The new bankruptcy law is in effect, and the climate has drastically changed for people who are considering bankruptcy. In this article we will touch on some of the details of the new law, and explain exactly how these new changes will affect you.
First, let's touch on the new counseling requirements. According to the new law, you must complete credit counseling with an agency approved by the United States Trustee's office before you can file for bankruptcy under either Chapter 13 or Chapter 7. Because this counseling is to decide whether you need to file for bankruptcy, or if an informal payment plan would be a better alternative for your situation. The counseling is mandatory for everyone, even for people who know for certain that a repayment plan is not what they want.
However, you are required only to join in the counseling; you do not have to go with any repayment plans the agency recommends.
But if you are given a plan, you will have to present the plan to the court with a certificate showing that you attended the counseling before you can file for bankruptcy. Once your bankruptcy case is over, you will have to attend another counseling session focused on learning personal financial management skills to complete your bankruptcy and erase your debts.
Another major change that comes with the new law effects many people who want to file chapter 7 bankruptcy. Under the old law, most people filing could choose between Chapter 7 and Chapter 13, and most people chose Chapter 7. Because of the new law, many filers with higher incomes will be prohibited from using Chapter 7.
The first step in determining whether or not you can file for Chapter 7 is to compare your current monthly income to the median income for a family of your size in the state you live in. In the context of the new law, your current monthly income is not your income at the time you file, but your average income over the last six months before you file.
Once you have determined your income, measure it against the median income in your state. If your income is equal to or less than the median, you can file for Chapter 7. If it is more than the median, you must pass a requirement of the new law called the means test. The means test requires you to determine your amount of "disposable income" by subtracting different variables from your current monthly income.
If your current monthly income after subtracting these amounts is under $100, you pass the means test, and will be able to file for Chapter 7. If you income is more than $166.66, you will be prohibited from using Chapter 7. Those in the middle of these incomes will be able to file for chapter 7, but will be required to still pay a percentage of their debt.
Yet another important change caused by the new law is that lawyers may be harder to find, and possibly more expensive. The new law has added many complex requirements to the process of filing for bankruptcy that will make it more time consuming for lawyers to represent their clients in bankruptcy cases. The end result being that attorney fees for representation will increase. Also, the amount of time that lawyers must put into the new regulations has increased and it is likely that it may be harder to find a lawyer that solely specialized in bankruptcy in the future. Many experts are predicting that the stress of these new requirements may drive some bankruptcy lawyers out of the field completely.
Now that you know many of the changes the new bankruptcy laws hold for your situation, be aware and file with care.
http://www.articlebliss.com/Article/The-New-Bankruptcy-Law--Information-You-Need-To-Know-Before-You-File/43917
Saturday, October 27, 2007
Friday, October 26, 2007
Avoiding Bankruptcy - How To Avoid a Financial Problem
Bankruptcy may seem like a quick and relatively easy fix to a big problem, but it isn't. First, it can haunt your financial life for a decade or more, keeping you from owning a home, buying a new car, or even living the life you really want.
Maybe you're debt is beginning to weight you down. It's not to late t change some bad habits and reverse your financial woes. How can you avoid bankruptcy? Here's a good place to start:
Get Control of Your Spending:
Less than 43% of Americans today have more than $1,000 saved for a rainy day. Living paycheck to paycheck is a dangerous, considering that emergencies happen every day. Cars break down; people get hurt and miss work; unexpected pregnancies force women out of the workforce, and more. If you're struggling to pay your bills now, imagine the chaos an unexpected layoff would cause.
Sure, not everyone has the ability t save a large chunk of their salary, but almost everyone can put $5, $10 or even $15 a week away in a savings account. The key to living under your means, and avoiding bankruptcy, is creating a workable spending plan (ok, a budget), and stick to eat. First figure out the things that are essential; place to live, food to eat, a way to get to work, etc. Now, this doesn't mean that you need to live in an $1800 a month condo if you make $23,000 a year. It means finding an apartment or home that you can afford; a reasonably priced car (or take the bus), and regular old jeans, not the designer kind.
Remember, the point here is to spend less than you make, and that will mean sacrifice of some type. How much sacrifice depends on how far over your income your spending has become. Once you've figured out your necessity spending, then you can take a good hard look at your non-essential spending habits and limit that to what you can reasonably afford and still be able to have enough left to pay down your current debt and save for an emergency.
So, how much should you be spending? Most experts agree that a sound-spending plan should consist of the following ratio:
* 35% of your net pay for housing costs (rent, utilities)
* 15% for transportation ( car payments, gas, maintenance, insurance)
* 15% for debt (credit card payments, student loans, personal loans, etc)
* 10% toward savings
* 25% for everything else (clothes, food, fun)
Following this ratio should allow you to live a comfortably debt-free life, freeing you of he worry of bankruptcy in the future.
Debt Consolidation:
Ok, so maybe it's too late to prevent financial trouble - you already have it. How can you stave off bankruptcy in order to get your financial house in order? If you own your home, and you're able to handle the payments, causing your home equity to consolidate your entire debt into one long-term loan may be the answer. Be careful though. Until you break the spending cycle that got you into trouble in the first place, this is only a temporary solution that can ultimately mean the loss of your home if you continue to wrack up debt after the consolidation is complete. If, however, you're prepared to pare back your expenses and attack your debt head on, then this may be a great way to buy a little time and keep creditors in check.
