Bankruptcy? Don’t Get Messy With It.

Despite the serious short term and long-term effects associated with filing bankruptcy, the number of people filing bankruptcy lately has been on the increase. It is estimated that 5.4 people out of 1000 filed for bankruptcy last year and that this rate has been growing at an average of 7%. The alarming ease with which people file for bankruptcy is a growing cause of concern for governments and financial organizations.

What is Bankruptcy? The word, Bankruptcy, means 'broken bench', literally. In the past, during the early days of banking and trading, when a debtor could not pay off his debts, his workbench was broken into two as a punishment and also as a warning for other debtors. But in recent times, the term is now used as a legal tool to help an individual or business discharge its burden of debts without been swallowed up by it. It is now a legal term, meaning that an individual cannot, within reason, pay off his various debts and has allowed the court system to take over his finances for the purpose of easing off his debts.

Bankruptcy laws were enacted in order to protect both debtor, and creditor. The laws were enacted to provide equal and fair measures to satisfy the objectives of all parties. The primary purpose of the laws of bankruptcy can be split in two:

- To give an honest debtor a fresh start in life by relieving him most of his debts

- To repay creditors in an orderly manner to the extent that the debtor has property available for payment.

Several studies over the years have shown that the primary cause of personal bankruptcy is uncontrollable levels of consumer debt which in most cases is coupled with an unexpected event, such as a major medical expense not covered by insurance, the loss of a job, divorce or death of a spouse. According to economists' surveys, the classic bankruptcy filer is a blue collar, high school graduate who is the head of a household in the lower middle-income class with heavy use of credit.

Different types of bankruptcy exist in different localities and countries, defined by legal codes for certain purposes. The exact types of bankruptcy available differ from one country to the next, in the United Kingdom for example; bankruptcy can only legally be applied to individuals and partnerships, whereas in the United States and Canada, it can be applied to businesses as well.

There are two basic structured plans for filing personal bankruptcy, these are known as Chapter 7 and Chapter 13. The chapter 7 plan requires debtors to liquidate all non-exempt assets, such as retirement programs, and have them distributed among his creditors, while the Chapter 13 plan does not require liquidation. In this plan, the debtor concedes to a payment arrangement where a portion of his unsecured debts are paid and the balance forgiven. Most personal bankruptcy filers chose the chapter 7 option.

When filling for bankruptcy, you will need the services of a Bankruptcy lawyer, and getting an experienced lawyer who has handled cases similar to yours may be an important first step. When you have filed for bankruptcy, the court will normally appoint someone to work out the payments to your creditors and to determine how much of your income must go into repaying these debts. The court will either allow you to make payments, or more likely, will deduct a portion of your pay check toward this goal. And during this process one of the primary side effects is that your credit options will be very limited, due to both legal action and the reluctance of creditors to issue credit lines to individuals who have declared bankruptcy. Although, once the amount set by the court has been paid off, the bankruptcy will be cleared and you will be able to start rebuilding your credit from the start again. It may be years before creditors start trusting you after declaring bankruptcy. If you rebuild you credit well enough, it probably won't take too long, but certainly, for a couple of years you are not going to be credit worthy.

Because of the lasting effects of filing bankruptcy, it is advisable to only declare bankruptcy as a last resort. Try out every other alternative, talk to an experienced lawyer and see if there are options to be considered before declaring yourself or your business bankrupt. In most cases, there are always better alternatives to be considered.

- You could sell off some assets to clear your bills when you notice that you are getting financially trapped and may be running into trouble.

- Reduce your expenses and cut out all non-essential costs.

- Consult with a specialist, e.g. an accountant, maybe you could work out a plan to enable you gradually pay off your debts without been swallowed by it. A good budget, when strictly adhered to, could pull you out of a terrible situation in no time.

- You could also consider refinancing some assets and using the surplus to pay off your debts.

- You could also arrange something like a Creditors' pool. Here you will need to arrange with all your creditors to create a pool run by an accountant, where you pay a certain amount of money into the pool as arranged and the money is distributed to your creditors until your debts are paid.

If none of this works, then you could consider filing for voluntary bankruptcy to stop the situation from getting too bad. The bottom line is, don't jump into this mess called bankruptcy, until you have convinced yourself it is the only option left.

