Bankruptcy - Clearing Your Credit Record

Bankruptcies can remain on your credit file for 7 to 10 years. Does that information get cleaned up automatically, or do you, as a consumer, need to do something? Well, as in everything else in life, if you want the job done correctly, you will need to do it yourself. Yes, it should clear up automatically. But, don’t trust this important step to fate! Don’t pay anyone to do this! You can easily save yourself money and do it yourself! Agencies that offer to “clean up your credit record” for you will simply be following these steps:

You want to clear a bankruptcy off your record, as it could affect your future credit, trying to purchase a home or car, obtaining life insurance, and sometimes even applying for a job. Even creditors who may claim that they will loan money to individuals with a known history of bad credit or bankruptcy may do so at higher rates than others deemed as better credit risks.

There are three things you can do to make sure your credit report is cleared properly: reports, notifications, and waiting. The first step is to obtain a copy of your current credit report. This will provide you with the most current data plus details on all of your debtors. It is very important to review this for accuracy by checking the names of the creditors, the account numbers, etc. In this world of human error there is every chance of something invalid being on the report. Everyone, regardless of credit history, can get a free credit report at annualcreditreport.com. What is pretty funny is that there is a website called freecreditreport.com, where they will charge a nominal fee for the same information! So don’t be fooled.

Pull together some information to send to the three major credit reporting agencies: Experian, Transunion, and Equifax. Never send the originals of this information, only copies. Whatever can go wrong, will, and then it is a hassle to once again obtain an original! They will need a copy of your driver’s license, social security card, bankruptcy discharge notification and debt schedules. They will also need to verify your address, which can be done by enclosing a copy of something rather official such as utility bill stating your correct address. On top of all this is a brief, to-the-point cover letter stating that it’s been 10 years since the bankruptcy, could they please clear this off the record, and refer to the attached, enclosed documentation as proof.

Lastly, wait. Give the process a little time to work, say about 30 days plus 5 days for mailing. During the waiting period do not apply for credit, just give yourself a little time. After about 35 days get another copy of your credit report and see how it looks. Debts from the bankruptcy should be listed with a $0 balance, and nothing about bankruptcy should appear on the report.

Remember, bankruptcy allows you to wipe your slate clean; it’s extremely important to learn from these lessons and not repeat them in the future! Start over, start fresh, and budget. Get some financial advice so you don’t wind up in the same place. You’ll be doing yourself a big favor!

http://bankruptcy-guide-to.com/a/358916/Bankruptcy+-+Clearing+Your+Credit+Record.html

Bankruptcy - Prevention Of Bankruptcy

What is Bankruptcy? It can be defined as the “inability to discharge all your debts as they come due.” Simply said, a person is way over his/her head in debt and can’t keep up with his/her payments.

This article intends to focus on prevention of bankruptcy. Although bankruptcy is legal, morally, it isn’t the best idea to get into so much debt that you cannot pay your bills. That is just not good character. Be a good citizen; be a good person; PAY YOUR BILLS. If you don’t pay your own bills, it makes things more expensive for everyone else, because we all have to bear a little piece of that cost.

Schools and parents need to teach children financial responsibility at a young age, so it is not a surprise when it’s time for them to leave home. The basics of this responsibility would include the 70/10/10/10 rule. Here comes money in: Be a good citizen and give 10% to a non-profit organization or church. Pay 10% to yourself in your savings account. Invest 10% in a money market account. And you will have 70% left over for spending money and bills. For younger children living at home, they may not have that many bills and can thus save up more money for a car, home, college, or other major future expense. It would be really great for a young person to have some money in savings in an emergency fund before they venture out on their own.

As a young person out on your own for the first time, you will need to establish credit but don’t go wild doing so. You need to prove to the credit card company that you will pay your bills. Upon receiving a credit card, it’s a good idea to not charge up more the 2/3 of your available credit, or else your credit score will go down.