Debt Settlement:
Sometimes, even the equity in your home is gone and the well is simply dry. Creditors hate bankruptcy since they either never reclaim any of what you owe them, or get pennies on the dollar through payment options. So, once bankruptcy has become an option, contact your creditors and see if there's a possibility you can settle some of your debt in order to help you avoid bankruptcy altogether. Many are more than happy to forgive up to 60% of your current debt if they are guaranteed they'll get the last 40% in a timely manner. Be prepared, however, to prove your case. Face it, you haven't been very responsible thus far with your spending, or your bills, so they'll need a little convincing that things have changed and that you are indeed working hard to make things right.
Credit Counseling:
Oftentimes, people get into financial trouble simply because they don't know any better. Credit counseling can be a wonderful resource to help you get your spending under control, learn to live on a budget and handle debt settlement and consolidation for you. Just be sure that you choose a reputable service that has a proven track record.
While bankruptcy may seem like the best solution when creditors are calling every hour of the day or night, but, bankruptcy can often be avoided with a little ingenuity and some hard work.
Sick and Tired of Not Profiting From Your Websites? Start Your Own Custom Content Websites Network TODAY with eWebCreator.com. Get Our FREE Website Secrets e-Course Here.
Article Source: http://EzineArticles.com/?expert=Matt_Hick
Maybe you're debt is beginning to weight you down. It's not to late t change some bad habits and reverse your financial woes. How can you avoid bankruptcy? Here's a good place to start:
Get Control of Your Spending:
Less than 43% of Americans today have more than $1,000 saved for a rainy day. Living paycheck to paycheck is a dangerous, considering that emergencies happen every day. Cars break down; people get hurt and miss work; unexpected pregnancies force women out of the workforce, and more. If you're struggling to pay your bills now, imagine the chaos an unexpected layoff would cause.
Sure, not everyone has the ability t save a large chunk of their salary, but almost everyone can put $5, $10 or even $15 a week away in a savings account. The key to living under your means, and avoiding bankruptcy, is creating a workable spending plan (ok, a budget), and stick to eat. First figure out the things that are essential; place to live, food to eat, a way to get to work, etc. Now, this doesn't mean that you need to live in an $1800 a month condo if you make $23,000 a year. It means finding an apartment or home that you can afford; a reasonably priced car (or take the bus), and regular old jeans, not the designer kind.
Remember, the point here is to spend less than you make, and that will mean sacrifice of some type. How much sacrifice depends on how far over your income your spending has become. Once you've figured out your necessity spending, then you can take a good hard look at your non-essential spending habits and limit that to what you can reasonably afford and still be able to have enough left to pay down your current debt and save for an emergency.
So, how much should you be spending? Most experts agree that a sound-spending plan should consist of the following ratio:
* 35% of your net pay for housing costs (rent, utilities)
* 15% for transportation ( car payments, gas, maintenance, insurance)
* 15% for debt (credit card payments, student loans, personal loans, etc)
* 10% toward savings
* 25% for everything else (clothes, food, fun)
Following this ratio should allow you to live a comfortably debt-free life, freeing you of he worry of bankruptcy in the future.
Debt Consolidation:
Ok, so maybe it's too late to prevent financial trouble - you already have it. How can you stave off bankruptcy in order to get your financial house in order? If you own your home, and you're able to handle the payments, causing your home equity to consolidate your entire debt into one long-term loan may be the answer. Be careful though. Until you break the spending cycle that got you into trouble in the first place, this is only a temporary solution that can ultimately mean the loss of your home if you continue to wrack up debt after the consolidation is complete. If, however, you're prepared to pare back your expenses and attack your debt head on, then this may be a great way to buy a little time and keep creditors in check.
Debt Settlement:
Sometimes, even the equity in your home is gone and the well is simply dry. Creditors hate bankruptcy since they either never reclaim any of what you owe them, or get pennies on the dollar through payment options. So, once bankruptcy has become an option, contact your creditors and see if there's a possibility you can settle some of your debt in order to help you avoid bankruptcy altogether. Many are more than happy to forgive up to 60% of your current debt if they are guaranteed they'll get the last 40% in a timely manner. Be prepared, however, to prove your case. Face it, you haven't been very responsible thus far with your spending, or your bills, so they'll need a little convincing that things have changed and that you are indeed working hard to make things right.
Credit Counseling:
Oftentimes, people get into financial trouble simply because they don't know any better. Credit counseling can be a wonderful resource to help you get your spending under control, learn to live on a budget and handle debt settlement and consolidation for you. Just be sure that you choose a reputable service that has a proven track record.
While bankruptcy may seem like the best solution when creditors are calling every hour of the day or night, but, bankruptcy can often be avoided with a little ingenuity and some hard work.
Sick and Tired of Not Profiting From Your Websites? Start Your Own Custom Content Websites Network TODAY with eWebCreator.com. Get Our FREE Website Secrets e-Course Here.
Article Source: http://EzineArticles.com/?expert=Matt_Hick
Thursday, October 25, 2007
Do You Need Bad Credit Help
? Are you one of thousands with no credit and no collateral to help secure approval, or you just
have extremely bad credit and no one wants to help you, and all you hear is stories and more stories?
Bad credit is a term used to describe a poor credit rating.Common practices that can damage a credit rating include making late payments, skipping payments, exceeding card limits ordeclaring bankruptcy. Bad Credit can result in being denied credit.
Bad credit can result in a negative rating from the credit reporting agencies. Many factors can contribute to someone getting a "bad credit" rating, among these are non-payment of an
account or late payments over an extended length of time.Whether non-payment of an account is willful or due to financial hardship, the result can be the same, a negative rating which
will result in a low credit score. However, lenders are more willing to work with individuals if the person contacts the lender to let them know they are having problems meeting their
commitment to pay. 100% Online Debt Relief! No Phone Calls! You must have at least $2,500 of total debt over two or more accounts to qualify for our Help. Name, email, and Zip Code are
required. US Residents only. No phone call required - all customer interaction is done online!
