How to Prevent Bankruptcy

If you are in danger of falling into bankruptcy or other financial difficulty, then you have to take certain measures to repair your situation. There is no way to just magically make financial problems go away. If you are going to turn that negative situation into a positive one, you will have to take positive corrective action.
The first and most important change in your financial situation must come as a result of a personal change in your philosophy. If impulse purchases have been a problem for you, it is time to eliminate those things. You should concentrate on only purchasing things that are well thought out. This includes both big purchases and small purchases. For instance, some people will spend too much money on things like DVD box sets. Even those small things add up over time.
Control your credit card spending at all costs. If bankruptcy is in the near future for you, then you do not have the choice to use your credit card and pay it off later. You have to cut up the cards if it takes that to keep you from using them.
With that in mind, don't give any consideration to credit card offers that might come in the mail. Strangely, credit card companies like to prey on people who have suffered some financial issues. This is because they make a huge portion of their revenue off of the fees associated with credit card misuse.
When bankruptcy is in the equation, your life is not going to just stop. The world won't stop spinning just to make things easy on you. This means that you might even choose to purchase a home during this time. Like with your other spending, you have to control how much you spend on your home, as well. Don't try to impress anyone with your home. Stay within your means and purchase a house to fit your needs both financially and as a family.
One thing that people always seem to overlook is insurance. They have all of their bases covered except for that one very important base. If you don't have the appropriate medical insurance, auto insurance, or homeowners insurance, you could be putting yourself in significant danger financially. Without insurance, you are only one mishap or one emergency away from losing everything. If you have adequate insurance coverage, you will be pleased with your financial stability in the rocky situation.
Being in danger of bankruptcy won't stop you from saving money for retirement. You must still put some money into the coffers for savings. It's incredibly important to make sure that your investments are only safe ones. If you are having trouble financially, you cannot afford to make any mistakes with your investments. Don't make any brash decisions and don't extend your portfolio too much
Bankruptcy can be a difficult thing to go through, so you want to take all measures to prevent it from happening. If you follow these steps and use a little bit of common sense, you will more than likely find yourself in decent financial standing after a short period of time.
Read more about personal finance at the money philosophy blog Get the education on money that everyone needs.
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Bankruptcy is Not the Only Option

For people struggling to manage personal debt and feeling there is no light at the end of the tunnel, Bankruptcy may appear to be the only solution. The stress caused by having serious money problems can be overwhelming and like a cancer, it spreads affecting relationships. Its generally accepted that money issues are the number one cause of marriage breakdowns, so its no wonder that bankruptcy can appear a welcomed relief to this money stress.
Whilst its true many problems disappear under bankruptcy, all too often they are replaced by other equally stressful problems.
For starters, there is no escaping the personal stigma attached to being a bankrupt. In our society, thanks to the archaic practices of days gone by, bankrupts are shunned and often seen as untrustworthy. Even though the names of bankrupts are no longer printed in national papers these days, there is no escaping the shame that most people feel when it comes to declaring bankruptcy.
An additional consequence of being bankrupt is that you lose your financial independence. A Trustee is appointed to investigate your financial position and determine what you can own, earn and whether or not you will be required to pay your debts (albeit at a reduced rate). Suffice it to say, this process can be extremely intrusive and demeaning.
Being a bankrupt can also impact on your future career aspirations and goals because there are certain jobs you can do and certain jobs you cant do. For instance, many jobs that require you to be a part of a professional association or hold a license ask whether you've been a bankrupt in the application and if so, can reject your application on those grounds. Apart from this, you are allowed to keep very basic assets such as a car to the value of around $6500 and normal household effects. For people with assets theyve worked hard for, this can be devastating.
For more on the consequences of Bankruptcy, you should contact the Insolvency and Trustee Service of Australia.
Fortunately, for people struggling with debt that prefer not to be a bankrupt, there is an alternative.
A Part IX Debt Agreement (or simply known as a Debt Agreement) provides people struggling to manage their finances with an opportunity to settle their debts at an affordable rate, avoiding the stigma and invasive consequences of bankruptcy. Essentially, a Debt Agreement is a legally binding settlement or repayment arrangement with creditors allowing debtors to settle their debts over a short period of time.
Of course there are consequences and benefits attached to doing a Debt Agreement, like any option. For instance, people under a Debt Agreement will become credit impaired (if they are not already) - making it difficult for them to obtain a credit card or any other form of debt for a period of time. For many, a break from debt would probably be a welcomed relief.
More importantly for people considering Bankruptcy, a Debt Agreement provides a real alternative to the stigma attached with being a bankrupt. Under Bankruptcy a debtor would more often than not walk away from their debts however under a Debt Agreement you reach a mutually acceptable compromise.
For more information relating to Debt Agreements you should contact the Insolvency and Trustee Service of Australia or a registered Debt Agreement Administrator.
The truth is that the vast majority of people that find themselves with unmanageable debts do not want to walk away from their debts, pay nothing, leaving their creditors high and dry. Most people want to pay their debts but for circumstances often beyond their control, they cant. For this reason, a Debt Agreement may provide a suitable solution.
Nicholas Bregozzo specialises in Debt Consolidation and has advised people who have personal debt problems since 2000. During this period he has helped 1000s of people manage their debts and avoid Bankruptcy. Currently he works for Debt Fix with the objective of providing clear impartial advice and solutions for people in serious debt.
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The So Called 'Stigma of Bankruptcy

