Credit card debt is a much discussed topic in both commercial and social circles. A big proportion of the population has has gotten itself into trouble with credit card debt.
The main reason for so many credit card related casualties is that many people don't understand the concept of credit cards correctly. They treat credit cards as free money. So all the discipline, which would otherwise have been exercised when spending hard-earned money, goes by the by.
Which means that people overspend and get into credit card debt. They keep spending till they arrive at the credit limit on their credit card. Some people treat it like a game and consider it a defeat (or consider their credit card under utilised) if they don't hit the credit limit quick enough. These unnecessary spends result in a state where they are not able to pay back their credit card debts and end up paying interest on the amount they owe.
This keeps increasing their credit card debt and they soon find that the interest constituent has become a standard feature in their monthly expenses and it is there even if they spend nothing on their credit card. That is credit card debt at its worst. Soon they find that their current credit card can no longer handle their needs and they commence looking around to get another credit card.
With the additional credit, they let themselves free again and follow a shop till you drop routine. In a little while the credit limit of the new credit card is reached as well and they again shirk on payments. This is how credit card debt accumulate.
torsdag 22 oktober 2009
onsdag 21 oktober 2009
Do You Know This Before Filing Bankruptcy?
Many people tend to believe that filing bankruptcy is the worst thing that they can do however I am here to tell you that you are wrong! I know that no one wants to file bankrupt however the truth is that it has given people a fresh start to life and get out of their financial difficulties.
However there are some benefits of filing bankruptcy and many people can use the fresh start that this provides. Before you decide to file you want to ensure that you hire the right type of attorney someone who is going to help you and make you feel like a person.
While you may be thinking that all attorney's are the same; the truth is that not all of them are qualified to do bankruptcies. From personal experience you want to hire an attorney that is not too busy and will be able to provide you with the personal time that you need. Most attorney's are overworked and therefore are unable to provide their clients with good one on one time.
Be sure to look at their walls and see what types of certificates that they are displaying. This is an important factor and can be used to judge whether the attorney is capable of filing your bankruptcy.
You will not be able to ask your friends and family who you should use; chances are they are not familiar with this type of lawyer unless they have filed before.
Be sure to ask questions even if you are not sure of what you are asking; they are their to support you and the attorney should always tell you what is happening. There is no reason for them to lie about anything when they are filing your paperwork.
The site below is dedicated to providing everyone information about filing bankruptcy. You will find some valuable tips and advice that anyone can use and you will also discover the pros and cons of filing bankrupt and how to get on with life after filing.
However there are some benefits of filing bankruptcy and many people can use the fresh start that this provides. Before you decide to file you want to ensure that you hire the right type of attorney someone who is going to help you and make you feel like a person.
While you may be thinking that all attorney's are the same; the truth is that not all of them are qualified to do bankruptcies. From personal experience you want to hire an attorney that is not too busy and will be able to provide you with the personal time that you need. Most attorney's are overworked and therefore are unable to provide their clients with good one on one time.
Be sure to look at their walls and see what types of certificates that they are displaying. This is an important factor and can be used to judge whether the attorney is capable of filing your bankruptcy.
You will not be able to ask your friends and family who you should use; chances are they are not familiar with this type of lawyer unless they have filed before.
Be sure to ask questions even if you are not sure of what you are asking; they are their to support you and the attorney should always tell you what is happening. There is no reason for them to lie about anything when they are filing your paperwork.
The site below is dedicated to providing everyone information about filing bankruptcy. You will find some valuable tips and advice that anyone can use and you will also discover the pros and cons of filing bankrupt and how to get on with life after filing.
lördag 26 september 2009
Take These Steps and Get Out of Debt
Although the economy is slowly emerging from the last recession, there are still several people, who are submerged in the pile of debts and by any means they simply want to get rid of that. One of the most common debts is the credit card debt.
Are you also one of those people? Then don't loose your hope, as you can substantially reduce or can even completely eliminate your credit card debt. Many of the people never know when their day to day small purchases added up to such a large debt that now it became a nuisance for them. Many of them never think once about the hidden costs, behind all the purchases, being charged upon them by the credit card issuing bank or any other financial institution.
