The bankruptcy code 523 is the clause which describes or lists the types of debts that cannot be included for discharge, even when you file for bankruptcy. These are debts that the person who files for bankruptcy will still have to pay regardless of financial circumstances.

Among the debts that fall under the bankruptcy code 523 are:

-    Education loans
-    Taxes and custom duty
-    Any type of credit that was obtained fraudulently
-    Any debt not listed under section 521 (1)
-    Funds obtained through embezzlement of any defalcation while acting in a fiduciary capacity
-    Alimony, spousal support or child support payments
-    Any willful destruction of anyone’s property
-    Fines, penalty or fee payable to the government
-    Monies owed for injury or death caused while driving under the influence of drugs, alcohol or any other substance
-    Funds payable following an unreviewable order or decree, or consent order of the USA

There are other items on the list. What the bankruptcy code 523 seeks to do is clarify all such debts that will not come under the general protection of bankruptcy status, where the Court automatically stays all debts.

Source:   What is bankruptcy code 523?

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If you are late by more than 30 days on your mortgage payment, the lender can declare the mortgage in default. When this happens, the owner of the house has two choices – either pay the mortgage amount due immediately or face a foreclosure lawsuit that would auction off his/ her home to recover the mortgage costs that were outstanding. If you are currently facing this scenario do not despair– you can stop foreclosure without bankruptcy declaration. In order to do this, the property owner must utilize the Chapter 13 clause, which allows the house owner some time leeway in which they could pull together resources in order to pay the lender.

Chapter 13 is a very powerful tool for people who wish to keep their homes – but it requires following stringent rules so the money due could be repaid in the court allotted time. The mere fact that you can stop foreclosure without bankruptcy is enough for most people to accept any conditions stipulated during the process. With that being said, it is best that you educate yourself on the stipulations of the Chapter 13 clause of the Bankruptcy Act so that you fully understand the process, the ramifications, the projected goal and the consequences of not meeting the specified deadline. In most cases, at least a consultation with a qualified professional is recommended.

Source:  You can stop foreclosure without bankruptcy – did you know this?

The cost and process of voluntary bankruptcy differs very much from that of an involuntary bankruptcy. Before you decide to make use of this legal proceeding, you need to understand the pros and cons of such process. Each state has its own rules, so ensure that you do sufficient research and weigh your options carefully. Bankruptcy follows filers for a very long time and is not a process that should be undertaken haphazardly.

If approved, the court would then decide what assets would be sold to enable the creditors to recover whatever possible of their outstanding debt; and what assets would be protected under a clause known as “minimum livelihood necessities.” Voluntary bankruptcy is a double-edged sword to be used with extreme caution. It is best to seek the advice of a well- qualified, experienced attorney to guide you through understanding the process before you decide to file for voluntary bankruptcy.

Source: What is voluntary bankruptcy?

While it is a good idea to educate yourself on matters regarding bankruptcy, you might not be able to learn all that there is in the short time you have to present your case to the Court. The bankruptcy consultant will provide you with invaluable insights on how best to help and prepare yourself while filing for bankruptcy- both before, during and after the case is closed. There are even instances when the consultant can point you to methods that will possibly prevent you from filing for bankruptcy altogether.

The bankruptcy consultant is normally able to provide you with superior debt management plans that can lead to elimination or great reduction of your debt. The consultant will also be instrumental in helping you restore your credit score and records.

Source:  Bankruptcy Consultant – Your SOS response

Under the Chapter 11 bankruptcy code, the debtor will remain in possession of the company; while the trustee gains the powers to re-structure the company and redirect it towards financial freedom. The debtor is empowered by the Court to accept or reject any new contracts. The debtor also has the freedom to look for and obtain loans or other means of financing that would be required to salvage the company.

During the imposition of the Chapter 11 bankruptcy code, the debtor is protected from litigation and creditors as it enjoys a Court ordered stay against debt collection.

Creditors in such cases, however, can file against the invocation of the Chapter 11 bankruptcy code by the company and demand payment. The Court would then hear the complaints of the  creditors and rule whether the restructuring of the company can solve the present financial crisis to cover all debts. If the court determines that the company should be allowed to recover financially, it would then order the creditors to stop collection attempts.

Source:  Chapter 11 bankruptcy code – What is that?

Myth – If you have a job you are not eligible to file for bankruptcy.
Truth – The US Bankruptcy code specifically says that you should have a job to be eligible to file     under Chapter 13.

Myth – You cannot include medical bills under bankruptcy
Truth – All unsecured debts are dischargeable under bankruptcy and that includes medical bills,     credit card bills, personal loans, and so on.