Christian Debt Consolidation Services Professional Debt Consolidation with a Christian perspective. Lower monthly payments. Reduce or Eliminate High interest rates. Apply now for
a FREE NO-OBLIGATION QUOTE!Fast Loans Online by DrCredit We are currently able to provide auto loans, mortgage loans, debt counseling, home equity,refinance loans, debt consolidation loans, personal loans and much more...
A credit score is defined as a statistical method of assessing an applicant's credit worthiness. An applicant's credit card history; amount of outstanding debt; the type of credit used;negative information such as bankruptcies or late payments;collection accounts and judgments; too little credit history,and too many credit lines with the maximum amount borrowed are all included in credit-scoring models to determine the credit score.
Raising your credit score is possible. It's a well known fact that lenders will give people with higher credit scores lower interest rates on mortgages, car loans and credit cards. If your
credit score falls under 620 just getting loans and credit cards
with reasonable terms is difficult.
Here are five things that you can use to raise credit score.
1. Correct obvious mistakes.
Your credit score is what shows up in your credit report. Review your reports from all three credit bureaus for accuracy once a year as well as several months before applying for a loan.
Changing a mistake on your report can take 30 days to three months, or more. Get Your credit report from the three major bureaus: Experian, Trans Union and Equifax.
2. Pay Your Bills On Time
Your payment history makes up 35% of your total credit score.Your recent payment history will carry much more weight than what happened five years ago.
Missing just one payment on anything can knock 50 to 100 points off of your credit score.
Paying your bills on time is the best way to get started rebuilding your credit rating and raising your credit score.
3. Reduce your credit card balances.
A heavily weighted factor in your FICO score is how much money you owe on your credit cards relative to your total credit limit. Generally, it's good to keep your balances at or below 25
percent of your credit card limit, said Jeanne Kelly, founder of The Kelly Group in Brookfield, Conn., which helps clients improve their credit scores.
4. Don’t Close Old Accounts
In the past people were told to close old accounts they weren’t using. But with today's current scoring methods that could actually hurt your credit score.
Closing old or paid off credit accounts lowers the total credit available to you and makes any balances you have appear larger in credit score calculations. Closing your oldest accounts can
actually shorten the length of your credit history and to a lender it makes you less credit worthy.
If you are trying to minimize identity theft and it's worth the peace of mind for you to close your old or paid off accounts,the good news is it will only lower you score a minimal amount.But just by keeping those old accounts open you can raise credit score for you.
5. Avoid Bankruptcy
Bankruptcy is the single worst thing you can do to your credit score. Bankruptcy will lower your credit score by 200 points or more and is very difficult to come back from.
Once your credit score falls below 620, any loan you get will be far more expensive. A bankruptcy on your credit record is reported for up to 10 years.
The reality of a bankruptcy is it will limit you to high-interest lenders that will squeeze out high interest rate payments from you for years.
It is better to get credit counseling to help you with your bills and avoid bankruptcy at all costs. By getting credit counseling instead of declaring bankruptcy you can raise credit
score over a much shorter period of time.
http://bk.shamrockbusiness.com/do-you-need-bad-credit-help.html
have extremely bad credit and no one wants to help you, and all you hear is stories and more stories?
Bad credit is a term used to describe a poor credit rating.Common practices that can damage a credit rating include making late payments, skipping payments, exceeding card limits ordeclaring bankruptcy. Bad Credit can result in being denied credit.
Bad credit can result in a negative rating from the credit reporting agencies. Many factors can contribute to someone getting a "bad credit" rating, among these are non-payment of an
account or late payments over an extended length of time.Whether non-payment of an account is willful or due to financial hardship, the result can be the same, a negative rating which
will result in a low credit score. However, lenders are more willing to work with individuals if the person contacts the lender to let them know they are having problems meeting their
commitment to pay. 100% Online Debt Relief! No Phone Calls! You must have at least $2,500 of total debt over two or more accounts to qualify for our Help. Name, email, and Zip Code are
required. US Residents only. No phone call required - all customer interaction is done online!
Christian Debt Consolidation Services Professional Debt Consolidation with a Christian perspective. Lower monthly payments. Reduce or Eliminate High interest rates. Apply now for
a FREE NO-OBLIGATION QUOTE!Fast Loans Online by DrCredit We are currently able to provide auto loans, mortgage loans, debt counseling, home equity,refinance loans, debt consolidation loans, personal loans and much more...
A credit score is defined as a statistical method of assessing an applicant's credit worthiness. An applicant's credit card history; amount of outstanding debt; the type of credit used;negative information such as bankruptcies or late payments;collection accounts and judgments; too little credit history,and too many credit lines with the maximum amount borrowed are all included in credit-scoring models to determine the credit score.
Raising your credit score is possible. It's a well known fact that lenders will give people with higher credit scores lower interest rates on mortgages, car loans and credit cards. If your
credit score falls under 620 just getting loans and credit cards
with reasonable terms is difficult.
Here are five things that you can use to raise credit score.
1. Correct obvious mistakes.
Your credit score is what shows up in your credit report. Review your reports from all three credit bureaus for accuracy once a year as well as several months before applying for a loan.
Changing a mistake on your report can take 30 days to three months, or more. Get Your credit report from the three major bureaus: Experian, Trans Union and Equifax.
2. Pay Your Bills On Time
Your payment history makes up 35% of your total credit score.Your recent payment history will carry much more weight than what happened five years ago.
Missing just one payment on anything can knock 50 to 100 points off of your credit score.
Paying your bills on time is the best way to get started rebuilding your credit rating and raising your credit score.