The ideal way to get rid of the credit card debt is to pay the monthly installments. But as you know the ideal conditions have always been out of the reach of the common man. So, what are there options before you? In this case, you should consider giving a chance to the credit card debt relief facility for your own good.
The first and foremost step of the credit card debt relief is to stop using the credit cards right away. This will help you by not increasing the debt any further. Now, you have to have a definite plan to follow, through which you can eliminate your debt. Make a complete list of all of your debts and then sort them in a definite pattern. The most trustworthy sorting method is to arrange your different debt amounts in their descending order, i.e. put the least debt amount at the top of the list.
Are you also one of those people? Then don't loose your hope, as you can substantially reduce or can even completely eliminate your credit card debt. Many of the people never know when their day to day small purchases added up to such a large debt that now it became a nuisance for them. Many of them never think once about the hidden costs, behind all the purchases, being charged upon them by the credit card issuing bank or any other financial institution.
The ideal way to get rid of the credit card debt is to pay the monthly installments. But as you know the ideal conditions have always been out of the reach of the common man. So, what are there options before you? In this case, you should consider giving a chance to the credit card debt relief facility for your own good.
The first and foremost step of the credit card debt relief is to stop using the credit cards right away. This will help you by not increasing the debt any further. Now, you have to have a definite plan to follow, through which you can eliminate your debt. Make a complete list of all of your debts and then sort them in a definite pattern. The most trustworthy sorting method is to arrange your different debt amounts in their descending order, i.e. put the least debt amount at the top of the list.
tisdag 22 september 2009
What Is Medical Bankruptcy
The first misconception which needs clarification is that there is no such legal term as medical bankruptcy. Medical bankruptcy is one of the most commonly misunderstood things in medical field. What it actually means is that there is bankruptcy which a person had to file due to his inability to pay his medical bills. Elizabeth Warren, a Harvard professor, wrote recently that a study had shown that medical costs were a major factor in bankruptcy filings in the United States.
Most people believe that medical bankruptcy can be avoided simply by taking a medical insurance policy. But it is not always the case. Studies have shown that out of those who filed for medical bankruptcy, 78% of those cases have some kind of medical insurance when the illness began. This clearly goes on to prove that medical insurance or health insurance policy is not enough to protect you from bankruptcy due to medical bills.
Therefore, it is imperative that individuals do whatever they can to prevent themselves falling into this situation. Here are a few steps which one can take to avoid this situation.
The easiest and first thing which they can do it to take comprehensive health insurance coverage for themselves and their family. It is mentioned above that medical insurance may not be effective in all cases but if the coverage is comprehensive, it should be a great help in such emergencies. Even if the coverage is costly and you have to reduce spending somewhere else in your monthly budget, this is probably worth it.
Most people believe that medical bankruptcy can be avoided simply by taking a medical insurance policy. But it is not always the case. Studies have shown that out of those who filed for medical bankruptcy, 78% of those cases have some kind of medical insurance when the illness began. This clearly goes on to prove that medical insurance or health insurance policy is not enough to protect you from bankruptcy due to medical bills.
Therefore, it is imperative that individuals do whatever they can to prevent themselves falling into this situation. Here are a few steps which one can take to avoid this situation.
The easiest and first thing which they can do it to take comprehensive health insurance coverage for themselves and their family. It is mentioned above that medical insurance may not be effective in all cases but if the coverage is comprehensive, it should be a great help in such emergencies. Even if the coverage is costly and you have to reduce spending somewhere else in your monthly budget, this is probably worth it.
torsdag 10 september 2009
Ideas to Emerge Get Out of Debt
Supposing one wants to get debt free, youll have to read this article and make sure to go through the principles exactly. Finding debt freedom isn't simple. Much of people fail to accomplish it.
To get totally freedom from debt, you will need to achieve the steps below. This shouldnt be easy.
