Just Say NO To Filing Bankruptcy

Many people are facing the possibility of filing for bankruptcy. Sadly, many people who are in this position have been given bad or poorly explained credit advice and are wondering if there are any other alternatives to going down the bankruptcy road. There are options available to keep your good name and pay your debts.

Should I avoid Bankruptcy?

To begin with, filing for bankruptcy is a personal decision and one that can only be made by the individual in debt. Although only the individual can make this decision, there are people or companies out there that will discuss options and help debtors come to an educated decision whether to file for bankruptcy or to avoid it. A non-profit organization is the best avenue. Beware of companies charging outrageous fees for their services, as often they are only interested in making money from those in dire financial straits.

Often creditors harass those who are facing financial ruin to make their payments, this is because that is the only weapon they have. These threats can further add to a debtor’s confusion and stress. There are some simple things to keep in mind about debtors and who you should be paying first and who can wait. Make a priority list of the debts you should be concentrating on. Depending on your situation, if you want to keep your home and main vehicle, than you should concentrate on these two debts over your credit card or medical bills.

There is a good reason for choosing to pay other bills over medical and credit card debts. In order to take property from a debtor in the form of assets or possessions, these creditors must first take a debtor to court before they can take their property or possessions. Debts such as fines, alimony, child support, income taxes and student loans on the other hand don’t need to go through this process. By filing for bankruptcy it is likely these debts will still remain.

Trying to get creditors to give you a break should not be the deciding factor in choosing to go down the bankruptcy road. Even though this approach may bring temporary relief from lawsuits and arguments with creditors, bankruptcy is only a short tem solution. Once bankruptcy has been filed the person will be no better off than they were before. In hindsight, by avoiding bankruptcy, a person can sort out their affairs and come out a little better off than if they had chosen to file for bankruptcy.

Debt Management, How can I avoid Bankruptcy?

One of the first methods that should be used when trying to manage debt is to contact the people that you owe money to, for instance, financial institutions and credit card departments. Explain your current situation to them and see if an arrangement can be made to reduce your payments or waive late fees until you have caught up on payments.

If this fails, don’t be afraid to use the power of a good threat. Write letters to all of the creditors that money is owed to and tell them that you are likely to have to file for bankruptcy. Often the companies will try to work something out with their debtors or take less money than go to the trouble of taking debtors to court or having the debt completely wiped out during bankruptcy.

Is A Consumer Credit Counseling Service The Answer For You?

Another way to avoid bankruptcy and work on better debt management is to find a good Consumer Credit Counseling Service. This service will usually be a non-profit organization that will work with you and your creditors to find a solution or a better payment plan that will suit your finances.

Keep in mind the CCC is good for quieting your creditors, removing late fees, and lowering interest payments. If you have an old debt that hasn't been collected on for a while, you might want to contact an aggressive debt consolidation company. They maybe able to negotiate as much as 60% off your original debt.

By consolidating your debts into one loan you can reduce the number of creditors and fees that you will be responsible for. Be aware of the consolidation loan policies on transferring money from other sources to the loan, as this can sometimes be costly. Often it is possible to borrow against your home to pay debts in this manner, although this can be risky at times as you may face loosing your home if you can’t make the payments.

The other option that you may be able to exercise is to sell off your assets that have value and pay that amount off on your debts. This may seem like a difficult option, although, if you are filing for bankruptcy, it is likely you could loose all of your assets anyway.

Bankruptcy is a process that is best avoided. If a debtor does decide to file for bankruptcy, it should be because they are left with no other option. The debtor should also be aware of the debts that cannot be wiped out by the bankruptcy process, even then a debtor seeks the help of a Credit Counseling Service before proceeding.

About the Author

Copyright notice: Badcreditresources.com 2006,
Badcreditresources.com is a directory of banks and financial institutions that will provide credit cards and loans to people with bad credit . We also provide useful information & resources to people trying to repair their credit.Looking for bad credit loans? click here.

Will You Have to Pay Back the Debt Anyway?