If you're in debt in Australia and are considering bankruptcy, then a concern might be the so called 'Stigma of Bankruptcy'. These days it's really hardly an issue.
Also, bankruptcy is not a last resort, to be avoided at all costs.
If a person's got what to them is overwhelming debt, and they've tried to get on top of it, but can't, then declaring themselves bankrupt is a very practicable and sensible step to take. Mostly, it enables a person to get out of debt and so give themselves the chance to start again, to get back on their feet, and so be able to get on with their lives.
The 'Stigma of Bankruptcy' is an old fashioned term. It probably was to be avoided at all costs back in days gone by, but its rarely an issue today.
Back in the 'Stigma of Bankruptcy' days banks in Australia were strict and conservative with their lending practices. You at least had to have a face to face interview with a Loans Officer.
In those days people who went bankrupt were mostly in business. It was pretty obvious when a business suddenly closed down that something had happened. Everybody knew, people talked, the shame of the 'Stigma of Bankruptcy' hung low in the air.
These days the banks have changed things. Loans are made over the internet and telephone. Pre approved offers of loans come in the post. The lenders have simply changed the rules and the risks.
Ordinary people now go bankrupt. In the year ended 30th June 2007 there were 25,242 bankruptcies in Australia, and of that number only 4,821 of them were business related bankruptcies. The rest were ordinary people.
Over the last 5 years to 30th June 2007 111,176 people have gone bankrupt ( www.itsa.gov.au and there click About us, then click Statistics)
Some of these 111,176 people may live in your street. They may sit next to on the bus or tram or train going to work, they may be some of the people that you know at work, and through work. If you knew, you'd be surprised to find who has gone bankrupt.
Chances are that you'd know more than one of them. Did you first suspect that they may have gone bankrupt because you noticed the 'Stigma of Bankruptcy'?
Also, of these 111,176 who were declared bankrupt in those 5 years, did you read about any of them in the newspapers? Every day now just check the Public Notices section and you'll see what I mean. Bankruptcy is very private, the newspapers will not be the source of a person's 'Stigma of Bankruptcy' fears.
You wont have seen it on television either, unless it was somebody high profile, and newsworthy.
The people who will know that you've gone bankrupt are the people that you owe the money too. Your bankruptcy trustee will tell them, you don't have to.
Your local bank may not be told. The return address for credit card statements are a GPO box somewhere?
If a person goes bankrupt I think that the real 'Stigma of Bankruptcy' is with the people owed the money. It now seems that it's the banks etc who don't want to be caught with the stigma of having to report to their shareholders and so to the public at large, including their competitors and peers, that the management has lost some of it's shareholders' money by lending it to people who couldn't pay it back.
If a person goes bankrupt, then unless they've got something of value that their bankruptcy trustee would be allowed to sell (and there are some restrictions on a trustee here as there are a lot of things that he can't touch) then the creditors mostly won't get paid much, if anything.
If a person goes bankrupt, then for the next 3 years they can earn a minimum weekly net take home pay of $758.80 (current at 1st January 2008) that's after tax and child support, and if applicable, business expenses, before the trustee can claim any of this income.
The $758.80 base figure increases is adjusted twice a year and is more if the bankrupt has dependants. If the bankrupt earns more than the base amounts, (known as the Threshhold) , then they can keep half of whatever amount goes over the Threshhold amount, as well as the minimum $758.80 or whatever it is that applies to them.
A bankrupt's weekly allowable income is not likely to cause any stress or stigma during the (usual) 3 years of bankruptcy.
The 'Stigma of Bankruptcy' will be felt by a bankrupt's creditors, the banks and others.
As a person falls behind in paying their loans and credit cards and other debts, after a few months they start to look a bit shaky from a debt collection point of view.
A widespread practice now is that some cases the creditors on-sell these possible bad debts to companies willing to buy them, at a big big discount on what is owed. Its then up to the buyer to collect payment, and as far as I am aware, when they do they keep it all.
In this way it seems that the banks etc don't have to report the sale of these debts at a loss as bad debts. Saves face, saves a bit of Stigma.
It's the buyers of these debts, who are now second hand debt salesmen, who have to cope with a loss if they don't get paid because the debtor goes bankrupt.
So that they don't lose of their money, and carry the stigma associated with knowing that their gamble has lost, the debt collection tactics of these second hand debt salesmen can be very aggressive.
They wrongly claim that bankruptcy is the last resort, and they seem to rabbit on and on a bit about at the 'Stigma of Bankruptcy'. But it's hardly an issue.
A person is generally bankrupt for 3 years, and their credit rating is damaged for 7 years. Overwhelmingly, for most people, going bankrupt does not affect their employment in any way.
Overwhelmingly, being bankrupt does not mean that you cannot travel overseas in the 3 year period of your bankruptcy. You simply have to seek the written permission of your bankruptcy trustee. Again, in modern times, very little stigma is suffered by the bankrupt.
If you've tried and tried but for some reason you just can't pay your debts, then through bankruptcy, the government has given everybody the chance to get out of debt, to start again, to get back on their feet, and so be able to get on with their lives.
The 'Stigma of Bankruptcy' is hardly an issue.
Fred Appleton is a retired Chartered Accountant. For more than 10 years Fred has specialised in helping people understand and deal with bankruptcy, but from the point of view of the person owing the money. Having been through bankruptcy, Fred knows first hand about the issues and challenges. Since starting his business he has helped thousands of people sort out their debt problems. Fred may be able to help you stop the harassment and telephone calls. From what people have told Fred, over the years, he is certain that bankruptcy can save lives and marriages too. Fred Appleton - Bankruptcy saves lives
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Getting Mortgage Refinancing After Bankruptcy

