Our Debt Settlement program handles everything for you. Be debt free as easy as 1-2-3! Enroll Now!

Archive for the ‘Bankruptcy’ Category

Handling Bankruptcy in the Family:

Friday, May 14th, 2010

One of the most common reasons for family arguments is money. This is especially true after the economy tanked and many people found themselves buried from very large debts. In fact, there are now many family members who have had to file for bankruptcy just to be able to feel some form of relief from their financial burden.

Of course, not every member of the family is able to properly handle a big financial issue such as bankruptcy. This is especially true for the heads of the family as they do not know how to act around the member who has some form of financial trouble. This usually leads to more trouble as the wrong acts of the family members would further add or compound the burden that the bankrupt person is feeling.

Here then are some tips for handling a bankruptcy in the family:

Implement spending changes:

In order to recover from bankruptcy it would be important for you to implement some spending changes. You have to put a curb on free spending and credit card debt so that you would be able to set an example to the financially troubled member of the family. Make them see the value of becoming thrifty and saving up for a rainy day.

Spending changes could include limiting credit card use or stopping the purchase of expensive leisure items.

Remind but don’t nag:

One of the reasons that family members fight over financial matters is because some heads of the family (usually the parents) can nag too much about the financial issue. Remember that your family members are already suffering from the burden of bankruptcy and nagging them about it will just frustrate them more.

It would be better to just remind them sometimes about things that they would need to think about (spending, budgeting, and other money matters) instead of nagging them.

Tags: , ,
Posted in Bankruptcy | No Comments »

Common Misconceptions about Bankruptcy:

Friday, May 7th, 2010

There had been a spike now in the number of people who are filing for bankruptcy. This is probably spurred on by the economic crisis and the large number of families that had been affected by it. In fact, you yourself may even be considering filing for one because of some combination of circumstances and financial issues.

Before you head over to the proper financial authorities to file your bankruptcy, it may be wise to read up on some of the common misconceptions about it. You may find out some false information about what you thought you knew about how filing for bankruptcy would affect your current situation.

Some common misconceptions about bankruptcy would include:

Filing for bankruptcy means you do not qualify for loans or other credit in the future:

This is actually a common misconception. Many think that once they have filed for bankruptcy, then they would not be able to loan any money anymore. This is a misconception because the truth is that you would still be able to get a loan in the institutions but with additional considerations.

The considerations would usually range from only being able to loan a small amount or having to pay in a shorter amount of time.  Also, the bankruptcy filing is not really a permanent mark on your credit records. It would last up to 10 years, so you could file for a loan again after the time has passed.

You have to have to be completely out of funds to file for bankruptcy:

Many think that bankruptcy only becomes their option once they are flat broke or are completely out of funds.

Actually, you can already file for bankruptcy even if you have still have some properties or cash. The state of New York for example, actually allows up to $2,500 in cash, funds in a qualified 401(k) plan, and even equity in cars.

Of course, the law varies from state to state so you should check on how the state that you are currently residing in qualifies bankruptcy.

Now that you have cleared up some of the misconceptions that you may have regarding bankruptcy, you should now consider your options better and see if it is truly suitable for your current financial situation.

Tags: , ,
Posted in Bankruptcy | No Comments »

Bankruptcy mistakes to avoid:

Tuesday, May 4th, 2010

When people think of bankruptcy, they often see it as a solution to their money troubles. However, they fail to take into account that filing for bankruptcy would only be effective if they are able to take the necessary steps before they file as well as after they have been approved.

When you make some mistakes regarding bankruptcy, you are risking compounding the problem and making your financial situation worse. That is why it would be important to avoid bankruptcy mistakes.

Some mistakes to avoid would include:

Filing too late:

Because of the common misconception that you need to be “flat broke” or completely out of money before you can file for bankruptcy, there are plenty of people who file theirs too late. This could lead to a lot of complications as you are already getting into deeper financial trouble before you tried to remedy it.

You must try to be aware of the bankruptcy threshold in your state so that you would know when you should already be considering filing for bankruptcy as one of your options.

Falling into Temptation:

One of the more common mistakes that people who have just filed for bankruptcy would often do is that they fall into the temptation of spending once again.