Myth – You have to repay your debts in full when you file for bankruptcy under Chapter 13
Truth – Chapter 13 under the US Bankruptcy Code advises repayment of debts that range from     0% to 100%. The actual percentage is always dependent upon your financial history,     priority of debts, your present property and the value of your disposable income.

Myth – When you file for bankruptcy you lose everything you have; you are literally left with     just the clothes on your back
Truth – As many as 95% of the bankruptcy cases filed do not cover a number of assets and hence     the debtor keeps them. An attorney would be able to help with salvaging a good portion     of assets.

Source:   Bankruptcy Myths Exploded For Your Benefit

It is not as simple as it may seem to file for bankruptcy. Bankruptcy court cases can be real nightmares, unless you are thoroughly prepared for the fight, which there will undoubtedly be one. Also, unless you know all of the legalities of bankruptcy, you may not be able to save your personal property while in the process of declaring bankruptcy.

In order to safeguard against such a devaststing crisis it is strongly advised to seek legal advice from bankruptcy court case professional. It is important to view the costs as a necessary expenditure on your way to financial prosperity. In the long run, with the help of such expert advice you may be able to save much more of your property and have a more favorable outcome from your bankruptcy court case.

Source:  Bankruptcy Court Cases – The Risks Of Filing

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The person who is filing for bankruptcy should be aware that court ordered payments such as alimony, child support and maintenance are also exempt from protection under bankruptcy rules. If in your particular case there are any of the aforementioned debts, it would be best to consult a lawyer regarding the best way to proceed under the circumstances. It is important to be aware and fully understand all the exceptions that Bankruptcy Code 523 allows for while filing for bankruptcy.

In many cases, after consulting with lawyers, filing for bankruptcy does not seem as much of a financially sound planas it had before. It is important that you educate yourself regarding the Bankruptcy Code 523 before taking this drastic step. The financial implications affect your stability now, as well as, in the future.

Source:  Bankruptcy Code 523 – Exceptions To Discharge Of Debts

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The lawyers too, would charge one fee, as he/ she would be defending only one case instead of the two cases for each of the individuals in the marriage. This clause is also highly beneficial when the majority of the debts of each individual are common to both spouses.

In the event one spouse does not agree to file under joint bankruptcy, the non-filing spouse could be protected from collection attempts as long as the filing spouse qualifies to file under Chapter 13 of the US Bankruptcy Code. The non-filing spouse could invoke the co-debtor stay under Section 1301 of the US Bankruptcy Code.

Source:  The Special Considerations Of Joint Bankruptcy

To enjoy the benefit of the Chapter 10 bankruptcy clause, the company would have to allow the Court to review its current financial condition without any limits. It would also have to accept the recommendations to reorganize itself as per the advice of the manager appointed by the Court to clear its current debt issues. The Court would carefully examine the situation and if it feels that the company is salvageable – in other words, it is possible with the help of reorganization to come out of debt, it would grant the company protection from debtors under the Chapter 10 bankruptcy clause.

Until the debt is cleared the manager would be the link between the company and the Court. The manager would also continue to have full jurisdiction over the operations of the company until the financial matters are resolved.

Source:  Chapter 10 bankruptcy – What is this?

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The Disadvantages

-    If one spouse filed for bankruptcy earlier he/she cannot file under joint bankruptcy
-    If the husband-wife combined debt exceeds the limit permissible under Chapter 13, you cannot file under joint bankruptcy

The Advantages

-    Saves money on legal counseling fees
-    Each spouse can file for personal exemptions and thereby protect more assets together
-    Collection agencies will not hound one spouse with requests for payment
-    Easier to file for joint bankruptcy than to file separately

Review information carefully for all the advantages and disadvantages of filing bankruptcy through online research. You may find that many terms are different depending on where you live. You also need to contact a bankruptcy expert to receive case specific advice about your financial situation. Be careful when you make this decision since this will affect both spouses credit reports. Your decision should take into account your goals, assets, future financial obligations and the affect this decision will have on both spouses as well as any children in the family.

Source:  Joint bankruptcy – Is this a Good Idea?

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Filing bankruptcy in Oregon is a good option if any of the following statements apply to you:

-    Your bills are too long overdue and you do not have any concrete plans or ability to get any additional income to pay these bills
-    You are unable to pay your mortgage
-    You are unable to make even the minimum payments on your credit card balances
-    You have lost your primary source of income/ job and you do not see an ability to get a new source of income in the near future
-    You have suddenly incurred a huge medical expense

The following debts/ payments due/ financial obligations will not be covered/ exempted when filing bankruptcy in Oregon:

-    Student loans
-    Child support and alimony
-    Fines imposed by the Oregon government
-    Cash advance made within 90 days

Source:  Filing bankruptcy in Oregon – The Pros and Cons

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First of all, not everyone will qualify for bankruptcy. After the bankruptcy laws were amended in 2005, there were many sub-clauses (for example, Chapter 7) that would give consumers the ability to redress their debts without filing for bankruptcy.