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Bankruptcy - Always Count Your Pennies

What is our main purpose in life? Is it to be happy or to be successful. For a lot of people, there is no difference between the two. We seem to define ourselves by what we own instead of who we are, as if success makes us better people. Some people go to such extremes to be successful, that they end up neglecting their marriage, their children and even their health. And for some people, illegal activity is worth the risk, it if brings them the success they want.

Even when people have success, it's not enough, now they need to show the world how successful they are. They do this by buying expensive homes, cars, clothes, etc. There's a lifestyle that goes with success and many of people try to project that style, even if they can't afford it. But no matter how successful people may get, they can't avoid the unexpected circumstances of life. People can get ill, have accidents or because of cut-backs, lose their jobs. Those types of situations can destroy the finances of most people. So, what are the options for when their income and unexpected circumstances will not allow them to continue to live a certain lifestyle?

Though people have a few avenues that maybe open to them, the process that many use to help fix their finances is bankruptcy. Bankruptcy is when individuals or an organization legally admits to not being able to pay their bills. Bankruptcy allows the people in debt a chance to get their bills in order, without going to the extreme of selling everything they own. During bankruptcy, some debts may no longer need to be paid; while a plan to pay other debts will be put into place.

Bankruptcy is nothing new. The first bankruptcy law was created in England in 1542. The first American bankruptcy law was passed in 1800. The American law was similar to the British law of 1705, with the exception being that there was no possibly of death, written into the American law. Congress re-worked the bankruptcy law in 1938; one of the changes that came from this was the creation of Chapter 13. Under Chapter 13, the people in debt would make regular payments to a trustee, who would in turn, pay off the people who were owed money. Chapter 13 was a big change, because in the past people would file under Chapter 7; and under Chapter 7, most people got away without having to pay-off any of their debts.

Bankruptcy can be a very important tool for people who've experienced an unexpected trauma in their life. Bankruptcy can help them get back on their feet financially. It can also help those people who chose to spend more money than they had, usually with the help of credit cards. Bankruptcy is not just for the individual. Many businesses have taken advantage of the bankruptcy law over the years. The bankruptcy law is there to help, but what individuals and businesses should consider, is trying to find a way to live their lives and run their businesses in a way to avoid bankruptcy.

http://bankruptcy-guide-to.com/a/324777/Bankruptcy+-+Always+Count+Your+Pennies.html

Bankruptcy – Getting Your Credit Back

Your bankruptcy case has gone through and you’re trying to put all of this behind you. You want to get a fresh start and not make the same mistakes again in the future. It’s time to start thinking about rebuilding your credit.

No matter what caused you to file bankruptcy, be it from doctor and hospital bills, a divorce, a loss of your job, or perhaps even your own foolishness, you’re going to have to start over again. You will need to prove to lenders that you are a good risk. This is going to take some time and effort on your part, but it can be done. Here are some good tips to help you get started rebuilding your credit after a bankruptcy.

Getting New Credit

Many people mistakenly believe that if will take 7 years after your bankruptcy before you can ever get any kind of a loan or credit card again. This is completely false. Did you know that many people come out of a bankruptcy with higher credit scores than they ever had in their financial life?

There is no real big secret to this. These people began paying their bills on time again. And they did it consistently month after month. To help begin rebuilding your credit you should consider getting one credit card as quickly as possible, even if it is a pre-deposit credit card. Many credit card companies will give you a credit card after a bankruptcy. You just need to do some searching.

Then make a few small charges to it, and pay it off every month. Do not carry a forwarding balance. Simply pay it off every month. This will help rebuild your credit faster than anything else you can do after a bankruptcy. It shows lenders that they can trust you again. Then slowly begin building up to higher purchases and pay those off in a couple of months. Never only make a minimum monthly payment.

Pick Your Debts

Get a credit card to use at your local gas station or grocery store. Then begin using it instead of paying cash. Take the cash to cover these purchases, and sit it aside. At the end of the month take the cash and pay off the credit card statement. This will go even further towards rebuilding your credit after your bankruptcy.

By following these steps you’re going to be in a position of being able to finance a new car or home within a couple of years. You first just have to show you can be trusted to pay off your debts every month. Then you’re showing you’re responsible and you’ll be able to make bigger purchases.