3. Reduce your credit card balances.
A heavily weighted factor in your FICO score is how much money you owe on your credit cards relative to your total credit limit. Generally, it's good to keep your balances at or below 25
percent of your credit card limit, said Jeanne Kelly, founder of The Kelly Group in Brookfield, Conn., which helps clients improve their credit scores.
4. Don’t Close Old Accounts
In the past people were told to close old accounts they weren’t using. But with today's current scoring methods that could actually hurt your credit score.
Closing old or paid off credit accounts lowers the total credit available to you and makes any balances you have appear larger in credit score calculations. Closing your oldest accounts can
actually shorten the length of your credit history and to a lender it makes you less credit worthy.
If you are trying to minimize identity theft and it's worth the peace of mind for you to close your old or paid off accounts,the good news is it will only lower you score a minimal amount.But just by keeping those old accounts open you can raise credit score for you.
5. Avoid Bankruptcy
Bankruptcy is the single worst thing you can do to your credit score. Bankruptcy will lower your credit score by 200 points or more and is very difficult to come back from.
Once your credit score falls below 620, any loan you get will be far more expensive. A bankruptcy on your credit record is reported for up to 10 years.
The reality of a bankruptcy is it will limit you to high-interest lenders that will squeeze out high interest rate payments from you for years.
It is better to get credit counseling to help you with your bills and avoid bankruptcy at all costs. By getting credit counseling instead of declaring bankruptcy you can raise credit
score over a much shorter period of time.
http://bk.shamrockbusiness.com/do-you-need-bad-credit-help.html
How Bankruptcy Works
Bankruptcy… a frightening word with serious connotations. In recent years governments have been cracking down, making penalties for bankruptcy more severe in an attempt to make them more difficult to attain so that only those in serious need can apply for them.
Despite the negative image that is associated with bankruptcy and the various problems that come along with declaring a bankruptcy, it doesn't have to be frightening; after all, bankruptcy was designed as a way for those individuals and businesses who find that their finances are out of control to get the help that they need to organize their finances and pay off their debts.
Once you take the time to understand what bankruptcy is and how it works, you won't find it as scary as you did at first.
Defining Bankruptcy
Bankruptcy is a legal term, meaning that an individual cannot within reason pay off their various debts and have allowed the court system to take over their finances for this purpose.
When filing for bankruptcy, the court will appoint someone to work out the payments to your creditors and to determine how much of your income must go to repay these debts. The court will either allow you to make payments, or more likely will deduct a portion of your paycheck toward this goal.
During this time, your credit will be limited… both by legal action and by the reluctance of creditors to issue credit lines to individuals who have declared bankruptcy.
Once the total amount set by the court has been repaid, the bankruptcy will be discharged and you will be able to start rebuilding your credit from the ground up.
Different Types of Bankruptcy
Several different types of bankruptcy exist, defined by legal codes for certain purposes. The exact types of bankruptcy available differ from one country to the next… in the United Kingdom bankruptcy can only legally be applied to individuals and partnerships, whereas in other countries such as the United States or Canada they can be applied to businesses as well.
Regardless of the limitations or allowances set by the government on who is allowed to declare bankruptcy, the general purpose of bankruptcy remains the same.
Lasting Effects of Bankruptcy
While you are working towards discharging a bankruptcy, your options for credit will be exceedingly limited. Even after you've had your bankruptcy filing discharged, though, you'll still find that you won't have many options for a while… many creditors will still be hesitant to work with you from between six months to two years depending upon the creditor and the service that you're applying for.
You should also take care with any offers that you do receive, because they will likely come with high interest rates and additional fees attached.
Life After Bankruptcy
Bankruptcy isn't the end of the world… it's actually a chance for a new beginning. As time goes by, the bankruptcy on your credit report will begin to matter less and less as you eventually start to establish new positive credit lines and build up your credit again.
Just like negative reports, your bankruptcy will eventually expire from your credit history; the process may take up to seven years, and until it expires there will still be those who are hesitant to deal with you.
Once it expires, however, the negative reports that preceded it will also be long gone… and you'll find that your newer reports are all that remain.
http://bk.shamrockbusiness.com/
Despite the negative image that is associated with bankruptcy and the various problems that come along with declaring a bankruptcy, it doesn't have to be frightening; after all, bankruptcy was designed as a way for those individuals and businesses who find that their finances are out of control to get the help that they need to organize their finances and pay off their debts.
Once you take the time to understand what bankruptcy is and how it works, you won't find it as scary as you did at first.
Defining Bankruptcy
Bankruptcy is a legal term, meaning that an individual cannot within reason pay off their various debts and have allowed the court system to take over their finances for this purpose.
When filing for bankruptcy, the court will appoint someone to work out the payments to your creditors and to determine how much of your income must go to repay these debts. The court will either allow you to make payments, or more likely will deduct a portion of your paycheck toward this goal.
During this time, your credit will be limited… both by legal action and by the reluctance of creditors to issue credit lines to individuals who have declared bankruptcy.
Once the total amount set by the court has been repaid, the bankruptcy will be discharged and you will be able to start rebuilding your credit from the ground up.
Different Types of Bankruptcy
Several different types of bankruptcy exist, defined by legal codes for certain purposes. The exact types of bankruptcy available differ from one country to the next… in the United Kingdom bankruptcy can only legally be applied to individuals and partnerships, whereas in other countries such as the United States or Canada they can be applied to businesses as well.
Regardless of the limitations or allowances set by the government on who is allowed to declare bankruptcy, the general purpose of bankruptcy remains the same.