Finish the Problem
You desire to discover the first conflict. Debt is almost always started by a money issue. Look over your money and find the roots. The problem can be poor medical costs, credit card problems, cable subscriptions, books, college costs -- there are thousands of possible causes. Look which is unsubstantial and is causing the issue, and stop it with a debt consolidation loan.
Though it sounds easy, too many people cant grasp this basic concept. They squander months with bad credit.
Save Money
Supposing you do not place income aside, you wont ever get out of debt. Research a way to decrease your expenses.
Once you save money, focus too on earning cash.
Earn Money
You would earn funds besides achieving a boring career. Take all money you and push it towards your security.
It's not really complex. There always are a good number jobs open online if you browse well.
Have a Savings Fund
When you could set cash to the side, discover a savings stash. An emergency fund is funds for blindsiding situations. It is important for helping you out of debt.
Dont forget, getting debt free is extremely complicated, and it isnt simple.
To get totally freedom from debt, you will need to achieve the steps below. This shouldnt be easy.
Finish the Problem
You desire to discover the first conflict. Debt is almost always started by a money issue. Look over your money and find the roots. The problem can be poor medical costs, credit card problems, cable subscriptions, books, college costs -- there are thousands of possible causes. Look which is unsubstantial and is causing the issue, and stop it with a debt consolidation loan.
Though it sounds easy, too many people cant grasp this basic concept. They squander months with bad credit.
Save Money
Supposing you do not place income aside, you wont ever get out of debt. Research a way to decrease your expenses.
Once you save money, focus too on earning cash.
Earn Money
You would earn funds besides achieving a boring career. Take all money you and push it towards your security.
It's not really complex. There always are a good number jobs open online if you browse well.
Have a Savings Fund
When you could set cash to the side, discover a savings stash. An emergency fund is funds for blindsiding situations. It is important for helping you out of debt.
Dont forget, getting debt free is extremely complicated, and it isnt simple.
onsdag 9 september 2009
Credit Repair Is One Way To Save Money
As strange and ridiculous as it may sound, credit repair is important to save you money in any future purchases or loan applications that you may be making. The majority of the population misses a payment here or there, or is late on making a payment. This is not the end of the world, however, if it is done regularly your credit will be affected.
It is imperative to repair your credit if your credit score is suffering. The longer you keep it in its sad state, the longer it will take for you to obtain more credit that you might require in the future.
Like it or not, we live in a world that depends on credit. If you don't have access to a credit card, the chances of you renting an automobile or a hotel room are slim.
The good news is that you can do many things to repair your credit on your own. First, you should understand how credit rating works. It is sort of like a report card that judges the way you use your credit, the amount of credit that is at your disposal, the amount that you have acquired, the way you make your payments, and many more factors.
It is imperative to repair your credit if your credit score is suffering. The longer you keep it in its sad state, the longer it will take for you to obtain more credit that you might require in the future.
Like it or not, we live in a world that depends on credit. If you don't have access to a credit card, the chances of you renting an automobile or a hotel room are slim.
The good news is that you can do many things to repair your credit on your own. First, you should understand how credit rating works. It is sort of like a report card that judges the way you use your credit, the amount of credit that is at your disposal, the amount that you have acquired, the way you make your payments, and many more factors.
tisdag 8 september 2009
Some Tips On Debt Management
To avoid a lot of problems it is important to keep the debts at a level you can manage. In these days people are lending money quite easily even when it is could be avoided. Always ask yourself, am I lending money because I want to live a lifestyle that I can't really afford right now? In that case you should avoid it. Avoid enormous interest payments by lending as little as possible.
When we find ourselves having problems with debt, the first course of action is to take a look at the budget. Finding ways to cut back on unnecessary expenses can help us pay down debts and keep monthly bills current. But what happens when we can't solve our debt problems with budgeting?
A debt management plan can help you get out of debt faster, but it can also impact your credit. A note is added to your credit report stating that you are undergoing credit counseling. This means that you can't get new credit. However, the notation is removed once you've paid off your debts.