Monetary Implications Of Bankruptcy

Before you file for bankruptcy you will need to undergo bankruptcy credit score counseling 180 days prior to the bankruptcy filing. You will also need a certain amount of expert legal counseling that may cost you anywhere between $1,000 to $2,000. Bankruptcy is definitely not the cheap alternative, even when you have reached the absolute rock bottom with your finances.

Credit Report/ Score Implications Of Bankruptcy

This is one of the most significant implications when filing bankruptcy as this will remain visible on your credit report to financial companies, employers and anyone else who requests your  credit score report. It will take 11 years before this is removed from the report; and that is a very long time.

It is possible to improve your credit score over time with proper financial discipline and smarter financial choices. However, this a very arduous process and can have lasting effects for years to come. You must always keep in mind your financial goals and the timetable for reaching those goals before deciding which course of financial relief to utilize.

Source:  Implications Of Bankruptcy – Is This Freedom From Debt Worth It?

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1.    Student loans – This loan is not covered by bankruptcy solutions. Hence, if you are in trouble due to your student loans and declare bankruptcy in the hope that this will solve the problem, be aware that this is not true. You will still be liable to pay the student loan back and you will have the report of a bankruptcy on your credit report for the next 11 years. In order to seek relief for student loan payments you should contact your lenders and try to renegotiate the terms of your repayment. Some options are an “income- contingent” repayment plan as well as temporary forbearance.

2.    Child Support -  This is another field that will not fall under the relief of bankruptcy. In the eyes of the law this debt is not going to be relieved without your actual payments. Child support and alimony are not considered debts as much s they are considered financial obligations that do not warrant bankruptcy relief.

3.    Criminal fees/ fines – No bankruptcy solutions will delete criminal fees or fines. Hence, declaring bankruptcy will not resolve such issues. Again, this type of debt is considered unforgivable and thus must be paid by the individual. You can attempt to enter into a new repayment plan but often times you must show the court extreme financial hardship in order to qualify for a change in repayment terms.

Source:  Bankruptcy Solutions – What Is Not Covered Under This Umbrella?

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Just like a doctor would advice a patient on what has caused them to become ill so they will not get sick again; debt counseling teaches you how to manage your money so you will not fall into trouble with your finances again. It is very important that you understand the why before you can appreciate the solution. You are less likely to abuse your available credit if you understood how the bulk of smaller purchases compounded the large debt you accumulated.

Debt counseling also teaches you how to use your finances to increase your credit score and much more, such as:

-    How to save for an emergency fund
-    How to find the best interest rates
-    How to make and stick to a monthly budget
-    How to find the best health/ home/ auto insurance quotes

… and much more. Debt counseling is a priceless gift – make sure you value it as such.

Source:  When Debt Counseling Is Needed?

Go to a library and review law books regarding financial matters or visit the website of any of the credit bureaus in order to educate yourself on how a credit score is calculated. You need to be informed as to what goes into your credit report and how long those inputs affect the credit score calculations. Stop relying on misinformation. Stop hoping for miracles. Stop inviting trouble.

Once you are aware of the law, it is nearly impossible for you to fall victim to such gimmicks. However, if you still hope against hope that everything they advertise can happen, then you are asking to be cheated out of your hard earned money. Mistakes with finances and your credit score can prove not only to be devastating; but can also be criminal.

Be aware that credit repair fraud happens because you close your eyes to the truth. Repairing your credit legally might be slow – but from a common sense approach- this is the only you should go.

Source:  Credit-repair-fraud-–-are-you-asking-for-it

1.    Debt counselors – These are the agencies who have answers to all your debt questions, including the “where do I go for credit now?” one. Debt counselors can put you in touch with experienced debt consolidation agencies, credit repair agencies  and poor score credit lenders. Debt counselors are the leaders in guidance when you want to  eliminate your outstanding debts.

2.    The Internet – Use the Internet as your main ally. You will find  answers to many of your debt and credit lender questions with a google or Bing search. With the help of the data on the internet you can figure out which are the lenders that offer the best rates and how best you can negotiate for these rates.

3.    Your old creditors – Most of the time, old creditors are willing to renegotiate your debts so you can pay them off and even reestablish lines of credit with them. Open communication  with previous creditors and show why you need their cooperation in order to get your financial matters in order.

Source:  How do you find poor credit lenders?

