Easy Bankrupt

Is Bankruptcy The End Of The Road
When the modifications to U S Bankruptcy Code made it more difficult for people to declare bankruptcy and have debts forgiven, many consumer rights activists cried foul The credit industry worked hard to get this passed, and at first blush, it does appear to work against debtors . .On the other hand, the changes did debtors a favor in some respects By making it harder to seek bankruptcy protection, the new laws made it mandatory that those who might not need to declare bankruptcy go through credit counseling and enter a repayment plan if possible The changes also revealed just how desperate creditors are to keep your debts from being written off completely Armed with that knowledge, there are ways to avoid bankruptcy and right your personal financial ship . . .Pennies on the Dollar . .Everyone has seen or heard ads for law firms or other agencies that will work with creditors and settle your debts for virtually nothing This can happen, but there are some caveats One is that many such agencies are not reliable or trustworthy If they are full-fledged law firms, they will have some oversight from the state supreme court’s disciplinary counsel, as well as the local bar association Even so, be wary and investigate before signing on with anyone . .Further, these agencies collect your money for a time without paying your creditors Your accounts will get further behind while you pay them, knocking your credit score down nearly as much as a bankruptcy would If you are struggling to make ends meet but paying on time or nearly so, this is a fairly unpalatable option . .Finally, to the extent that these agencies do help, you may be able to do the same for yourself While some creditors are more willing than others to settle for lower dollar amounts, any of them would rather take something than nothing Thus, if you are already that far behind, you might try saving yourself some fees that would be charged by the agencies by negotiating for yourself . .Credit Counseling . .An adage that has been unfairly applied to lawyers is true in the area of credit counselors; 99 percent of them give the rest a bad name Class action suits against these groups abound, and internet message boards are full of angry stories A good credit counseling agency can help immensely . .The way such agencies work is to work out a payment plan with you based on what you can afford They then apply it to paying off your creditors based on preset rate reductions They are funded by the credit industry, which is a major turn off for some people However, the credit industry pays them to do something that helps the consumer; they help you pay your accounts off, at a lower interest rate than you might get otherwise . .Again, many of these agencies are unreliable, paying late or not at all Many creditors, upon your telling them you plan to work through a credit counseling agency, will try to talk you out of it for this reason When they do, listen You may be able to work out a better deal for yourself than the agency could The creditors want to be paid to the extent possible; they have no incentive to ruin your credit by forcing you into bankruptcy . .If you do decide to go through a credit counselor, investigate first Is the agency accredited? What complaints against them have been filed with the Better Business Bureau and how have they been resolved? Find a place you can trust . .Conclusion . .There are ways to avoid bankruptcy in most cases If you have lost everything with uninsured hospital bills, that is one thing Being behind on your bills and overextended on credit need not push most people over that edge Creditors want you solvent so they can collect something; you want yourself solvent so you can obtain credit again someday The U S government wants you solvent so you can contribute to the economy Look into your options and you will learn that you can usually find your way out of the bankruptcy hole before you hit bottom .