Some debtors turn to debt consolidation as an answer to debt problems. They transfer high-interest debts to a lower interest credit card, or they put up the equity in their homes to get the money to pay them off. While these options can provide lower payments, they are not without drawbacks. Closing numerous accounts and putting all of your debt into one account can negatively affect your ratio of debt to available credit, lowering your credit score. And if you use your home equity to secure the money needed to pay off debt, you're putting your home at an unnecessary risk
When we find ourselves having problems with debt, the first course of action is to take a look at the budget. Finding ways to cut back on unnecessary expenses can help us pay down debts and keep monthly bills current. But what happens when we can't solve our debt problems with budgeting?
A debt management plan can help you get out of debt faster, but it can also impact your credit. A note is added to your credit report stating that you are undergoing credit counseling. This means that you can't get new credit. However, the notation is removed once you've paid off your debts.
Some debtors turn to debt consolidation as an answer to debt problems. They transfer high-interest debts to a lower interest credit card, or they put up the equity in their homes to get the money to pay them off. While these options can provide lower payments, they are not without drawbacks. Closing numerous accounts and putting all of your debt into one account can negatively affect your ratio of debt to available credit, lowering your credit score. And if you use your home equity to secure the money needed to pay off debt, you're putting your home at an unnecessary risk
Can Debt Consolidation Help To Eliminate Your Debts?
You should be able to find several indispensable facts about debt solutions in the following paragraphs. If there's at least one fact you didn't know before, imagine the difference it might make.
Before we discuss our debt relief program with our debt settlement company it is important that we understand that debt consolidation is no magic wand that can eliminate our financial woes with our lenders and collection companies. The debt settlement services that these companies are only as good as long us we observe the time and discipline, and develop the patience in our effort to sort out our present financial mess.
Nevertheless, you should fully convince yourself about the debt consolidator before you sign up for debt consolidation. There are all sorts of people in the marketplace. A debt consolidation loan is one of the top tools when it comes to managing financial obligations. When helping to settle poor credit, bankruptcy and defaults which lead to derogatory credit circumstances, consolidating debt often calls for the skills and exposure of a debt expert.
måndag 7 september 2009
Do You Understand Chapter 13?
Many Americas were completely unprepared for the huge-scale downturn and financial crisis that is currently happening all over the world. Because so many Americans were unprepared and easy credit dried up, their expenses and liabilities quickly outstripped their ability to pay for their lifestyles. The financial crisis causes a tightening of credit all over, in turn leading to astounding increases in bankruptcy filings in the United States.
A Chapter 7 bankruptcy is what most people imagine when they consider filing for bankruptcy. Although a few items are exempt, most of the petitioners assets will be sold. Debts that are unsecured, like medical bills and credit cards, will be discharged, and other debts will be rescheduled for payment. However, the United States Trustee over Chapter 7 bankruptcies requires that a means test be applied. This would deny Chapter 7 relief to anyone making enough money that their claim might be abusive.
The alternative to Chapter 7 bankruptcy is a Chapter 13, which is known as a reorganization bankruptcy. It is called reorganization because it restructures the petitioners finances to arrange for eventual payment. It is a good option for people who have assets that would be liquidated under a Chapter 7 and want to keep them; it is also for people who have sufficient income to repay their debts with restructuring. Special protection is given to third parties such as a spouse or co-signer under Chapter 13 bankruptcies. Reorganization under a Chapter 13 plan take three to five years to be complete, whereas Chapter 7 discharges debts within just a few months.
A Chapter 7 bankruptcy is what most people imagine when they consider filing for bankruptcy. Although a few items are exempt, most of the petitioners assets will be sold. Debts that are unsecured, like medical bills and credit cards, will be discharged, and other debts will be rescheduled for payment. However, the United States Trustee over Chapter 7 bankruptcies requires that a means test be applied. This would deny Chapter 7 relief to anyone making enough money that their claim might be abusive.
The alternative to Chapter 7 bankruptcy is a Chapter 13, which is known as a reorganization bankruptcy. It is called reorganization because it restructures the petitioners finances to arrange for eventual payment. It is a good option for people who have assets that would be liquidated under a Chapter 7 and want to keep them; it is also for people who have sufficient income to repay their debts with restructuring. Special protection is given to third parties such as a spouse or co-signer under Chapter 13 bankruptcies. Reorganization under a Chapter 13 plan take three to five years to be complete, whereas Chapter 7 discharges debts within just a few months.
söndag 6 september 2009
Is Filing Bankruptcy The Best Choice?