1.    Wasting your money – Loans for individuals with low credit scores are available, true. However, these loans come at a price- higher interest rates. This means you actually use more of your hard-earned money in order to pay back the loan. This extra money could be used to purchase something else or put towards retirement savings.

2.    Always under scrutiny – A poor credit score says tells the credit bureaus that the person is someone who cannot handle finances responsibly. This makes creditors wary and you will always be under greater scrutiny. You will also need more collateral and/ or a co-signer when applying for a loan.

3.    You cannot make a mistake – High scorers can skip payments infrequently and be forgiven, but not a consumer with a low credit score. Many creditors panic if a low credit scorer misses a payment or shows any deviation of the repayment terms. In response, the creditor  can alter the terms of your agreement by raising your interest rates.

Source:  Why do you need to increase your credit score?

Are you in debt and lost in a financial maze? Are you suffocated by unpaid bills? Are you hounded and harassed by collection agencies? You can put a stop to these stressful situations by utilizing the help of the Fair Debt Collection Practices Act. Research the Fair Debt Collection Practices Act or go to an attorney and seek help. Not only you will find ways to get relief from the undue harassment from the collection agencies, but you will also find direction and advice on how to seek appropriate help to repay these debts.

Source:  Fair Debt Collection Practices Act Is For Your Protection

Many people who have gone through bankruptcy have bounced back financially; some have even become multi- billionaires, such as Donald Trump. Look around you and you may find plenty of examples of people who have turned their lives around because they have tasted the bitter pill of bankruptcy.

Use the post bankruptcy period to dissect the past and find out what went wrong with your finances. Understanding your missteps will enable you to avoid repeating them. Avoid the pitfalls that led you to bankruptcy in the first place and you can rebuild your life again – slowly, but steadily.

Source:   Credit Report After Bankruptcy Is Bleak – But There Is Still Hope For You

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So what do you get to keep after you file for bankruptcy? Each state has its own exemptions list. In many states you are permitted to choose between following either the State or Federal law; in some states you are forced to follow the state laws in exclusivity.  The list of bankrupt exempt property varies widely from state to state and from federal regulations so be sure to research applicable laws when you consider filing for bankruptcy.

Consulting with an attorney experienced with the bankruptcy laws will prove to be the best decision you can make. It is very easy to trap yourself into  losing assets you could have otherwise protected. A bankruptcy attorney can also recommend which paths allow you to salvage more of your financial security.

Source:  Bankrupt Exempt Property – What Is That?

As part-time work, this can be quite rewarding both financially and on a more personal level. You will be helping people in a desperate situation as well as turning a profit for yourself. Using a consultant is a feasible alternative for someone who is intimidated by financial attorneys or simply can not afford one at the moment. It is also a great way for someone to gauge the severity of their financial situation and find less devastating alternatives.

Bankruptcy training can be beneficial to anyone running a business. It is good to know what rights you have and what responsibilities are coming your way. In case you run into rough weather financially, you could refer to the information you were taught during the training and do your best to salvage your business and assets.

Source:  Get Bankruptcy Training And Start A Home Business

-    Raise the money through a loan obtained with joint collateral. To use this option you will need to find someone who would be willing to co-sign a loan with you, with one or both of you putting up collateral to raise the required money.

-    You could sell a portion of your business to raise working capital. Many times, all that is needed is a small fund to roll the business. Try selling part of your assets and raise the needed funds.

-    Enter into a partnership to raise the required funds. The idea of a joint venture can look very lucrative to an investor who wants a share in your ailing company if you can show that in the future there is the potential for profit sharing.

There are many more alternatives; some easy and some not so easy. Finding alternatives to bankruptcy is well worth the time and effort.

Source:  3 Great Ways To Settle Debt Without Bankruptcy

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Before answering this question, you need to understand that there are many types of articles available on the internet. Some are quite accurate and up-to- date – you will find these on Government portals and reputed credit repair agencies; some are general and informative and may or may not be updated as changes are made to laws or even reflect discrepancies based on the state in which you live; while some are written only to  attract traffic with keywords – these are usually not very accurate.

How do you know which are the bankruptcy articles you can trust? Here are some guiding points:

-    Date of the article and website
-    The sources quoted for the articles
-    Type of article – usually sales/ marketing oriented articles tend to highlight the points that help selling/ marketing
-    Expertise of the author
-    Government websites are usually the best sources for informative bankruptcy articles

Source:  Bankruptcy Articles – Is The Information Accurate?

It is best not to assume anything in such a situation, take the case to an experienced bankruptcy attorney who will look into all the facts before advising you on a proper course of action. Do not cut corners when it comes to bankruptcy. Bankruptcy has lasting repercussions for years to come.