The most widely held misconception about bankruptcy is that it’s the debtor’s version of the “get out of jail free” card in Monopoly. While most people know that bankruptcy affects your credit for 7 to 10 years, very few people know that it’s possible that you’ll have to pay back the debt anyway, even if you file a Chapter 7 “straight” bankruptcy. The formal definition of bankruptcy is “a proceeding in federal court in which an insolvent debtor’s assets are liquidated and the debtor is relieved of further liability.” On the other hand, the commonplace definition of bankruptcy is probably “the process of completely wiping out your debts for free.” In the majority of cases, the latter definition may be appropriate, but in some scenarios, it’s likely that even with bankruptcy, you’ll still have to pay back at least a portion of the debt.

So when is it likely that you’ll have to pay back your debts? Here are the most common scenarios when you’ll get all the negatives of filing bankruptcy (severe credit impact for 7 to 10 years), but none of the benefits (you’ll still have to pay back at least part of the debt):

1) You make more than the average person in your state. If this is the case, then it’s likely that you’ll be forced into a Chapter 13 bankruptcy plan. In a Chapter 13 bankruptcy, the court orders that you pay all your disposable income to a court appointed trustee, who in turn disburses payments to your creditors. Keep in mind that the court determines your disposable income by national and county statistics on average necessary expenses, not what you’re paying. So just because you’re paying a lot for a car doesn’t mean the court will approve it. There are numerous cases when a judge ordered families to stop sending their children to private schools so they can have more money to pay back their creditors. In Illinois, here are the latest statistics on the Illinois median income by size of household:
Illinois Estimate
1-person families 41,650
2-person families 52,891
3-person families 62,176
4-person families 72,368
2) You have assets. If you own a home or car, then it’s possible that the bankruptcy court will force you to sell them to generate sufficient cash to pay back your creditors. Chances are if have a good chunk of change invested (unless it’s in a tax-exempt account like an IRA) then you’ll also be forced to liquidate it. If you have a second home or another vehicle (assuming you own both completely), then you’re really out of luck. Fortunately, there are some safeguards to protect consumers from bankruptcy hell. In Illinois, every resident is entitled to at least $7,500 of the value of their home, $1200 of the value of their vehicle, and $2,000 for anything that they want (known as the wildcard exemption). Also, these values double if you’re married (assuming the property is in both of your names).

What does this actually mean? Consider the following example.

Let’s say you have a house that’s worth $250,000, and it’s in both yours and your wife’s name. You still owe about $200,000 on your mortgage, and you decided to file Chapter 7 bankruptcy. In this example, you would be forced to sell your home, and with the proceeds you would pay back the mortgage company what you owe on the outstanding balance of the loan ($200,000), you’d pay yourself the Illinois real estate exemption ($15,000), and then you’d pay back your other creditors whatever was left ($250K-200K-15K=$35,000).

Let say your house was only worth $215,000, but everything else in the above example remained the same. In this case, you wouldn’t be forced to sell your home because the proceeds from the sale wouldn’t amount to anything after you paid back the mortgage company and then paid back yourself the Illinois real estate exemption.

3) The creditors can prove that you were fraudulent and never had any intention of paying them back.

For the majority of us it means that unless a) you don’t have a lot of equity in any of your property, b) you don’t have any investments like stocks, real estate, ect., c) you don’t care about having to sell anything mentioned in points a and b, or d) you don’t care about having to give up your disposable for 5 years in a Chapter 13, then bankruptcy may not be your best option.

About the Author

Robert Zangrilli is the CEO of Franklin Debt Relief, LLC in Chicago, Illinois. FDR's "New Deal" program helps consumers avoid bankruptcy. FDR is a leading provider of bankruptcy alternatives.

Refinance Your Mortgage Loan After Bankruptcy

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Refinance Your Mortgage Loan After Bankruptcy
Submitted by bryquin


Though it may seem impossible, refinancing your home loan after going through bankruptcy is feasible as long as you can meet certain requirements. Finding the right lender is however, a challenging task.

Refinancing After Bankruptcy is Possible

Refinancing a home mortgage is probably one of the few financial transactions that someone who has gone through bankruptcy can achieve within a small period of time after the bankruptcy has been discharged. Since a mortgage loan is secured by an asset, the usually extremely low credit score bared by someone with a bankruptcy in his credit report isn’t that detrimental.