Insurance

Most all credit card companies offer insurance to cover your monthly payments in the event you lose your job. Be sure you take advantage of this insurance. If something unexpected does occur, then you’re covered. Don’t take any unnecessary chances with your financial future. You don’t want to put yourself in the same situation as you did before. The cost of this insurance is very low.

http://bankruptcy-guide-to.com/a/332328/Bankruptcy+%e2%80%93+Getting+Your+Credit+Back.html

Bankruptcy – Is It The Right Choice?

If you’re facing a mountain of debt that just continues to keep growing, bankruptcy may seem to be the only way out. You’re not alone. Hundreds of thousands of Americans face this situation every year. Filing for bankruptcy may seem like an easy solution to your problems, but is it really the right choice?

Did you know that a bankruptcy will show up on your credit report for 10 years? This will make getting any type of loan, credit card, or a home mortgage, next to impossible. Sure, there may be a few lenders who will extend you credit after a few years, but only after jumping through hoops and paying a very high interest rate. Another aspect to consider before filing for a bankruptcy is that some of your possessions may actually be repossessed. When the bank finds anything of value that is not considered a necessity, it may seize the items to pay off your debts.

You should also keep in mind that not all debts are canceled by filing a bankruptcy. If you owe taxes to the IRS, past due child support, alimony, or any court judgments, you will still have to pay these off. They are not erased with a bankruptcy.

Filing for bankruptcy should be avoided if at all possible. In addition to future credit restrictions, filing a bankruptcy will even prevent you from holding some various jobs in the workplace. You can’t be an accountant, or hold a magistrate position.

The only real advantage of filing a bankruptcy is that the phone calls at all times of the day and night will stop. Your debts will be written off when your bankruptcy is discharged. You’ll have peace of mind once again.

Instead of only considering filing for bankruptcy to get out from under all the debt you’ve incurred, think about trying debt consolidation. Debt consolidation companies will help you to manage your bills. They have the ability to put some programs in place to help you. They can contact your creditors and make special payment arrangements, new loans, lower interest rates, extended loan periods, etc. Many times this can help prevent you from having to file for bankruptcy. The debt consolidator will make the payments to your creditors and handle everything. All you do is make one monthly payment to the debt consolidation company.

With the recent bankruptcy reform law, filing for a Chapter 7 bankruptcy is next to impossible. A Chapter 7 filing lets you keep your home and property, but discharges all of your debts. Chapter 13 is a re-organization of your debts that you pay off in 3-5 years. Most all filings are now forced into a Chapter 13.

The new law also makes it mandatory for you to meet with a credit counselor before filing for bankruptcy. You must meet with them for at least 6 months. Because of this new law, there is a shortage of credit counselors, forcing you to wait until you can find one before you can begin filing your bankruptcy. You must also attend a money management course, at your own expense.

It is always a good idea to speak with an attorney who specializes in bankruptcy law before making a decision to file. By knowing all of your options, and doing some research, you may very well find a solution to getting out of debt without having to file for bankruptcy.

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Bankruptcy Facts You Must Know

Over the years, filing for bankruptcy has become almost as easy as applying for a credit card. The last 10 years have seen the number of bankruptcies double in size. The massive increase in bankruptcy filings also got the attention of our government. As a result, new laws were passed and went into effect in October 2005. These new laws have made it much tougher for individuals and businesses to file for bankruptcy.

This new law has also caused quite a stir among those trying to file for bankruptcy, and those who handle the cases. The restrictions on being to qualify to file a Chapter 7 bankruptcy have been severely tightened, and the Chapter 13 law has also been stiffened.

Some of the many changes to the bankruptcy law include:

· Credit counseling for 6 months prior to filing for a bankruptcy. · A debtor must have filed tax returns for the previous 4 years in a row before being able to file for a bankruptcy. · You must be able to prove with a good reason why the courts should take away your personal debts. This has forced more people to pay off their debts that previously would have been taken away by a bankruptcy in the old system. · Paying off a Chapter 13 bankruptcy within 3-5 years

Chapter 13 Bankruptcy

A Chapter 13 filing allows the debtor to keep some of their assets and reorganize their finances to pay the debts off. You must have a steady income in order to qualify. The court will set up a repayment schedule, and determine for you what your payment amounts will be. This type of bankruptcy filing is good for those people who have gotten into financial trouble, but still have a steady income and a means to pay off some of their debts.