It is a good idea – if one of the spouses runs a company or any type of commercial endeavor – to clearly separate the personal and business finances. This is especially important, in the event of something going amiss, so the bankruptcy clauses will not affect the other spouses financial security.

Plan for the business going under even when it is doing well. In today’s economy, a business that is thriving one month can find itself suffering financially the next.

Source:  Bankruptcy And Marriage Can Be Messy

1.    Never leave the ATM stubs in the ATM booth. If you do not need it, tear it into tiny pieces or run it through a shredder. Do not throw it away merely crumpling it into a ball. This can be picked up and used for identity theft by experienced criminals. If you do not plan on taking the receipt with you, there are machines that give you the option to not have the receipt printed. Check your balance and the screen and skip the printed receipt.

2.    Never give your password or any other information pertaining to your bank accounts over email or phone, especially if you have not initiated the contact. In case you are contacted by anyone (either through email or phone) ask them their name and address and offer to come in person and give the required details. If they claim the matter is urgent and they are from your financial institution, take their information and inform them that you will call or go in person to your local branch. If you are discouraged from doing so or the person insists- a red flag should go up in your mind. Immediately end the conversation and report it to your financial institution. If you feel that you may be falling victim to identity thieves- file a police report.

3.    Never throw any bills in the garbage without shredding them first. Buy a shredder that cuts paper into small diamond shapes as opposed to merely shredding them in strips.  Identity theft criminals go through the waste and can pick up valuable information from bills. They can go through great lengths to obtain your vital information. Make the process difficult. It is also a good practice to split the garbage from your shredder into two or three bags and dispose of them over several days.

4.    Request that all bills and alerts be sent by email. This way you will avoid the risk of having someone going through your mail and picking up sensitive financial information. Be aware of when bills are expected to arrive. If you find that your bills are not arriving or arrive damaged, that can be a sign that someone else is viewing your information.

Source:   4 Ways To Prevent Identity Theft

Here are a few things that you need to remember before you think of settling your credit card debt:

You might find it difficult to settle your credit card debt as the lender will only agree to settle debt on your current account. You must default on your payments for three months before settling the debt. You need to convince the creditors to settle the debt by giving a valid reason for not being able to pay.

You cannot eliminate your entire debt amount with the help of debt settlement. The creditor will approve the reduced amount with your consent. The amount discharged will be contingent upon your financial state and on your negotiation skills.
 
Your credit card settlement will partially affect your credit report. Your credit report will display “settled for smaller amount” or something similar. Such statement might create impediment for future loans. Therefore, think about your decision before taking debt settlement service.

Is credit card debt settlement beneficial?

If you settle your credit card debt then you can save a considerable part of the outstanding amount. In certain cases, you can save 50% or more on your principal balance. Unfortunately, your debt relief program cannot save such a huge percentage. Bankruptcy can discharge a large amount of debt but it will not be a feasible option for you.

The effect of credit card settlement does not remain on your credit report for long as it can be repaired gradually.  But bankruptcy completely blemishes your credit report and remains on your credit history for 7 to 10 years.

The negotiation process takes a minimum of 180 days and within a few months you can settle your credit card debt. If you can pay in a lump sum, then you can free yourself from the clutches of debt within a year.

So, settlement can help you to regain your financial independence. But next time use your credit card wisely so that you do not fall behind in credit card payments.

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1.   Use the Internet – Nothing is more powerful than the Net when seeking information. The internet enables you to tap into financial institutions in your local region or state, as well as, into the financial market across the nation.  Conduct internet searches and investigate financial institutions before divulging sensitive financial information.

2.   Talk to people – You are neither the first nor the last person on this earth who suffers from a poor credit score. Talk to people who are more financially sound and seek their advice on financial habits. Use their experience to guide you to financial health.

3.   Consult a credit repair agency – Many credit repair agencies offer assistance and financial guidance for loans. Find out whether your credit repair agency does too. If not ask for references; you may find a great poor credit lender already being used by one of your friends or family members.

Source:  Poor Credit Lenders Are Plenty – Do You Know How to Find the Best

You will hear a lot about debt negotiation during the credit repair process. What is the role of this type of negotiation and why does it get so much importance? You will agree that every cent saved is a cent earned, right? Well, that is the answer.

When a credit counselor or agency negotiates your debts, they ensure that you are charged the minimum possible both in interest and in fines (and penalties for late payment). This means a drastic reduction in the size of your debt; which in turn means that it would be easier for you to repay the loan.

You can do debt negotiation on your own; but most people prefer professionals to do this job because it does require the special skill of effective confrontation and a talent for getting your opponent to agree to your proposition. The more money you are able to save the better it is for your financial outlook. So, can you see the importance of financial negotiations in the process of credit repair?