Raising your Credit Score

Moreover, refinancing a home loan is an excellent opportunity to raise your credit score and improve credit history. The monthly payments you make will be recorded into your credit report and this will contribute to a continuous increment on your credit rank.

However, since you won’t be able to apply for a refinance home loan till six months after your bankruptcy has been discharged. You need to work hard during this period in order to build a good credit history so as to make sure you get approved for your refinance home loan.

Getting Ready for Applying

In order to do so, you need to make all your payments on time including your current home loan installments. This is essential since any late payments or missed payments may be an obstacle between you and your refinance home loan.

If you haven’t done so yet, open a bank account, either a checking or savings account and get a credit card. If you can’t get approved for an unsecured credit card, don’t hesitate, apply for a secured credit card and start using it and making regular payments. All this will help you build a healthy credit history and will ensure you get approved for a refinance loan.

Search for a Lender and ask for Loan Quotes

The search for a suitable lender is the main task you need to complete. You can refinance with the same lender that is currently handling your home loan, but don’t stick to the first offer you receive. Request loan quotes with every lender you run into and even request online quotes as you’ll be able to get much better deals this way.

Pay attention to Interest Rates and other fees

You need to pay special attention not only to the interest rate and fees charged by the lender that will refinance your home loan, but also to any punitive fees that your current mortgage loan lender may charge for pre-cancellation of your loan. These fees and costs may turn refinance too onerous to even consider the possibility.

You may have to pay a slightly higher interest rate since you’ve got a bankruptcy on your credit report, however, don’t let lenders take advantage of this situation. This kind of loan is secured by collateral so there is no reason to charge high interest rates, no matter how low your credit score is.

About the Author

Bryan Quinn is a financial advisor with more than thirty years of experience in the field of finance who aids people undergoing financial problems and helps them obtain personal loans, home loans, student loans and grants, consolidation loans, car loans and many other financial products regardless of their credit situation. For more smart tips on Bankruptcy and Mortgage Loans you can visit www.badcreditloanservices.com and also learn more about other financial options.

The Hidden Cost of Bankruptcy

Bankruptcy is a contentious word for a whole number of reasons. Firstly it relates to a situation whereby a Debtor not being able to satisfy or compound to his Creditors a suitable amount has to turn to the Courts for protection and at the end of the day everyone loses out.

Let me repeat this last fact lest it passes some by. In a Bankruptcy situation no one wins. It is a “lose-lose” scenario. The Debtors by and large lose almost everything he or she owns (unless they are very carefully advised) and the Creditors by and large lose their money because when the Courts, Bankruptcy Trustees etc take their cut there is usually only a dividend of mere pence in the pound at the end of the day.

I hope all petitioning solicitors and lawyers read this with care as they are the ones who are advising all of their clients to sue people for bankruptcy. It is a bit like loading up pistols left right and centre for a “Russian Roulette Fest” it gets nobody anywhere.

In fact having read the last paragraph in more detail I take back my comment about Bankruptcy being a lose-lose situation it’s not, the Lawyers and Accountants make a fortune out of their fees, no one else does.

But there is a hidden cost to all of this that no one is prepared to acknowledge and this includes the knock on cost of ill health brought about by the stress of Bankruptcy. It is the “sleeping elephant” (for want of a more suitable metaphor) in the corner of the room that no one wants to acknowledge but it is certainly there all the same.

Let us analyse part of that “ill health” that we referred to above and that is the area of High Blood Pressure. It is one of the few natural growth phenomena of the late 20th and 21st Centuries and now is assuming almost epidemic proportions. The stress and elevated blood pressure brought about by the comings and goings of bankruptcy and all of the shenanigans that ensue can be lethal and in some cases lead to fatal consequences.

Our Society is so powered by the worship of all things financial that in the “heated blood lust of debt recovery” we seldom stop to consider the hidden human cost to all of this. I have client who as well as his business career being well and truly finished (boy was he badly advised earlier on but that is another issue) but his health, or should I say ill-health, is such now that any job prospects he might have had are now well and truly finished.