Once credit is established, try to pay for as much as you can with cash. If you cannot afford something, wait until you get paid to get that item. Perhaps in the meantime you will realize that you don’t really want or need that item and can get along without it. Don’t give in to impulse buying. THINK with your head and not with your heart before you purchase.

If you don’t already have a savings account at this point, you will need to set one up as soon as possible. As for the amount to place in it, try to keep a $1,000 emergency fund, and more money is better. It is ideal to have a savings account that contains between 3 and 6 months worth of wages, just in case something happens to your job. Can’t afford to put $1,000 in at this minute? Start anyway. Start small, be faithful in your deposits (can you afford $10 a week?), and watch it build.

Try to save money with the purchases you make. If you can’t cover your basic bills and put 10% into savings, AND you see something you “must have” (but is probably optional), maybe you shouldn’t purchase it at this time. If you need a new chair for your apartment, ask yourself if it really needs to be “new” or if “used” would work. Start checking rummage sales and thrift shops for clothes, kitchen gadgets, knick-knacks, etc. And you know what? Let’s say, at this stage of your life, you absolutely cannot see yourself in used clothing (or a used chair or whatever). Think of it this way: if you are willing to economize in some areas of your life, you will have that much more money to spend on things that are more important to you! Good deal, huh?

Your vehicle can be a big money hog. Consider purchasing used instead of new. Did you know a new vehicle depreciates (that is, goes down in value) a couple thousand dollars as soon as you drive it out of the car lot? Be sure to spend the money to properly maintain it (oil changes, tune ups, etc.) so it will last as long as possible. Do you know what a “cool vehicle” is? Not an expensive one, but one that is …. PAID FOR! Nothing cooler than that! Then you can purchase a bumper sticker that says, “My other car is a Corvette,” ha ha.

Try to save money by recycling. Your monthly aluminum pop cans could buy you a pizza every month. Your empty ink-jet cartridges could get you free paper or discounted office supplies. Recycle paper properly even though there is no financial award for it. And you’ll be doing the environment, and your future, a favor as well. Think of how less full the landfill is because of your efforts!

Manage your “treasures.” If you have too many, have a rummage sale (that means money), sell ‘em on Ebay, or donate them to a non-profit organization, where you will receive a receipt that may be tax-deductible for tax purposes. Don’t spend money on storage units unless you absolutely have to. Remember, “He who has the most toys” doesn’t necessarily win, and certainly, “He who has the most debts” WON’T win.

If I’ve said it once, I’ve said it before: Be a good citizen; be a good person; PAY YOUR BILLS.

http://bankruptcy-guide-to.com/a/356361/Bankruptcy+-+Prevention+of+Bankruptcy.html

Bankruptcy Survival And Recovery

Bankruptcy can be seen as the ultimate in financial failure. Even Abraham Lincoln, a man universally admired as a great leader and orator, suffered bankruptcy at a time in his life. A more accurate definition of bankruptcy may be to see bankruptcy as one possible outcome as a result of taking certain kinds of financial risks. The creditors can initiate bankruptcy, but in most cases across the world, the debtor files bankruptcy. The debtor realizes that they can not pay back the debt in the way that it is being paid off currently, and tries to find another repayment strategy so as to pay back most of what is owed.

The issue of bankruptcy has existed in human civilizations for a long time. In ancient Greece, the only person who could own property was an adult male who had been born locally. If this individual was unable to pay his debts, his wife and children could become debt slaves for a maximum of five years to repay the debts. Obviously very few ancient Greeks would want to take on large debt loads under these conditions.

The fundamental cause of bankruptcy is that the cost of repaying debts has become too large in comparison to the income that the debtor has available to pay debts. This can be the result of a number of issues; including a high cost business venture, such as a restaurant, a market that changes direction, such as the end of a building boom, or simply an overly optimistic assumption about repayment possibilities by the debtor. The debtor may still have the means to discharge most of the debt, just not all of it.

A number of modern democracies have developed alternative approaches to resolving the bankruptcy issue outside of the more formal bankruptcy proceedings. In Canada, there is the Consumer Proposal that covers debt between five and seventy five thousand dollars. In the U. K. there are Individual Voluntary Arrangements.