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How to Avoid Bankruptcy
Although bankruptcy offers some people a clean slate, it is by no means an easy solution. Bankruptcy will destroy your credit and may possibly force you to sell your assets. It could also affect your future employment. In addition, 2005 bankruptcy reform laws made it more difficult to file for chapter 7 bankruptcy, and limited other bankruptcy rights. If you want to preserve your credit, you will be much better off if you do whatever you can to avoid bankruptcy. Although it’s not easy, it’s worth the effort. Follow these steps to avoid bankruptcy. Total All Your Debts Only once you have a true picture of your debt can you take the next steps to avoid bankruptcy. Gather every bill, every statement, and every document that has an effect on your financial situation. Total up both your debts and your assets. Include your mortgage as a debt and the value of your home as an asset. Now break down those debts into good and bad categories. Good debts are home loans and student loans. Bad debts are credit card debts, personal loans, high-rate car loans, and medical bills. You should also list the interest rates and minimum payments for all your debts. Reduce Your Expenses Now total up all your expenses — everything you spend. Even the $1 you spend in the vending machine at the office should be included. Divide those two figures into necessities and non-necessities. Necessities are items you need to survive, like groceries and housing. Non-necessities are nice things to have, but which you don’t need, like that vending machine candy bar or designer sneakers. Add up the minimum payments on your debts and the monthly cost for necessities. This is the minimum amount you need to cover your bills for the month. If you don’t earn enough to cover them, then you need to find a way to reduce your minimum debt payments or necessities. Even little steps like switching from name brands to generics and canceling cable can help. If you can cover your monthly bills, but aren’t making enough to pay down debt, then start cutting non-necessities until you free up enough money to reduce your debt. Consolidate Debt If you have multiple small debts, getting rid of any one of them can be a challenge. By consolidating debt, you not only reduce the total number of bills and minimum payments you owe, but you also reduce the interest rate. So you can reduce your debt faster. In addition to consolidating debt, you can get out of debt faster by paying more than the minimum payment every month. Funnel as much money as you can towards your debt every month. Consult a Credit Counselor Contact a reputable credit counselor if you need help totaling your debts, finding ways to reduce expenses, or consolidating debt. In addition to teaching you money management, they can help you qualify for a consolidation loan, whether it’s in the form of a home equity loan or a personal loan. In some cases, they can help you set up a debt management program. Although there are fees, it may be what you need to avoid bankruptcy. Consider Debt Settlement If your debt vastly outweighs your income, then you may need to consider debt settlement. A credit counselor may be able to negotiate with your creditors to reduce the balance owed. Although debt settlement will ding your credit, it’s not as big a hit as bankruptcy. Debt settlement shouldn’t be taken lightly, but it is a way to avoid bankruptcy if you’ve exhausted all other options. No matter how you got into debt, you can get out of it without resorting to bankruptcy. Although there are situations where it’s the only reasonable option, it’s best for your credit and your financial future to avoid it.Justin narin has 5 years experience as a financial adviser; his key areas are loan consolidation, debt relief, mortgages etc. For more free articles and advice visit http://www.bills.com/avoid-bankruptcy/
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Faqs Bankruptcy Questions You Probably Have About Bankruptcy
Declaring personal bankruptcy is no laughing matter It’s a serious step that you will have to study carefully before making your decision, since filing Chapter 7 or Chapter 13 will affect your family’s finances for a long time to come That’s why this article will cover some frequently asked questions about bankruptcy . .How much does it cost to declare bankruptcy? . . .Well, at the time of this writing, the cost for Chapter 7 bankruptcy filing is $274, while Chapter 13 would cost you $189 Keep in mind this is only the court filing fee and does not include your legal fees . .Has the new bankruptcy law made it more difficult to declare bankruptcy? . .The new bankruptcy law passed in 2005 by Congress and signed by President George W Bush has made the process more complex However, contrary to popular misconception, bankruptcy is still available for many Americans who need help There are some changes such as mandatory credit counseling and having to go through something called a means test in order to determine your financial needs based on income and expenses This was supposed to keep people from abusing the bankruptcy process when they didn’t really need it . .Do you really need a lawyer to declare bankruptcy? . .Following up on the previous question regarding the new bankruptcy law, you have to understand the process has become more difficult You really need a good bankruptcy lawyer who has kept up with all the changes and can give you the best possible advice for your particular scenario Going it alone is really not a good option, and you should make sure that your attorney is paying attention to your needs and answering your particular questions Generic advice is not good enough . .There are many more questions that you probably have regarding bankruptcy, and you would do well to continue to research the process before visiting a lawyer This will help you become more informed so you can make better questions during your visit, and you may even save some money by not wasting time asking the most common questions Keep in mind that a lawyer charges by the hour, and saving money is a good idea if your situation is bad enough to consider bankruptcy .
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