Now let us consider who well and truly gains by any of this? The answer? No one and if I can make just one final point it is a plea to any Solicitors and Lawyers who may, just may be reading this article. When you advise clients to pursue matters to Bankruptcy, get your background research carried out properly, do your due diligence well and get it right because at the end of the day as well as well and truly losing the majority of your clients money (which statistics point out is most certainly the case) you also damage the health of the person at the end of the writ.

Do you know the sad thing abut the whole side of this? I bet there is not a Solicitor or Layer who really cares, as long as they get their bonus and their fees, who gives a damn about anybody else?

About the Author

Stephen Morgan writes about Financial and Health Matters
for a number of web sites and more information on the above can be found at
Cost
of Filing Bankruptcy and also at

http://www.livingwithhighbloodpressure.net/cause-of-high-blood-pressure.html

Debt Consolidation or Debt Settlement?

We are a country in debt. Bankruptcies are at a record high. Consumers these days are searching for a way out. There are several options. One is a debt consolidation loan. There are many debt consolidation programs out there that can help you if that is the route you choose to follow. A debt consolidation loan is simply adding all your unsecured debts together and making one payment to pay them off. These are most often used for credit card debt consolidation. One thing you need to remember with debt consolidation is that you still owe the same amount of money. Its just a way of perhaps paying a smaller interest amount on the total.

Credit card use is at a record high. People’s credit card balances are through the roof. Our economy has been slow, so many people have been using their credit cards not for luxuries but for food and utility bills. This is a situation that can be dangerous for the average person. When you are only paying the minimum payment on your balance each month, you will never pay the balance off.

This is where debt settlement comes in. When you use a debt settlement service, you are negotiating with your creditors for a smaller payoff balance. The debt settlement company negotiating that is. You pay them a fee for their services. They in turn try to get your companies to settle with you for sometimes pennies on the dollar. This allows you to pay off the smaller balances and get out of debt. There is a steep price to pay on your credit report however. It will be noted that you did not pay as agreed and this will affect your credit score. It is a better alternative to bankruptcy however.

Bankruptcy should only be a last resort. It is reserved for those with crushing amounts of debt and no ability to pay them. There have also been many changes in the bankruptcy laws which you should become very familiar with should you decide to look into bankruptcy as a resolution.

There are several routes that one can take when looking to resolve debt issues. They are: debt consolidation, debt settlement and bankruptcy. You should use caution when taking out an equity loan on your home because you are essentially trading unsecured debt for secured debt and if you are unable to make the payments, you could lose your home. Debt consolidation will have the least negative impact on your credit score and should be the first option you look into

About the Author

http://www.jenniecrawford.com/debtfreein3

Advice when Choosing a Bankruptcy Lawyer

1. First and foremost, ask yourself, “Do I even need a bankruptcy lawyer to file my case?” If your case is fairly straightforward, then chances are you can get a bankruptcy petition preparer to file your case for much less than the cost of hiring a lawyer. Despite popular conception, bankruptcy law is not very complicated, so hiring an expert most of the times does not make sense. The real question then becomes, “How complicated is my case?” In short, if a) you have 100 percent unsecured debt (credit cards, medical bills, personal loans, repossessions, etc.); b) you’re unemployed with no assets (car, home, brokerage accounts, etc.) and c) you did not accumulate the debt very recently or in any way that can be construed as fraudulent (i.e. buying a big screen TV on a credit card a month before you filed) then you may not need a bankruptcy lawyer to file your case.

2. If your case is more complicated, then will you receive the sort of personal attention that you deserve in order to have your case properly handled? A lot of bankruptcy firms are devoted to basic filings, and you will receive little to no attention from your actual lawyer. With this much at stake, it’s important that you deal directly with a professional that is an expert in bankruptcy law.

3. Get a referral. If you know someone who has filed bankruptcy, don’t be afraid to ask them whether they felt their lawyer handled their case well. If you don’t know anyone who has filed bankruptcy before, then call a law firm outside of your area and ask for a referral from them.

4. Shop around. Most bankruptcy lawyers will at least offer a free initial consultation. Find a lawyer that you feel comfortable discussing your personal matters with and who offers a competitive rate for their fees. Remember not to compromise quality and experience just because a bankruptcy lawyer offers lower fees, however. Contact your state’s Attorney General office for a suggested list of bankruptcy lawyers in your area.