Source:  The Role of Debt Negotiation in Credit Repair

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Counseling is a tool to help you analyze why you are not able to maintain financial discipline. Counseling will also help you identify major financially devastating habits as well as showing you how to manage your money more effectively. Without adequate debt counseling, credit repair solutions might just be temporary fixes to a more complicated underlying problem leading to chronic financial instability.

Source:  Why Debt Counseling Is The Key To Credit Repair?

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Do not ignore general money issues no matter how small they are. Take action immediately when you find that you cannot pay a bill on time, or that you rely on credit cards too much. Take measures to straighten up your finances before the problem snowballs into a disaster.

You will be amazed to know that 8 out of 10 people who file for bankruptcy had trouble with their finances right from their teens. It takes years, sometimes decades for the bad habits with finances to develop into bankruptcy. DO NOT wait that long to realize you have a problem; take action when the first general money issues catch your attention.

Source:   Watch Out For General Money Issues – It Could Lead To Bankruptcy

Just about 5-6 years ago, credit repair scams were quite common. People were head over heels in debt and charlatans came crawling out of the woodwork to trap these desperate people into terrible fraud schemes. The Credit repair industry was held responsible as a whole and people suddenly feared this service and shunned it.

Credit repair frauds happen even today. However, people are less gullible because awareness is better today and because most respectable and legal credit repair agencies now belong to some nationally reputed regulatory bodies (such as BBB or ECRA), which ensure that ethics are applied in every dealing.

Even so, you need to be aware that scammers are still out there lying in wait for opportunities to steal your money. Their bait is always an offer too good to be true at a time when you need it the most. If you are ever offered something that does not seem possible – watch out you could become a victim of a credit repair scam.

Source:  Watch Out For Credit Repair Scams

Money management is the art of managing your living expenses within your income. For most people it can be difficult, for some impossible. You will be surprised to learn that debt, money mismanagement and financial insecurity has little if anything to do with the amount you earn.

For those who do not practice good money management principles, no matter how much they earn they would still run short. For those who appreciate and follow these principles, no matter how little they earn they tend to manage and prosper.

If you constantly feel that “if I had more money I would have done better,” it is time you learn about money management and how to apply it to your life. This is because your predicament has nothing to do with the money you earn and is realistically more about the money you spend.

Start by making a budget, consulting a finance professional and genuinely looking at the bigger picture. The solutions are often surprisingly simple to grasp and apply.

Source:   Why Money Management Is Important?

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Are you in debt? Do you feel lost and unable to cope with spiraling debts no matter what you do? Do you feel that bankruptcy is the only thing that can save you? STOP. Change your way of thinking in order to change your financial future. Yes, bankruptcy can put an end to all your debts, but the price tag for a debt free life is huge.

It is much better to look for money and means to get your debts paid off than to consider filing for bankruptcy. When you take this step, it should be the last possible avenue for you. It can take as long as 11 years for bankruptcy to be wiped off your credit report and as long as it is there, you will be offered incredibly high interest rates for any loans for which you apply. In the end, you pay far more than your original debts.

Remember these two golden rules: (1) do not get into debt; (2) when you get into debt, pay it back before it becomes unmanageable. Your life will be better for it.

Source:  Watch out for bankruptcy – it can ruin your life!

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Some of the matters that amount to bankruptcy fraud are:

Concealing valuables/ property/ anything of value that can be used to facilitate the payment of the outstanding dues
Knowingly concealing information about secret dealing and contracts that provide “on-the-side” (un-declared) income
Transferring/ buying property in the name of your spouse, just so it will not be absorbed into the bankruptcy listing as assets

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One of the most popular bankruptcy myths is that you can start with a clean credit slate. Nothing is further from truth. You will in fact, carry the stigma of being a risky investment for 10 long years once you have filed for bankruptcy.

Another popular bankruptcy myths is that all your debts will be discharged after the filing. Again, the truth is different. Certain debts such as alimony, child support and student loans do not come under the purview of the bankruptcy filing.

Another very dangerous bankruptcy myths is that if one’s spouse files for bankruptcy, the other will not be affected. Wrong – if there are joint accounts, it will affect the spouse.

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Why should your credit report after bankruptcy be important anymore? You might not think you have anything to worry about regarding debts and payments once you have filed for bankruptcy and the deed is done. After all, you will wear the “mark of the beast” for the next 10 years – so what the heck, what is there to see any more?

But this is a wrong-headed approach. There’s plenty to see and check on your credit report after bankruptcy is filed. For one, you need to know that the date is entered correctly. A lot can change in legalities regarding your property and debts based on that date.