Anyone who is experiencing financial trouble always wants to know if filing bankruptcy is the best choice for them and their family. While we are not opposed to people filing bankruptcy all that we want people to know is that there are other options that they can use as well.
We wanted to write this article because we wanted to alert people that even though filing bankruptcy may seem like the best way to get rid of their debt; the truth is that there are other ways that will help them save their credit.
1. Professional Advice: We are not financial professionals therefore we are not able to provide you with that much needed advice that you are looking for. However there are several financial professionals in your area who will be happy to sit down with you to tell you what your options are when it comes to avoiding bankruptcy.
We wanted to write this article because we wanted to alert people that even though filing bankruptcy may seem like the best way to get rid of their debt; the truth is that there are other ways that will help them save their credit.
1. Professional Advice: We are not financial professionals therefore we are not able to provide you with that much needed advice that you are looking for. However there are several financial professionals in your area who will be happy to sit down with you to tell you what your options are when it comes to avoiding bankruptcy.
fredag 28 augusti 2009
Low Cost Bankruptcies
If you want to save your money on filing a bankruptcy, the only expenses that may be lowered are attorney and application fees.
Chapter 7 Bankruptcy is as serious a bankruptcy there is. Once you are accepted for it your assets are sold off and most of the debt you have is eliminated. Chapter 13 Bankruptcy is a lot less serious in that all you are essentially getting is a consolidated loan with good interest rates, which is used to pay off all of your creditors.
Chapter 13 and Chapter 7 Bankruptcies aren't the only ones, they are just the most common. Chapter 11, for instance, is commonly used by corporate entities.
Chapter 7 Bankruptcy is as serious a bankruptcy there is. Once you are accepted for it your assets are sold off and most of the debt you have is eliminated. Chapter 13 Bankruptcy is a lot less serious in that all you are essentially getting is a consolidated loan with good interest rates, which is used to pay off all of your creditors.
Chapter 13 and Chapter 7 Bankruptcies aren't the only ones, they are just the most common. Chapter 11, for instance, is commonly used by corporate entities.
What A Mortgage Exactly Is
Do you know what a mortgage is? Almost everybody answers this question with a 'yes'. But the fact that you heard the term 'mortgage' before on television or somewhere else doesn't equal knowing what it really means to have a mortgage.
When you aren't able to continue paying for your mortgage the moneylender has the right to sell your house. This is the most important difference with other types of loans. Scary? Well it can be but your house acts as a collateral for the loan.
There are many different types of mortgages. Take a look at your situation and try to find the best mortgage for your situation. Especially the way interest is charged varies from form to form
Although there are a lot of different mortgage forms the most important differences are in the way the payments are build and the way interest rates can influence your payments.
When you aren't able to continue paying for your mortgage the moneylender has the right to sell your house. This is the most important difference with other types of loans. Scary? Well it can be but your house acts as a collateral for the loan.
There are many different types of mortgages. Take a look at your situation and try to find the best mortgage for your situation. Especially the way interest is charged varies from form to form
Although there are a lot of different mortgage forms the most important differences are in the way the payments are build and the way interest rates can influence your payments.
onsdag 26 augusti 2009
Do It Yourself Credit Repair
There is no quick fix, or easy solution for credit repair. Doing it yourself can save you lots of money, and hiring someone else to do it for you is supposed to be less stressful. The truth is no matter which way you fix your credit, it will not be fast, or easy.
While it is true that sometimes collection agencies are less willing to deal with people than with credit repair services companies. This is not always the case. Just remember that extra effort you are putting into repairing your credit is going to benefit you.
