have profited more.
Claim for help is hollow, and the promise to rescue, a scam. The combination of high household debt levels and major corporate layoffs in the past few years has led to a sudden increase in many organizations that depend on people falling for these claims.
But What About The Law?
Yes, the laws are all in place to safeguard fair practices and what not, but the rise of abusive practices is phenomenal even in the face of such laws. Such credit counseling agencies are typically small and offer services such as providing help with budgeting and management of debt. Individual cases determine future course of action, with some extreme cases even steered into bankruptcy, but a majority guided towards debt management programs.
"More recently," says Winston, "a new kind of agency has arisen." Instead of being locally-based, these agencies are national. And, he adds, "they pitch their services aggressively," advertising on television, in magazines and over the Internet.
According to Winston, self-promotion was traditionally not a practice of credit counselors, but the problem with such advertising is that oftentimes it is not truthful. It has been seen that the word “non-profit” misleads people into blindly believing such organizations, and their intent.
As a note of warning, he advises people in a financial crisis to be particularly wary of organizations, and have a clear understanding of the fee structure that they follow.
You need to ask the right questions about commissions, and be wary of any possible no tie up between the credit card company you owe money to, and the agency – this will obviously influence the advice you are given. You should know that, commission kicked back to the credit agency could range anywhere from 5 to 15 percent of the amount that is paid. Reduction of you debt in such a scenario need not be the primary goal of the credit counselor. There have even been cases where people were wrongly advised to stay away from bankruptcy, when it was the best option.
For your information, a legitimate credit counseling agency would be aware and sympathetic towards your financial crisis and charge you just enough to cover their expenses. That would be essential differentiator between a "non-profit" organization, and a non-profit organization. The good news for debtors is that there are organizations where based on individual cases all charges are waived off.
Is There A Way To Know?
Profit making non-profit organizations can be identified based on a few tip offs. Here are some.
* They charge a high fee.
* They guarantee to eliminate unsecured debt or promise that it can be paid off for pennies on the dollar.
* They advise to stop making payments to your creditors.
* They provide no guidance on how to avoid financial trouble in the future.
* They automatically pitch their (fee-based) re-payment plan without considering your case at length.
* They promise to clean up your credit report. (It takes 10 years to eliminate bankruptcy filing, and late payment and defaults stay on your record for 7 years.)
If you find out that you are a victim, have your contract scrutinized by a trusted advisor. Once confirmed, you should file a report with the local Better Business Bureau or your State’s Attorney General’s office. You can contact the Federal Trade Commission, which may not be able to fight your case since it’s a law enforcement agency, but broader action can be initiated based on complaints. There can, for example, be a move to shut down a company if many such complaints trickle in.
Attempts are being made to crack down on these unscrupulous credit counseling firms, but in the meanwhile be alert to such possibilities. Go to a company if you know someone who’s been there and got their problem resolved, or of course if you are certain that the history they boast of is for real. But the bottom line is, be aware and prepared to tackle any negative consequences.
http://www.bankruptcyhome.com/howdidthishappen.htm
Credit Woes
Imagine this: Over the years your debts have somehow piled up to an unmanageable level. And now amongst unpaid bills and dealing with angry creditors, you feel the only solution for you is to get some help to clean up the mess. That is all well and good, but where exactly do you go to find this help?
Now imagine this: tired of the growing debts and with no way out you decide to consult a ‘professional’. You go to a credit counsellor and let that person try to help you out of your debts only to find that they have put you in more trouble than you already were in when you started.
Needless to say, over the years because of changes in lifestyles and spending habits, many individuals have found themselves in a situation where they are too deep in debt. Unfortunately, at the same time there has also been an increase in the number of abusive practitioners who pose as credit counsellors only to make the situation much worse than it was in the beginning.
The traditional credit counselling agencies were small and local services whose main function was to lend a hand to consumers with guidance and education about budgeting and how to manage their debts. Each case is studied individually and depending on the individual consumer’s situation they will be directed towards debt management, or at the worst case, filing for bankruptcy.
However there has been a shift in the nature of these small agencies. For a start, a lot of them are not small anymore. Nor are they local. The trend in credit counselling agencies finds organizations that operate at a national level and adopt aggressive marketing strategies to break through to the public. It is not unusual to see these credit counselling agencies selling their pitch by advertising through television, magazines, radio and the internet.
When going to a credit counselling agency keep in mind that most genuine agencies of this kind offer their services at a minimal fee. This fee that is charges is usually just enough to cover their expenses, thus they make the grade at a ‘non profit’ business. It might only be natural for consumers to drop their guards when they are met with the word ‘non-profit’. But one has to be aware of the fact that not all these organization have your best interest in mind.
Experts suggest that people who are looking for assistance from credit counsellors should be cautious with the choices they make. It is important to understand the fee structure and look into the structure more deeply if they operate on the basis of percentages and commissions. You should understand points such as who pays the commissions, you or the credit card company. Also be sure to check out if the agency gets a kickback from the credit card company from the outstanding amount when it repaid, since that is something that is likely to have an effect on the way the agency works with you.
http://www.bankruptcyhome.com/creditwoes.htm
Now imagine this: tired of the growing debts and with no way out you decide to consult a ‘professional’. You go to a credit counsellor and let that person try to help you out of your debts only to find that they have put you in more trouble than you already were in when you started.
Needless to say, over the years because of changes in lifestyles and spending habits, many individuals have found themselves in a situation where they are too deep in debt. Unfortunately, at the same time there has also been an increase in the number of abusive practitioners who pose as credit counsellors only to make the situation much worse than it was in the beginning.
The traditional credit counselling agencies were small and local services whose main function was to lend a hand to consumers with guidance and education about budgeting and how to manage their debts. Each case is studied individually and depending on the individual consumer’s situation they will be directed towards debt management, or at the worst case, filing for bankruptcy.
However there has been a shift in the nature of these small agencies. For a start, a lot of them are not small anymore. Nor are they local. The trend in credit counselling agencies finds organizations that operate at a national level and adopt aggressive marketing strategies to break through to the public. It is not unusual to see these credit counselling agencies selling their pitch by advertising through television, magazines, radio and the internet.
When going to a credit counselling agency keep in mind that most genuine agencies of this kind offer their services at a minimal fee. This fee that is charges is usually just enough to cover their expenses, thus they make the grade at a ‘non profit’ business. It might only be natural for consumers to drop their guards when they are met with the word ‘non-profit’. But one has to be aware of the fact that not all these organization have your best interest in mind.
Experts suggest that people who are looking for assistance from credit counsellors should be cautious with the choices they make. It is important to understand the fee structure and look into the structure more deeply if they operate on the basis of percentages and commissions. You should understand points such as who pays the commissions, you or the credit card company. Also be sure to check out if the agency gets a kickback from the credit card company from the outstanding amount when it repaid, since that is something that is likely to have an effect on the way the agency works with you.
http://www.bankruptcyhome.com/creditwoes.htm
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