The actual method by which bankruptcy is resolved may vary from country to country, but the basic approach has many similarities. Basically the individual declaring bankruptcy surrenders control over a large part of their assets to an objective third party, in this case the bankruptcy court, in order to find another way to pay off an overwhelming debt load. Unfortunately for the creditors, they will most likely receive only a portion of what was originally owed to them.

Most modern democracies have a more enlightened approach to viewing bankruptcy than may have existed in the past; bankruptcy is not necessarily a sign of poor character or an unwillingness to discharge debts. As a result of this more modern viewpoint, the potential for a bankrupt individual to recover and once again enjoy home ownership or credit is much greater. Some lenders even specialize in lending to previously bankrupt individuals. A good place to search for these lenders is on the Internet.

Going through bankruptcy proceedings is not an activity that most people would consider pleasant, but it may be necessary to control an increasingly overwhelming debt situation. If you are faced with the difficult choice of declaring bankruptcy yourself, or waiting for your creditors to bring bankruptcy proceedings, you may prefer a course of action where you at least feel some control. The best approach is always to be well informed about your possible strategies and options.

http://bankruptcy-guide-to.com/a/362122/Bankruptcy+Survival+and+Recovery.html

Who Are The Winners In Bankruptcy?

The truth of the matter is really quite bizarre, and can be shown to be nothing more than an excuse to give food (money) to a whole lot of bottom feeders and create a whole industry in the process!

Over the years you may have been lead to believe that the idea of bankruptcy is to protect both the debtors (those owing the money) and the creditors (those owed money) when this happens. The basic idea of this is not to allow the debtors to run up any further debt, and so become worse off; and at the same time protect the creditors by no longer allowing them to give the potential bankrupt more credit. Over and above this the debtor’s assets are confiscated, liquidated and turned into cash to repay the creditors.

A very noble plan - that seldom really works out in that way. In fact in most of the cases examined in gaining background material for this article, nothing like that happened.

In fact most of those people who filed for bankruptcy, or were forced into it, suffered several years of shame, loss of confidence, lack of credit and in most cases did not feel that the bankruptcy helped them in anyway at all.

You may feel that is a very biased view from the person whose fault it normally is when one gets into this situation, namely the debtor. However, you find that the majority of creditors involved in these kinds of cases come away feeling they have been cheated too; and very few are satisfied with the results.

So who really does gain from a bankruptcy? Possible three different areas of people actually make up quite a large and elite group who will not want this form of legislation changed at all. They are basically the government in the form of the tax collecting sector (tax man), a group of lawyers and a group of administrators in trust companies (normally known as Trustees) who wind up the bankrupt estates, re-distribute their assets and report back to the courts in most countries.

In nearly all cases examined the last people to benefit from a bankruptcy would be the two most severely effected and involved sides made up by the debtor and creditors involved. To understand this more clearly you should understand that there is a group of people who make up an entire economic sector of the community who no longer see debt as anything more than ‘something’ or a commodity you can transfer or trade in.

A large portion of the legal sector and debt administrators belong to this group. People involved in claiming ‘to help’ others get though debt and bankruptcy. In fact these same people may even advise a creditor to “sell off their debt”, or write it off at a financial loss to avoid not getting any money at all through a debtor going bankrupt.

They then attempt to recover the debt though one of their subsidiaries and, in the process, increase the size of the debt with additional costs they add to the debt for their work. In the end they may then “sell” the debt off at the exact same price they paid for it (percentage wise) to another debt collecting business, but because the debt has doubled in size they make a 100% return on their money!

While the legal people involved in a bankruptcy have their fees guaranteed, along with the tax man (via the debtors assets), and then the administrators take a fixed percentage of the recovered assets this process will continue favouring the ‘bottom feeders’ and not the real victims of bankruptcy.

But is there a better answer?

http://bankruptcy-guide-to.com/a/363068/Who+Are+the+Winners+in+Bankruptcy%3f.html