Chapter 7 Bankruptcy

When someone has no means to pay off their debts they can file a Chapter 7 bankruptcy. This means that the court will completely liquidate your assets. In most cases though, you are allowed to keep your home, car, and other living necessities. Filing a Chapter 7 bankruptcy has become extremely difficult with the enactment of the new bankruptcy reform law. You will definitely need the advice of a qualified attorney prior to filing.

Something you need to keep in mind with either form of bankruptcy filing is that certain debts are not allowed to be included. You will still have to continue to pay off these debts completely. They include: · Unpaid Federal, State, or local taxes · Past due child support · Alimony · Student loans · Court related costs

Another factor to keep in mind is that any bankruptcy filing will remain on your credit report for 10 years. This can make getting any type of credit card, car or home loan, or credit of any kind, extremely tough. While you may still be able to find loans for a car or home, the interest and added fees will be very high. Keep these facts in mind when considering filing for any form of bankruptcy. Consider other possibilities and talk to credit professionals. You may find a way out of your financial trouble without having to file a bankruptcy.

http://bankruptcy-guide-to.com/a/332957/Bankruptcy+Facts+You+Must+Know.html

Bankruptcy - The Dreaded Word!

Bankruptcy - the dreaded word! Unfortunately, in today's fast-paced, materialistic society, this legal procedure is being pursued at an alarming rate. Bankruptcy law firms, credit counseling services and even do-it-yourself bankruptcy kits are advertised everywhere.

No one in their right mind wants to file for bankruptcy, but in the end this procedure could be the best decision they can make for themselves and their family. Depending on the type of bankruptcy chosen - Chapter 13 or Chapter 7 - one may be able to keep everything they own and begin a new financial life.

Let's look at the first type - Chapter 13. Chapter 13 involves a list of all creditors, both secured and unsecured. By secured debt, we mean debt that is secured by property - one's home, car, etc. Unsecured debt is just what the term implies - unsecured. These debts would include credit cards, personal loans, etc. Under a Chapter 13 petition to the court, usually secured debt is left as is, in other words will be included in the plan to be paid in full. Unsecured debt will be dealt with by petitions from each creditor to the court. The court will make the final determination as to how much of each debt will be paid. Once these amounts are determined by the lawyers involved, a 1, 3, or 5 year plan is developed to help the debtor pay down the debts owed. Chapter 13 bankruptcy is normally recommended for those who are about to lose their home to foreclosure. Many times, unsecured creditors will not even show up at the required creditor petition meetings and will, therefore, forfeit all debt owed to them.

Chapter 7 bankruptcy is handled in a different manner altogether. This type of bankruptcy allows one to keep property already paid for. In some cases, if foreclosure is imminent, one may be able to keep one's home while, in return, give up other assets such as automobiles, possibly furniture or other property that is considered secured debt. Chapter 7 bankruptcies may seem extremely harsh, but remember, one will be able to start over with a clean slate.

Both chapters of bankruptcy require a lot of paper gathering. If one uses a bankruptcy lawyer, a package is usually provided in order to provide the lawyer with all required information needed to file the petition to the court. This information consists of all personal data about oneself such as address, phone, social security number, work information, wages earned, etc. Plus the firm needs a list of all creditors. Please remember, leaving even one creditor off this list can mean the judge may dismiss the case outright! Do not LIE!

There are self bankruptcy kits available online and off for one to use if one so desires. They are quite inexpensive, but may require more work than one would like to do by oneself. Therefore, a good lawyer specializing in bankruptcy law is highly recommended.

Bankruptcy should be avoided at all costs, but if all else fails, it is an option. One should probably consult a good credit counseling service first before pursuing the dreaded bankruptcy route. If you chooses this route, use a service that is non-profit such as the Red Cross or other non-profit organizations. Please be aware, there are many credit counseling scams out there.

To conclude, bankruptcy can relieve a lot of stress and can be a fresh start for anyone suffering from heavy debt. But, please use it only as a last resort when everything else fails. Plus, once bankruptcy has been incurred and discharged, use caution when re-establishing credit so you does not have to repeat this process again down the road.

http://bankruptcy-guide-to.com/a/333514/Bankruptcy+-+The+Dreaded+Word!.html