Second, you should check that ALL your debtors have been included on your credit report after bankruptcy. It should not happen that you get one or two old creditors beating at your door even after bankruptcy has been filed, just because they were not included.

Most people if asked will reply that they know the real implications of bankruptcy. One direct outcome will be that obtaining loans will become very difficult. Another will be that the interest charged for any loans will be ridiculously high. A third aspect will be that obtaining a credit card will not be as easy as it was previously.

These are a few very obvious implications of bankruptcy. However, there is more to it; factors and outcomes that do not show immediately. For example, relationships with friends and relatives may suddenly become strained. There will be stress on the employer-employee relationship; there could even be the danger of job loss. You will not be able to start a business until the bankruptcy is removed from your credit report.

Therefore, beware of the hidden implications of bankruptcy. This might not seem a bright idea, once you have a glimpse of what all you will tend to lose.

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The method by which you can settle debt without bankruptcy has three steps:

1.Suspend payment to your creditors for a few months and pile the money into a saving account under the guidance of a reputable debt negotiation agency.

2.Let the credit repair agency take over. The moment you stop payment you will invite hounding collection on behalf of your creditors. Let your agency handle it.

3.The third step of settling debt without bankruptcy is to negotiation for better terms. Normally a agency will have experts negotiators who will be able to cut your outstanding loans by as much as 40-60%.

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Find a person who will be willing to lend his good name (his or her credit score should be high and his credit report impeccable) as a co-signee to your loan.  His assurance to the bank or financial institutions will indicate that he will make good on the loan in case you fail to do so.

Beware that default payment involves far more than repayment in such cases. The credit score and report of your co-signee will reflect such failures, and his score will be degraded. Be very careful about the repayment schedule of such loans, as this will reflect your friend or relative in a bad light and damage his or her credit standing.

First, you can ask your friends and relatives to help you. Ensure that you give them a plan of repayment and you adhere to it. It is very easy to spoil relationships over a personal loan, so be very careful. Second, you have the choice to apply to bankruptcy specialized financial institutions who will be happy to lend you the money provided you offer collateral, a co-signee or are willing to pay a high interest rate.

You will have to choose the solution that suits you best. In case you ask a friend to co-sign the loans for you, remember that any payment deviations on your part will reflect on his/her credit report as well!

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1. Live frugally. Hard measures in hard times. As soon as you realize that you cannot manage your debts any longer, you need to cut off all extraneous expenses and focus on a realistic repayment plan.

2. Dump your credit cards. Use only cash. By “dump” the credit cards, I meant that you stop using them; do NOT close the accounts! The total “credit limit” you have in your name is a good factor, which you should always strive increase.

3. Start saving. Saving will not only force you into financial discipline, but also provide you a cushion for future emergencies. Besides, creditors consider the saving aspect positively.

Scary picture, right? But don’t worry; you still have rights, and you are still protected by the law.

The Fair Debt Collection Practices Act is meant to protect you from the vindictiveness of such creditors.  They are required to report only the truth about the status of your credit, and are forbidden from using harassing and intimidating tactics.

Know your rights! Familiarize yourself with the FDCPA. And know also your rights, for best negotiations with creditors, as they often have the power to remove harmful remarks entered (by them) so that your credit score will improve. Insist on this in your negotiations – and get it in writing!

1. Live frugally. Hard measures in hard times. As soon as you realize that you cannot manage your debts any longer, you need to cut off all extraneous expenses and focus on a realistic repayment plan.

2. Dump your credit cards. Use only cash. By “dump” the credit cards, I meant that you stop using them; do NOT close the accounts! The total “credit limit” you have in your name is a good factor, which you should always strive increase.

3. Start saving. Saving will not only force you into financial discipline, but also provide you a cushion for future emergencies. Besides, creditors consider the saving aspect positively.

On the other hand, debt consolidation can teach some very valuable lessons.

1. You need to think ahead. Most people fall into the debt trap because they live for the present. They buy impulsively; they don’t save; they don’t pay their bills on time. Debt consolidation is a time when you are forced to sit down and chalk out the future of your finances.

2. Live within your means. There is no magic wand that will make your loans disappear; there will be no lottery that will suddenly give you all the cash you need to square up your debts. Debt consolidation will teach you that you should – and can – live within your means.

From the above, debt settlement looks like a good thing; however, did you know the debt settlement is seen as high risk by creditors? This is entered on your credit report and will stay there for 7 years.

Do you also know that when you take this step the credit bureaus decrease you credit score? It will take 12-24 months to undo the damage done by debt settlement to your credit score.

While debt settlement may be a better alternative to bankruptcy, consider the downside before you taking action.