While it is true that sometimes collection agencies are less willing to deal with people than with credit repair services companies. This is not always the case. Just remember that extra effort you are putting into repairing your credit is going to benefit you.
måndag 24 augusti 2009
The Process For Getting A Mortgage
Purchasing a home is one of life's biggest financial and personal investments. The process of getting a mortgage can be complex. Before acquiring a mortgage, it is important to learn what the process involves.
A mortgage is a loan one acquires through a lender to pay for a new home. You will have to repay the loan with interest by making monthly payments for the term of the loan. If you do not repay the loan according to the agreed terms and conditions, the lender can foreclose on you and sell the home to recover the money you owe.
1. Choose the Right Mortgage For You: Before choosing a home, you should know how much you can afford. A mortgage calculator will help you determine the maximum amount you can afford. These calculators are available online and will give you a good idea about how much you will have to pay each month.
Choosing the right mortgage is essential to purchasing a home. There are a number of mortgages on the market so the choice depends on which one suits your needs. There are as many types of mortgages to select from as there are styles of houses to purchase. The two main mortgages are Fixed-Rate Mortgages and Variable-Rate Mortgages. Fixed-rate mortgages provide an interest rate that remains the same for the entire life of the mortgage. They have terms of either 15 or 30 years. Variable-rate mortgages, or adjustable-rate mortgages, provide rates that change according to the market conditions. Sub-prime mortgages are offered to people who have some credit problems.
Mortgage products can vary from lender to lender. It is important that you obtain a number of different quotes. Consulting with a financial adviser will help you find the deal that fits your particular financial situation.
2. Acquire the Mortgage: Once you know the purchase price of the home, you must secure the mortgage. There is a lot of paperwork involved with securing a mortgage loan. The lender will require your credit history, employment record and financial assets and liabilities. You will also need a home appraisal. Lenders can include: banks, credit unions, mortgage broker, or an online lender.
A mortgage is a loan one acquires through a lender to pay for a new home. You will have to repay the loan with interest by making monthly payments for the term of the loan. If you do not repay the loan according to the agreed terms and conditions, the lender can foreclose on you and sell the home to recover the money you owe.
1. Choose the Right Mortgage For You: Before choosing a home, you should know how much you can afford. A mortgage calculator will help you determine the maximum amount you can afford. These calculators are available online and will give you a good idea about how much you will have to pay each month.
Choosing the right mortgage is essential to purchasing a home. There are a number of mortgages on the market so the choice depends on which one suits your needs. There are as many types of mortgages to select from as there are styles of houses to purchase. The two main mortgages are Fixed-Rate Mortgages and Variable-Rate Mortgages. Fixed-rate mortgages provide an interest rate that remains the same for the entire life of the mortgage. They have terms of either 15 or 30 years. Variable-rate mortgages, or adjustable-rate mortgages, provide rates that change according to the market conditions. Sub-prime mortgages are offered to people who have some credit problems.
Mortgage products can vary from lender to lender. It is important that you obtain a number of different quotes. Consulting with a financial adviser will help you find the deal that fits your particular financial situation.
2. Acquire the Mortgage: Once you know the purchase price of the home, you must secure the mortgage. There is a lot of paperwork involved with securing a mortgage loan. The lender will require your credit history, employment record and financial assets and liabilities. You will also need a home appraisal. Lenders can include: banks, credit unions, mortgage broker, or an online lender.
fredag 19 juni 2009
Which Type Of Bankruptcy Is Best For You?
In the US there are essentially two ways to go through a personal bankruptcy. These two proceedings are known as Chapter 7 and Chapter 13 Bankruptcy and they are significantly different from each other.
Prior to October of 2005, going through a personal bankruptcy was a fairly simple and painless process. It did ruin your credit but it also allowed for a more liberal discharging of debt. In 2005, the law changed and is designed to provide an incentive to people to file under Chapter 13 rather than Chapter 7. For people with a steady income, Chapter 13 allows them to keep some property like a house or a car that they would otherwise lose in a Chapter 7 filing. Chapter 13 is a court approved "pay back" plan that can run for as long as five years.