Lasting Effects of Bankruptcy
While you are working towards discharging a bankruptcy, your options for credit will be exceedingly limited. Even after you've had your bankruptcy filing discharged, though, you'll still find that you won't have many options for a while… many creditors will still be hesitant to work with you from between six months to two years depending upon the creditor and the service that you're applying for.
You should also take care with any offers that you do receive, because they will likely come with high interest rates and additional fees attached.
Life After Bankruptcy
Bankruptcy isn't the end of the world… it's actually a chance for a new beginning. As time goes by, the bankruptcy on your credit report will begin to matter less and less as you eventually start to establish new positive credit lines and build up your credit again.
Just like negative reports, your bankruptcy will eventually expire from your credit history; the process may take up to seven years, and until it expires there will still be those who are hesitant to deal with you.
Once it expires, however, the negative reports that preceded it will also be long gone… and you'll find that your newer reports are all that remain.
http://bk.shamrockbusiness.com/
Wednesday, October 24, 2007
Fair Debt Collection
If you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a "debtor." If you fall behind in repaying your creditors, or an error is made on your accounts, you may be contacted by a "debt collector."
You should know that in either situation, the Fair Debt Collection Practices Act requires that debt collectors treat you fairly and prohibits certain methods of debt collection. Of course, the law does not erase any legitimate debt you owe.
This brochure answers commonly asked questions about your rights under the Fair Debt Collection Practices Act.
What debts are covered?
Personal, family, and household debts are covered under the Act. This includes money owed for the purchase of an automobile, for medical care, or for charge accounts.
Who is a debt collector?
A debt collector is any person who regularly collects debts owed to others. This includes attorneys who collect debts on a regular basis.
How may a debt collector contact you?
A collector may contact you in person, by mail, telephone, telegram, or fax. However, a debt collector may not contact you at inconvenient times or places, such as before 8 a.m. or after 9 p.m., unless you agree. A debt collector also may not contact you at work if the collector knows that your employer disapproves of such contacts.
Can you stop a debt collector from contacting you?
You can stop a debt collector from contacting you by writing a letter to the collector telling them to stop. Once the collector receives your letter, they may not contact you again except to say there will be no further contact or to notify you that the debt collector or the creditor intends to take some specific action. Please note, however, that sending such a letter to a collector does not make the debt go away if you actually owe it. You could still be sued by the debt collector or your original creditor.
May a debt collector contact anyone else about your debt?
If you have an attorney, the debt collector must contact the attorney, rather than you. If you do not have an attorney, a collector may contact other people, but only to find out where you live, what your phone number is, and where you work. Collectors usually are prohibited from contacting such third parties more than once. In most cases, the collector may not tell anyone other than you and your attorney that you owe money.
What must the debt collector tell you about the debt?
Within five days after you are first contacted, the collector must send you a written notice telling you the amount of money you owe; the name of the creditor to whom you owe the money; and what action to take if you believe you do not owe the money.
May a debt collector continue to contact you if you believe you do not owe money?
A collector may not contact you if, within 30 days after you receive the written notice, you send the collection agency a letter stating you do not owe money. However, a collector can renew collection activities if you are sent proof of the debt, such as a copy of a bill for the amount owed.
What types of debt collection practices are prohibited?
Harassment. Debt collectors may not harass, oppress, or abuse you or any third parties they contact.
For example, debt collectors may not:
- use threats of violence or harm;
- publish a list of consumers who refuse to pay their debts (except to a credit bureau);
- use obscene or profane language; or repeatedly use the telephone to annoy someone.
False statements. Debt collectors may not use any false or misleading statements when collecting a debt. For example, debt collectors may not:
- falsely imply that they are attorneys or government representatives;
- falsely imply that you have committed a crime;
- falsely represent that they operate or work for a credit bureau;
- misrepresent the amount of your debt;
- indicate that papers being sent to you are legal forms when they are not; or
- indicate that papers being sent to you are not legal forms when they are.
Debt collectors also may not state that:
- you will be arrested if you do not pay your debt;
- they will seize, garnish, attach, or sell your property or wages, unless the collection agency or creditor intends to do so, and it is legal to do so; or
- actions, such as a lawsuit, will be taken against you, when such action legally may not be taken, or when they do not intend to take such action.
Debt collectors may not:
- give false credit information about you to anyone, including a credit bureau;
- send you anything that looks like an official document from a court or government agency when it is not; or
- use a false name.
Unfair practices. Debt collectors may not engage in unfair practices when they try to collect a debt. For example, collectors may not:
- collect any amount greater than your debt, unless your state law permits such a charge;
- deposit a post-dated check prematurely;
- use deception to make you accept collect calls or pay for telegrams;
- take or threaten to take your property unless this can be done legally; or
- contact you by postcard.
What control do you have over payment of debts?
If you owe more than one debt, any payment you make must be applied to the debt you indicate. A debt collector may not apply a payment to any debt you believe you do not owe.
What can you do if you believe a debt collector violated the law?
You have the right to sue a collector in a state or federal court within one year from the date the law was violated. If you win, you may recover money for the damages you suffered plus an additional amount up to $1,000. Court costs and attorney' s fees also can be recovered. A group of people also may sue a debt collector and recover money for damages up to $500,000, or one percent of the collector' s net worth, whichever is less.
Where can you report a debt collector for an alleged violation?
Report any problems you have with a debt collector to your state Attorney General' s office and the Federal Trade Commission. Many states have their own debt collection laws, and your Attorney General' s office can help you determine your rights.
http://www.justia.com/bankruptcy/docs/fair-debt-collection.html
For People on Debt Management Plans: A Must-Do List
Reputable credit counseling organizations employ counselors who are certified and trained in consumer credit, money and debt management, and budgeting. Those organizations that are nonprofit have a legal obligation to provide education and counseling.