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Good financial management principles are often the last thing on your mind when you have plastic money in your hand. But failure to constrain spending can very soon lead you into a financial jam. When you find yourself in such a situation, look up places where you can get debt counseling services.

Once in counseling you will find that you are not alone; there will be scores of people just like you, who realized that plastic money is an invitation to financial suicide. Once you accept and understand your problem, the solution will suddenly become clear.

Debt counseling is an exceptional gift. Ensure you use it well so it can set you free from burdensome debt.

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A credit consultant may set you back with his or her fees in the beginning, but you will gain much more in the long run. The consultant will be able to show you ways to prevent a forthcoming financial crisis, which will in turn save you money, effort (to repair your credit) and loss of your peace of mind.

Use a credit consultant as a tool to manage your finances wisely, and keep a high credit score!

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However, debt counseling bears no significance upon your credit score. Whenever you feel constrained by debts, you can always seek out counseling. Many reputed credit repair agencies offer this service for free. This is a good first step towards financial self-sufficiency
 
On the other hand, there are people who consider debt consolidation as a positive action. It’s true that this will initially register negatively on your credit report. However, in the long run you will benefit because you will get rid of your debts.

Debt counseling would be an excellent medium that helps you to decide whether or not to adopt debt consolidation as a solution.

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Many creditors are tempted to harass you directly or through third party agents (collection agencies) in order to recover the money owed them. In such cases, you can file a suit against them under the Fair Debt Collecting Practices Act.

Keep in mind that no credit agency should:

• call you at your work place unless you permit it
• call you at odd hours – earlier than 9.00 AM or later than 10.30 PM
• misrepresent themselves to obtain information from you, or anyone related to you
• use abusive languages when asking you to repay the loans
• threaten you verbally or physically

For more information see Fair Debt Collection Practices Act

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You’ll find that in most cases, when you inform the creditor that you want to shift the loan to another institution because of better terms, the original creditor will be willing to match or improve on the current terms in order to keep your account.

Be smart! Keep looking for better deals, as this is one of the best ways to minimize your financial liabilities. Debt negotiation is a savvy way to save money!

If the person’s first concern is to raise the credit score, then debt settlement is not the right path to take. The credit bureaus and creditors in general do not look at debt consolidation as a method that spells “responsibility with finances.” So the immediate result will be a dip in the credit score.

But if the person’s focus will rather be on getting out of debt the fastest possible way, then debt consolidation is one of the best ways out. This will also raise the score, though at a slower rate than you would wish for. The best part of this choice is that once you’ve signed up with a debt consolidation program, you will have regained your peace of mind regarding timely payment of bills.

Find a person who will be willing to lend his good name (his or her credit score should be high and his credit report impeccable) as a co-signee to your loan.  His assurance to the bank or financial institutions will indicate that he will make good on the loan in case you fail to do so.

Beware that default payment involves far more than repayment in such cases. The credit score and report of your co-signee will reflect such failures, and his score will be degraded. Be very careful about the repayment schedule of such loans, as this will reflect your friend or relative in a bad light and damage his or her credit standing.

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When you are on the brink of losing everything and you desperately want a professional opinion where should you go? You have two choices – first, you can go to any leading attorney or legal agency for advice; second, you can go to a reputable and effective credit repair agency or agent.

These are the two places where you will find sound advice about whether or not to file bankruptcy; and if yes, how to do it in a manner that  harms you the least.

But the most vital bankruptcy advice would be to reconsider it again and again, until you have exhausted ALL your possibilities. This should be indeed your parachute – a last resort. It’s worthwhile to avoid declaring bankruptcy if you have any other alternative, because once it finds its place onto your credit report, the repercussions are very discouraging. You will have to bear the stamp of high-risk investment for 10 years … which is a very long time.

First, you can ask your friends and relatives to help you. Ensure that you give them a plan of repayment and you adhere to it. It is very easy to spoil relationships over a personal loan, so be very careful. Second, you have the choice to apply to bankruptcy specialized financial institutions who will be happy to lend you the money provided you offer collateral, a co-signee or are willing to pay a high interest rate.

You will have to choose the solution that suits you best. In case you ask a friend to co-sign the loans for you, remember that any payment deviations on your part will reflect on his/her credit report as well!

First, you can ask your friends and relatives to help you. Ensure that you give them a plan of repayment and you adhere to it. It is very easy to spoil relationships over a personal loan, so be very careful. Second, you have the choice to apply to bankruptcy specialized financial institutions who will be happy to lend you the money provided you offer collateral, a co-signee or are willing to pay a high interest rate.

You will have to choose the solution that suits you best. In case you ask a friend to co-sign the loans for you, remember that any payment deviations on your part will reflect on his/her credit report as well!