About the Author

Robert Zangrilli is the CEO of Franklin Debt Relief. FDR's "New Deal" program is a leading bankruptcy alternative for consumers with overwhelming consumer debt. Visit Franklin Debt Relief's website for tips on how to avoid bankruptcy.

Source: ArticleTrader.com

Getting Back On Track After Bankruptcy

Getting Back On Track After Bankruptcy

You have, overall, had good credit. However, even though you live in a small home, the area has become more and more desirable, things are getting more expensive, your taxes have been going up, you have three children, and your spouse has just been laid off from work.

You have got a god job, but it isn’t enough to be able to support you and your family. Thus, you have had to declare bankruptcy. Looking to the future and as a forward thinker, you need to start working out how to get back on track after bankruptcy.

The Changes You Can Make After Bankruptcy

You can really recover well financially after bankruptcy. There are many programs available, depending on your living situation, where you can be assisted financially after bankruptcy.

First of all, you need to consider the job that you have and how close to the minimum wage you are. For example, if you are making the minimum wage or just above, then the chances of getting help after bankruptcy are better.

Afterwards, you need to think of what type of job you have and what benefits you already receive. You now support a family of five (you included), so straight away the fact that your family is large will help you out. If you have a job working for the city, look into what help may be available for city workers, has anyone you know been in your situation?

Next, you’ll have to consider when your spouse if your spouse is returning to work. If they left because of a disability suffered while on the job then she/he may be entitled to getting financial reimbursement, this could help tremendously after bankruptcy.

Bankruptcy can be very stressful, so the most important thing would be to keep the situation away from the children. If they are attending a preschool or daycare, make sure you talk to the people who run it, to see if they can arrange a payment plan, because you should try not to disrupt the children’s schedule.

Remember it might take time to get your finance back on track after bankruptcy, but be sure to ask your friends and family for any advice they may have. Also, do your research for plans that you might think are applicable to your situation, start with the internet. With good research, you are sure to recover

About the Author

Andrew Manifield is the owner of On Bankruptcy, he gives information on all aspects of Bankruptcy at his site - Please Visit Today.

Source: ArticleTrader.com

Bankruptcy And Buying A Home

Filing bankruptcy is a stressful time in a person's life. Along with discharging your debts and gaining a fresh start, you may wonder if you will be able to buy a home after a bankruptcy. The answer is yes! Mortgage companies and online lenders are now offering home loans for those who have a bankruptcy on their credit report. Some lenders will even approve your loan as soon as one day after your bankruptcy has been discharged.

Buying a home after bankruptcy is no longer impossible. There are many reasons a person chooses to file bankruptcy. The loss of a job, unexpected medical bills, and overwhelming credit card debt are just a few of the factors that can lead to filing bankruptcy. The mortgage lending industry has created special loan packages and terms for those who have filed bankruptcy in the past. Lenders have little to lose in approving a home loan after bankruptcy. With your home serving as collateral for the loan, the lender can feel confident in approving you for a home loan, often soon after your bankruptcy has been discharged.

Filing bankruptcy and buying a home are no longer mutually exclusive terms. Both traditional and online lenders can give you a good interest rate and payments you can afford, even after filing bankruptcy. If you have filed Chapter 11 or Chapter 7 bankruptcy and are wondering if you can obtain a home loan, contact a lender today who specializes in approving mortgages after bankruptcy. Interest rates are currently lower that they have been in decades. Even after filing bankruptcy you can get your new home loan approved and receive a great interest rate. Online lenders and mortgage companies are competing for your business. Do not let a past bankruptcy prevent you from purchasing the new home of your dreams.

If you have filed bankruptcy in the past and would like to purchase a home, there are numerous programs and loan products that will suit your needs. Lenders will approve your loan quickly and give you excellent terms on your mortgage. Some lenders will require that a certain amount of time pass before approving a new home loan after a bankruptcy while other lenders can approve your loan in a little as one day after your bankruptcy has been discharged. Now is the perfect time to apply for a mortgage, even if you have filed for bankruptcy in the past.