This usually happens for two reasons. The first is that once one has filed for bankruptcy, the person would sometimes feel that they have this new found financial freedom again. They feel that since their debt troubles have started the process of being settled, they can then spend some money again.

Another reason is that some credit card companies would approve credit card or borrowing applications just after filing for bankruptcy. This is based on the premise that they would not be able to file for bankruptcy again so they would not be such a high risk debtor.

When this happens, one may become tempted to go back to the spending habits that had led to the bankruptcy in the first place.

Tags: , ,
Posted in Bankruptcy | No Comments »

Alternatives to Bankruptcy:

Friday, April 30th, 2010

When people face problems regarding their debt, one of their most common responses would be to brush up on their bankruptcy laws in order to know how to file for one. While this is one legal way of solving their debt problems, they are actually risking that they become victims of the various after effects that filing for bankruptcy can give you.

That’s why before actually filing for bankruptcy, you may want to consider the alternative to it. These alternatives would help you in recovering from your debt without the risks that are normally associated with filing for bankruptcy.

Alternatives include:

Debt Consolidation:

As the name implies, a debt consolidation is basically combining all your debts into one single large account that has a lower fixed rate or interest than all the other debts. In short, instead of having to pay multiple creditors, you would borrow the money so that you would just have to answer to a single creditor. People would usually do this so that they would be able to control the interest rates of their debts.

Of course, it is predicated in the fact that you should be capable of paying a set amount every month, so that it would be able to work for you.

Debt Settlement:

You could also choose to go through the debt settlement route. In it, you would negotiate with your creditors so that they would accept a lower percentage of the whole amount as full payment for the debt. You would need to partner with a debt settlement company in order to be able to get into a debt settlement program.

To be able to apply for debt settlement, your debt would have to pass through some eligibility checks regarding amount and your capability to pay.

As you can see, bankruptcy is not the only solution or way out of your debt issues. There are various alternatives that you may use that would also help in relieving you from the burden of your creditors.

Tags: , , , ,
Posted in Bankruptcy | No Comments »

Lessons to be learned after Bankruptcy:

Monday, April 26th, 2010

When one files for bankruptcy, they can expect that their lives would turn into a completely different direction. The problem is that some people are not aware of it, and would not learn the necessary lessons to be able to prevent them from further money issues.

Sadly, there are a lot of cases wherein people who have filed for bankruptcy were not able to recover at all, and even made their lives worse. That is why it would be very important for you to learn these lessons so that you and your family would be able to adjust and hopefully become more financially ready in the future.

Spending:

The first lesson to be learned is to find out ways to be able to curb your spending. Most people who had to file for bankruptcy are those who were not fiscally responsible. They are the ones who were not aware of their spending probably because they just used their credit cards irresponsibly and did not realize that they were accumulating large sums of debt.

This time you should become more aware and try to stop spending more than you can afford. You should probably avoid all the extraneous spending for items that are not really necessary.

Emotions:

Another thing that you should learn after bankruptcy would be to keep your emotions in check. This is because your life would be quite different than what it had been before. Activities that you were able to enjoy, items that you were able to purchase, and even food that you were able to eat, would not be as available to you as it was when you still had more assets.

You should ensure that you and your family would understand this fact so that the bouts of depression or culture shock would be lessened when these realizations happen.

By learning and understanding these lessons, you may be able to find ways in order to lessen the impact of filing for bankruptcy would deal to you and your family.

Tags: , ,
Posted in Bankruptcy | No Comments »

Things that you may not know about Bankruptcy:

Wednesday, April 21st, 2010

Some people would turn to filing for bankruptcy when they are facing some difficulty in paying off their debts. They think that by simply going to the court and declaring that they do not have money or means to an income, then all their financial worries would go away.

What they are not aware of is that bankruptcy is not as easy as it seems.  Here are some Things that you may not know about Bankruptcy that are very important before you make your decision.

It comes at a price:

Did you know that you actually have to spend some money when you file for bankruptcy? Yes, this is because of the fees involved in bankruptcy namely court fees and legal fees. Court fees are quite small coming it at just around 200-300$. However for someone who is already in large amounts of debt, each and every penny would count.