But not all credit counseling organizations provide these services. Some charge high fees, not all of which are disclosed, or urge you to make "voluntary" contributions that can cause you to fall deeper into debt. Many claim that a debt management plan is your only option before they spend time reviewing your financial situation, and offer little or no consumer education and counseling. Others misrepresent their nonprofit status or fraudulently obtained nonprofit status by misrepresenting their business practices to regulators.
The Federal Trade Commission (FTC), the nation's consumer protection agency, and some state Attorneys General have sued several companies that called themselves credit counseling organizations. The FTC and the states said these companies deceived consumers about the cost, nature, and benefits of the services they offered; some companies even lied about their nonprofit status. Several of these companies are now going out of business. Similar companies also may be shutting their doors, even though they haven't been sued by the FTC or the states. That could be of special concern if you have a debt management plan with one of these companies.
Must-Dos for Anyone With A DMP
Organizations that advertise credit counseling often arrange for consumers to pay debts through a debt management plan (DMP). In a DMP, you deposit money each month with a credit counseling organization. The organization uses these deposits to pay your credit card bills, student loans, medical bills, or other unsecured debts according to a payment schedule they've worked out with you and your creditors. Creditors may agree to lower interest rates or waive certain fees if you are repaying through a DMP.
The FTC has found that some organizations that offer DMPs have deceived and defrauded consumers, and recommends that consumers check their bills to make sure that the organization fulfills its promises. If you are paying through a DMP, contact your creditors and confirm that they have accepted the proposed plan before you send any payments to the organization handling your DMP. Once the creditors have accepted the DMP, it is important to:
* make regular, timely payments.
* always read your monthly statements promptly to make sure your creditors are getting paid according to your plan.
* contact the organization responsible for your DMP if you will be unable to make a scheduled payment, or if you discover that creditors are not being paid.
You need to be aware that if payments to your DMP and creditors are not made on time, you could lose the progress you've made on paying down your debt, or the benefits of being in a DMP, including lower interest rates and fee waivers. Although creditors may have forgiven late payments that you made before you began the DMP, the creditors may be unwilling or unable to do so if payments are late after you have enrolled in a DMP. If you fall behind on your payments, you may not be able to have your accounts "re-aged" again (reported as current), even if you start a new DMP with a new counselor. That means your credit report will have "late" marks and you will rack up late fees, which, in turn, will lead to more debt that could take longer to pay off.
If Your Credit Counselor Has Gone Out of Business
What happens to your DMP if the credit counseling company that managed your debts shuts down? A counseling agency that is going out of business may send you a notice telling you that your DMP is being transferred to another company. Or it may tell you that you need to take some action to keep your financial recovery on track. If a government agency has filed an action against your credit counseling company, you may get a notice from a third party. If you discover that the organization handling your DMP is going out of business you need to:
* contact your bank to stop payment if you are making your DMP payments through automatic withdrawal.
* start paying your bills directly to your creditors.
* notify your creditors that the organization handling your DMP is going out of business. Consider working out a payment plan with your creditors yourself. Ask if they will give you a reduction on your interest rate without a DMP.
* order a copy of your credit report. Check for late payments — or missed DMP payments — that may result from the company going out of business. If you see "late" notations you don't expect, call the creditor immediately and ask that the notation be removed. Understand that they have no obligation to do it.
If payments are late because the organization handling your DMP has failed to make scheduled payments, the consequences can be just as devastating as if you failed to make payments to the DMP. If you do not act quickly to make arrangements with your creditors, you could incur late charges that increase your debt, lose the lower interest rates associated with the DMP, and have "late" marks on your credit report.
Important Questions to Ask When Choosing a Credit Counselor
If the organization you were working with shuts down, you may be able to work a payment plan on your own directly with your creditors. But if you decide that you need additional credit advice and assistance, or if you are considering working with a credit counselor for the first time, asking questions like these can help you find the best counselor for you.
1. What services do you offer? Look for an organization that offers a range of services, including budget counseling, savings and debt management classes, and counselors who are trained and certified in consumer credit, money and debt management, and budgeting. Counselors should discuss your entire financial situation with you, and help you develop a personalized plan to solve your money problems now and avoid others in the future. An initial counseling session typically lasts an hour, with an offer of follow-up sessions. Avoid organizations that push a debt management plan as your only option before they spend a significant amount of time analyzing your financial situation. DMPs are not for everyone. You should sign up for a DMP only after a certified credit counselor has spent time thoroughly reviewing your financial situation, and has offered you customized advice on managing your money.
If you were on a DMP with an organization that closed down, ask any credit counselor that you are considering what they can do to help you retain the benefits of your DMP.
2. Are you licensed to offer your services in my state? Many states require that an organization register or obtain a license before offering credit counseling, debt management plans, and similar services. Do not hire an organization that has not fulfilled the requirements for your state.
3. Do you offer free information? Avoid organizations that charge for information about the nature of their services.
4. Will I have a formal written agreement or contract with you? Don't commit to participate in a DMP over the telephone. Get all verbal promises in writing. Read all documents carefully before you sign them. If you are told you need to act immediately, consider finding another organization.
5. What are the qualifications of your counselors? Are they accredited or certified by an outside organization? If so, which one? If not, how are they trained? Try to use an organization whose counselors are trained by an outside organization that is not affiliated with creditors.
6. Have other consumers been satisfied with the service that they received? Once you've identified credit counseling organizations that suit your needs, check them out with your state Attorney General, local consumer protection agency, and Better Business Bureau. These organizations can tell you if consumers have filed complaints about them. The absence of complaints doesn't guarantee legitimacy, but complaints from other consumers may alert you to problems.