About the Author

To see a list of recommended bad credit mortgage loan companies online, visit this page: www.abcloanguide.com/lessthanperfectcredit.shtml.Carrie Reeder is the owner of ABC Loan Guide. It is an informational loan website, with informative articles and the latest finance news.

Source: ArticleTrader.com

You should only declare bankruptcy if you absolutely have to

Bankruptcy is something that you should try to avoid unless it is absolutely necessary. There are several ways that you can determine whether or not you need to declare bankruptcy. Essentially, this is the best choice for you if you do not have a better way to pay off any of your bills, and if you do not think it is possible for you to ever get out of the debts that you owe.

If this is the case, then bankruptcy is a way to avoid paying more than you can afford, and it will allow you to take a fresh start, although you won’t have very much money at all. There are a few things that you’ll be able to keep even though you declare bankruptcy, and these are generally personal belongings that are not worth any real monetary value. If you are wondering which items are exempted where you live, then you should read through the bankruptcy rules and regulations regarding your state or country.

However, if you can possibly avoid bankruptcy, then you should. One reason for this is that even though bankruptcy can help you start over and get rid of most of your debt, it is still not very good for your credit rating. In fact, declaring bankruptcy can give you a very bad credit rating for years to come.

Luckily, there are a few different things that you can do in order to avoid bankruptcy. One thing that is used by many people every day is debt consolidation. Essentially, debt consolidation allows you to contact all of your creditors and ask them to make your monthly payments and interest rates easier to deal with. The reason that this works is that your creditors would much rather alleviate part of your debt and get most of the money they are owed.

Consolidating and paying your debts is also good for your credit rating. Instead of hurting it, paying off your debts will actually help your credit rating, since every time you pay your debts, it improves. Therefore, debt consolidation and other payment strategies are very preferable to declaring bankruptcy.

About the Author

Jakob Jelling is the founder of http://www.cashbazar.comVisit his website for the latest on personal finance, debt elimination, budgeting, credit cards and real estate.

Source: ArticleTrader.com

How to avoid bankruptcy

Here you will find everything you need to know about bankruptcy and debt reduction which will enable you to decide if it's the best option for you.

Bankruptcy is a legal way to offer folks with high interest debt a fresh financial start in life. In case you are considering personal bankruptcy as an answer to your debt problems, you are not alone. Bankruptcy is on the up and up as consumer debt explodes. Additional reasons for turning to bankruptcy for credit card debt alleviation include medical costs and job loss.

The two main types of bankruptcy are Chapter 7 and Chapter 13. Chapter thirteen is generally preferable for most people as it allows the defaulter to hold at least some property. It is imperative to understand that a bankruptcy does not remove all your debts overnight. Alimony, income taxes, child financial support and student loans are not exempt from bankruptcy proceedings.

Many people think that filing bankruptcy is an easy way to solve all their debt and credit related problems. Filing bankruptcy is the worst thing you can do as far as your credit is concerned and it is best to learn how to avoid bankruptcy. A bankruptcy will remain on your credit report for 5 to 10 years. The new bankruptcy laws require that individuals contemplating bankruptcy take a financial counseling course which is a positive thing. Many find that bankruptcy is not actually the best option for them. Make sure you have all the facts and consider all the alternatives before making a decision that can have far reaching effects.

Most people believe that filing for bankruptcy is a straightforward method to completely eliminate their debt and credit associated issues. Filing personal bankruptcy is in all probability the worst possible thing you will do where your credit is concerned. A bankruptcy appears on your credit report for up to five or even ten years.

The recent bankruptcy act necessitate that individuals contemplating bankruptcy enroll in a financial advice course which is a really good thing. Most will then recognize that bankruptcy is not really the preferable alternative for them at all. Be in no doubt that you need to be in possession of all the facts and consider all of the choices available prior to making at a choice that might have a detrimental effect on your future credit. http://bankruptcyadvisor.info

About the Author

c) Noel Hynes, 2005. Reprint rights granted to copy and publish this article as long as the article and by-line are reprinted intact.http://bankruptcyadvisor.info

Source: ArticleTrader.com