The legal fee happens because declaring bankruptcy requires that you hire the legal services of an experienced firm or lawyer. This is because there are many intricacies and nuances in filing for such a claim that it can be quite confusing for any regular individual to do it on their own.

There are lasting effects:

Aside from having to pay a fee, another thing that shocks people about bankruptcy is the lasting effects that it has in their lives. This is because there are a lot of people who assume that successfully filing for bankruptcy is the final solution to their financial problems.

While this is partly true, one who files for bankruptcy should be aware that they would probably be blacklisted in major financial institutions so they would have difficulty in getting any monetary assistance. This hindrance from getting any form of financial could actually last for up to ten years,

As you can see, there are a lot of thing that you should know about bankruptcy before filing for it. This means that you should gain all the information that you can gather before deciding on any option.

Tags: , ,
Posted in Bankruptcy | Comments Off

The Different Types of Bankruptcy:

Sunday, April 18th, 2010

When people are facing huge personal debt and have realized that they have very little means to be able to pay for their unsecured debts, one of the options that they would probably want to understand more is Bankruptcy. Loosely defined, bankruptcy is a legally declared inability of an individual to pay its creditors. However, it’s not as easy as simply saying that you don’t have any money to pay anymore.

There are actually different types of bankruptcy. In the United States, there are actually three types, Chapter 7, Chapter 11, and Chapter 13. These correspond to the chapters in the US Law Code. Chapter 7 and Chapter 13 types of bankruptcy are usually related to individuals, while Chapter 11 is reserved for business entities.

Chapter 7 Bankruptcy:

When you file for Chapter 7 Bankruptcy, you would be subject to a “means test”. The means test determines your capability to pay off your debts through the liquidation of your properties. The actual liquidation would then be handled by a trustee and would sell the properties that have not been excluded from liquidation. Through it, you would be able to pay off all your debts and get some sort of protection from the court against any creditors’ collection harassment on you.

Chapter 13 Bankruptcy:

Chapter 13 bankruptcy is the other option for people who do not want immediate liquidation of their assets or properties. In this type of bankruptcy, the courts would set and monitor a payment plan between the creditor and the borrower.

Basically, the homeowner can keep his properties, but must make payments according to the court’s terms within a 3 to 5 year period.

Of course, there are some more nuances to the different chapters. These are merely just introductions on the two different type of bankruptcies that individuals can file for.

Tags: ,
Posted in Bankruptcy | Comments Off

The Lasting Effects of Filing for Bankruptcy:

Friday, March 26th, 2010

When people become unemployed, their primary source of income stops. This means that there would be a big change in the way that they spend as well as in the way that they pay off their debts. Unfortunately, not everyone is able to find employment after being let go by their employers. As such, there are plenty of people who are having difficulty in making ends meet and paying off their debts.

One of the ways that people have been trying to shake off their debts would be through declaring bankruptcy. The common belief is that through declaring bankruptcy, all off their previous debts would be called off. Because of this simple idea many have felt that it is their magic bullet to stave off their financial troubles.

What many don’t understand is that bankruptcy is not the be all and end all solution to money issues. Yes, there would be some relief from your debts (not every debt would be waived off), but there would be some lasting effects to it such as:

Lending companies not willing to lend you a substantial amount:

Bankruptcy would definitely make a significant impact in your credit score. The credit score is what lenders would use to determine how much of a risk you are when they give you a new line of credit. A very low credit score would mean that people may not want to lend you as much.

This could affect your housing or car borrowing plans  so you should think about these factors before filing for one.

Employment opportunities:

While you would not be fired from your job (if you have one) because of bankruptcy, it may be difficult to find one or to switch to a different company. This is because there are actually some professions, such as those in the banking sector and government sector who would be more discerning of someone who has filed for bankruptcy.

The reasoning behind it is that there is a certain amount of fiscal responsibility that is associated with those jobs and that filing for bankruptcy may reflect just how you would do well with money matters.

As you can see, bankruptcy is not some magical cure that would make all your money troubles go away, there are still plenty of lingering effects that it can do so it may not be the best option for you. You should try to open up to other avenues such as debt settlement, and just use bankruptcy as a truly last resort.

Tags: , ,
Posted in Bankruptcy | Comments Off