Chapter 7 is known as straight bankruptcy, and involves liquidation of all assets that are not exempt. Exempt property may include automobiles, work-related tools, and basic household furnishings. Other property could be sold by a court appointed trustee or given directly to a creditor as payment of your debt. There is also a limitation of how much you can earn during this process. It is not designed for you to profit by not having to pay your debts.
Another difference between the two is the amount of time that must pass before you can refile. With Chapter 7 the waiting period is 8 years. With 13 it is two years.
While there are some similarities in the types of debt that can be discharged through either Chapter 7 or 13, there will be some differences as well depending on the state where you file. Most unsecred debt, garnishments, foreclosure notices and collection calls can be discharged through bankruptcy. However, child support, alimony, fines, certain taxes and student loans cannot.
Chapter 7 is a straight liquidation. Chapter 13 is a pay back plan. However, unless your plan satisfies all of your debt over the term of the bankruptcy, the Court usually will not allow the debtor to keep property like a boat, time share, recreational vehicles and the like. These items must be sold to meet the requirement to pay all the debt within the scheduled time.
Bankruptcy is no longer the slam dunk procedure that it was. The new law now requires that persons wanting to file either Chapter 7 or 13 attend an approved credit counseling course sometime within the six months before filing. This is another effort to solve the credit crisis without further clogging up the courts with another bankruptcy. In addition, there is now a "means test" for persons wanting to go the liquidation route. If the court believes that you make too much income to just walk away from the debt via liquidation, they will only allow you to file Chapter 13 which is the pay back plan.
The decision to file for bankruptcy can be a very emotional one and one that can cause a great deal of friction within a family. Don't make the stress greater by trying to do it yourself. Seek out a qualified bankruptcy attorney to guide you throught the process.
Prior to October of 2005, going through a personal bankruptcy was a fairly simple and painless process. It did ruin your credit but it also allowed for a more liberal discharging of debt. In 2005, the law changed and is designed to provide an incentive to people to file under Chapter 13 rather than Chapter 7. For people with a steady income, Chapter 13 allows them to keep some property like a house or a car that they would otherwise lose in a Chapter 7 filing. Chapter 13 is a court approved "pay back" plan that can run for as long as five years.
Chapter 7 is known as straight bankruptcy, and involves liquidation of all assets that are not exempt. Exempt property may include automobiles, work-related tools, and basic household furnishings. Other property could be sold by a court appointed trustee or given directly to a creditor as payment of your debt. There is also a limitation of how much you can earn during this process. It is not designed for you to profit by not having to pay your debts.
Another difference between the two is the amount of time that must pass before you can refile. With Chapter 7 the waiting period is 8 years. With 13 it is two years.
While there are some similarities in the types of debt that can be discharged through either Chapter 7 or 13, there will be some differences as well depending on the state where you file. Most unsecred debt, garnishments, foreclosure notices and collection calls can be discharged through bankruptcy. However, child support, alimony, fines, certain taxes and student loans cannot.
Chapter 7 is a straight liquidation. Chapter 13 is a pay back plan. However, unless your plan satisfies all of your debt over the term of the bankruptcy, the Court usually will not allow the debtor to keep property like a boat, time share, recreational vehicles and the like. These items must be sold to meet the requirement to pay all the debt within the scheduled time.
Bankruptcy is no longer the slam dunk procedure that it was. The new law now requires that persons wanting to file either Chapter 7 or 13 attend an approved credit counseling course sometime within the six months before filing. This is another effort to solve the credit crisis without further clogging up the courts with another bankruptcy. In addition, there is now a "means test" for persons wanting to go the liquidation route. If the court believes that you make too much income to just walk away from the debt via liquidation, they will only allow you to file Chapter 13 which is the pay back plan.
The decision to file for bankruptcy can be a very emotional one and one that can cause a great deal of friction within a family. Don't make the stress greater by trying to do it yourself. Seek out a qualified bankruptcy attorney to guide you throught the process.
About the Author:
Chris A Smith follows the consumer credit industry and reports on credit card law, credit reporting agencies, consumer bankruptcy, credit repair, alternative banking products and more. To find more details on bankruptcy and alternative plans, go to the popular credit site CreditFix
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