7. What are your fees? Are there set-up and/or monthly fees? Get a detailed price quote in writing, and specifically ask whether all the fees are covered in the quote. If you're concerned that you cannot afford to pay your fees, ask if the organization waives or reduces fees when providing counseling to consumers in your circumstances. If an organization won't help you because you can't afford to pay, look elsewhere for help.
8. How are your employees paid? Are the employees or the organization paid more if I sign up for certain services, pay a fee, or make a contribution to your organization? Employees who are counseling you to purchase certain services may receive a commission if you choose to sign up for those services. Many credit counseling organizations receive additional compensation from creditors if you enroll in a DMP. If the organization will not disclose what compensation it receives from creditors, or how employees are compensated, go elsewhere for help.
9. What do you do to keep personal information about your clients (for example, name, address, phone number, and financial information) confidential and secure? Credit counseling organizations handle your most sensitive financial information. The organization should have safeguards in place to protect the privacy of this information and prevent misuse.
http://www.justia.com/bankruptcy/docs/debt-management-plan-must-do-list.html
But not all credit counseling organizations provide these services. Some charge high fees, not all of which are disclosed, or urge you to make "voluntary" contributions that can cause you to fall deeper into debt. Many claim that a debt management plan is your only option before they spend time reviewing your financial situation, and offer little or no consumer education and counseling. Others misrepresent their nonprofit status or fraudulently obtained nonprofit status by misrepresenting their business practices to regulators.
The Federal Trade Commission (FTC), the nation's consumer protection agency, and some state Attorneys General have sued several companies that called themselves credit counseling organizations. The FTC and the states said these companies deceived consumers about the cost, nature, and benefits of the services they offered; some companies even lied about their nonprofit status. Several of these companies are now going out of business. Similar companies also may be shutting their doors, even though they haven't been sued by the FTC or the states. That could be of special concern if you have a debt management plan with one of these companies.
Must-Dos for Anyone With A DMP
Organizations that advertise credit counseling often arrange for consumers to pay debts through a debt management plan (DMP). In a DMP, you deposit money each month with a credit counseling organization. The organization uses these deposits to pay your credit card bills, student loans, medical bills, or other unsecured debts according to a payment schedule they've worked out with you and your creditors. Creditors may agree to lower interest rates or waive certain fees if you are repaying through a DMP.
The FTC has found that some organizations that offer DMPs have deceived and defrauded consumers, and recommends that consumers check their bills to make sure that the organization fulfills its promises. If you are paying through a DMP, contact your creditors and confirm that they have accepted the proposed plan before you send any payments to the organization handling your DMP. Once the creditors have accepted the DMP, it is important to:
* make regular, timely payments.
* always read your monthly statements promptly to make sure your creditors are getting paid according to your plan.
* contact the organization responsible for your DMP if you will be unable to make a scheduled payment, or if you discover that creditors are not being paid.
You need to be aware that if payments to your DMP and creditors are not made on time, you could lose the progress you've made on paying down your debt, or the benefits of being in a DMP, including lower interest rates and fee waivers. Although creditors may have forgiven late payments that you made before you began the DMP, the creditors may be unwilling or unable to do so if payments are late after you have enrolled in a DMP. If you fall behind on your payments, you may not be able to have your accounts "re-aged" again (reported as current), even if you start a new DMP with a new counselor. That means your credit report will have "late" marks and you will rack up late fees, which, in turn, will lead to more debt that could take longer to pay off.
If Your Credit Counselor Has Gone Out of Business
What happens to your DMP if the credit counseling company that managed your debts shuts down? A counseling agency that is going out of business may send you a notice telling you that your DMP is being transferred to another company. Or it may tell you that you need to take some action to keep your financial recovery on track. If a government agency has filed an action against your credit counseling company, you may get a notice from a third party. If you discover that the organization handling your DMP is going out of business you need to:
* contact your bank to stop payment if you are making your DMP payments through automatic withdrawal.
* start paying your bills directly to your creditors.
* notify your creditors that the organization handling your DMP is going out of business. Consider working out a payment plan with your creditors yourself. Ask if they will give you a reduction on your interest rate without a DMP.
* order a copy of your credit report. Check for late payments — or missed DMP payments — that may result from the company going out of business. If you see "late" notations you don't expect, call the creditor immediately and ask that the notation be removed. Understand that they have no obligation to do it.
If payments are late because the organization handling your DMP has failed to make scheduled payments, the consequences can be just as devastating as if you failed to make payments to the DMP. If you do not act quickly to make arrangements with your creditors, you could incur late charges that increase your debt, lose the lower interest rates associated with the DMP, and have "late" marks on your credit report.
Important Questions to Ask When Choosing a Credit Counselor
If the organization you were working with shuts down, you may be able to work a payment plan on your own directly with your creditors. But if you decide that you need additional credit advice and assistance, or if you are considering working with a credit counselor for the first time, asking questions like these can help you find the best counselor for you.
1. What services do you offer? Look for an organization that offers a range of services, including budget counseling, savings and debt management classes, and counselors who are trained and certified in consumer credit, money and debt management, and budgeting. Counselors should discuss your entire financial situation with you, and help you develop a personalized plan to solve your money problems now and avoid others in the future. An initial counseling session typically lasts an hour, with an offer of follow-up sessions. Avoid organizations that push a debt management plan as your only option before they spend a significant amount of time analyzing your financial situation. DMPs are not for everyone. You should sign up for a DMP only after a certified credit counselor has spent time thoroughly reviewing your financial situation, and has offered you customized advice on managing your money.
If you were on a DMP with an organization that closed down, ask any credit counselor that you are considering what they can do to help you retain the benefits of your DMP.
2. Are you licensed to offer your services in my state? Many states require that an organization register or obtain a license before offering credit counseling, debt management plans, and similar services. Do not hire an organization that has not fulfilled the requirements for your state.
3. Do you offer free information? Avoid organizations that charge for information about the nature of their services.
4. Will I have a formal written agreement or contract with you? Don't commit to participate in a DMP over the telephone. Get all verbal promises in writing. Read all documents carefully before you sign them. If you are told you need to act immediately, consider finding another organization.
5. What are the qualifications of your counselors? Are they accredited or certified by an outside organization? If so, which one? If not, how are they trained? Try to use an organization whose counselors are trained by an outside organization that is not affiliated with creditors.
6. Have other consumers been satisfied with the service that they received? Once you've identified credit counseling organizations that suit your needs, check them out with your state Attorney General, local consumer protection agency, and Better Business Bureau. These organizations can tell you if consumers have filed complaints about them. The absence of complaints doesn't guarantee legitimacy, but complaints from other consumers may alert you to problems.
7. What are your fees? Are there set-up and/or monthly fees? Get a detailed price quote in writing, and specifically ask whether all the fees are covered in the quote. If you're concerned that you cannot afford to pay your fees, ask if the organization waives or reduces fees when providing counseling to consumers in your circumstances. If an organization won't help you because you can't afford to pay, look elsewhere for help.
8. How are your employees paid? Are the employees or the organization paid more if I sign up for certain services, pay a fee, or make a contribution to your organization? Employees who are counseling you to purchase certain services may receive a commission if you choose to sign up for those services. Many credit counseling organizations receive additional compensation from creditors if you enroll in a DMP. If the organization will not disclose what compensation it receives from creditors, or how employees are compensated, go elsewhere for help.
9. What do you do to keep personal information about your clients (for example, name, address, phone number, and financial information) confidential and secure? Credit counseling organizations handle your most sensitive financial information. The organization should have safeguards in place to protect the privacy of this information and prevent misuse.
http://www.justia.com/bankruptcy/docs/debt-management-plan-must-do-list.html
Friday, October 19, 2007
Make bankruptcy your last option by learning all you can about how to keep creditors off your back and eliminate your debt in the shortest amount of t
Are you currently experiencing severe financial difficulties and/or considering bankruptcy? Maybe you have arrived at this site because you realize that high credit card interest charges are only driving you further into debt, or you are looking for information about how to stop persistent creditors and debt collectors from calling you at all hours of the day and evening, or youare simply searching for credit counseling information that will help you create a debt rudction plan and start getting out of nightmarish and overwhelming debt.
If you're struggling with debt, you're not alone. Millions of people live under the daily stress and pressures of being in debt. Recent research on the personal debt situation in America reveals that over half of all Americans use credit cards as a short term loan, and have at least one credit card that they do not pay off in full each month. This research also reveals that the average debt as a percentage of household income is around 8.0%, although for people earning less than $40,000 a year, this percentage is in the double digits. Other facts worth noting, are that the average interest rate charged by credit cards is 14.71% and the average household has more than $8,000 in credit card debt. An $8,000 debt at a rate of 18% interest will take more than 25 years to repay and cost more than $24,000 to service. The most recent Federal Reserve study showed that 43% of U.S. families spent more than they earned and that on average, Americans spend $1.22 for each dollar they earn. This leads over 1.5 million people to seek credit counseling or guidance for their financial situation each year.
Here you will find articles, tips and information about dealing with bankruptcy, credit counseling, debt consolidation loans, the consequences of filing for bankruptcy, ways to start taking back control of your financial situation, how to eliminate debt without going bankrupt, steps you can take to keep creditors and bill collectors off your back, what to say when you contact creditors, how to negotiate with creditors, how to avoid costly mistakes when using credit counseling services, bankruptcy law, your rights as an individual, and so much more.
If you can't find the information you are looking for here, please bookmark this site and visit us again soon, as we plan to keep adding new content on a regular basis.
http://www.credit-wz.com/bankruptcy/more-bankruptcy-articles.html
If you're struggling with debt, you're not alone. Millions of people live under the daily stress and pressures of being in debt. Recent research on the personal debt situation in America reveals that over half of all Americans use credit cards as a short term loan, and have at least one credit card that they do not pay off in full each month. This research also reveals that the average debt as a percentage of household income is around 8.0%, although for people earning less than $40,000 a year, this percentage is in the double digits. Other facts worth noting, are that the average interest rate charged by credit cards is 14.71% and the average household has more than $8,000 in credit card debt. An $8,000 debt at a rate of 18% interest will take more than 25 years to repay and cost more than $24,000 to service. The most recent Federal Reserve study showed that 43% of U.S. families spent more than they earned and that on average, Americans spend $1.22 for each dollar they earn. This leads over 1.5 million people to seek credit counseling or guidance for their financial situation each year.
Here you will find articles, tips and information about dealing with bankruptcy, credit counseling, debt consolidation loans, the consequences of filing for bankruptcy, ways to start taking back control of your financial situation, how to eliminate debt without going bankrupt, steps you can take to keep creditors and bill collectors off your back, what to say when you contact creditors, how to negotiate with creditors, how to avoid costly mistakes when using credit counseling services, bankruptcy law, your rights as an individual, and so much more.
If you can't find the information you are looking for here, please bookmark this site and visit us again soon, as we plan to keep adding new content on a regular basis.
http://www.credit-wz.com/bankruptcy/more-bankruptcy-articles.html
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