Many people think that getting any form of mortgage refinance after bankruptcy is impossible but this is not the case. Granted it is more difficult than if you had a great credit score and you will pay more money to get the finance but it is not impossible. The reality is that you can get finance after about six months of the completion of your bankruptcy proceedings. This is good for two reasons. Presumably you need the cash for some valid reason and this can be a great help. Also, by getting new credit you can help to rebuild your credit rating which can lead to a better credit score and cheaper finance. Here are some ideas to improve your chances of This article will cover the way to get such a deal.
The first step is to get your financial situation in control as quickly as possible. You must then keep it running smoothly for the next six months. I know this sounds easy to say but the chances are that you are undergoing some form of credit counseling as part of the bankruptcy settlement. This is a great chance to prioritize what is important. It will help you too weed out expenses that you don't need and instill the discipline you need to service any debts that you have.
Part of this discipline involves keeping your current mortgage repayments serviced. At the end of six months, you should have a spotless mortgage repayment history for that time period. This will be a good indication to lenders that you are reliable and improve your chances of getting a refinance deal.
Another option is to get a new credit card. This may not have a very good interest rate or credit limit but it can help to improve you credit score. This will result in a better deal when it comes to refinancing. Use the card sparingly and pay it off every month to demonstrate your discipline when it come to credit.
You should strive to have a bank account that is stable and does not get overdrawn over the six month period.
By doing all these things you can make any application for a mortgage refinance look immeasurably better and improve the chances of getting a good refinance deal. The basic aim of these measures is to show that you have gotten over your financial problems and are a safer prospect for financial institutions and lenders.
You can re-establish your credit score and get back to normal in under 6 months after bankruptcy. For information on getting finance and restoring your finances visit http://www.bankruptcyfixup.com The site has features on finding good mortgage refinance after bankruptcy Adrian Whittle writes on ways to deal with debt and bankruptcy advice.
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Bankruptcies And Credit Counseling Explained

I like to tell my clients that financial crisis is like art: It's different for everyone but you know it when you see it. If you are gasping for breath in the middle of the night obsessing about bills you cannot pay, you should know your options. Bankruptcy, in the Chapter 13 or the more rigorous Chapter 7 version are legal protections that can be valuable but thanks to a push by the Bush administration they are more difficult to qualify for and may not provide the protection you would expect. Consumer credit counseling are marketed by so-called "non-profit" companies so aggressively that one has to assume there is profit in there some where...there is and you don't want to go there.
Chapter 13 Bankruptcy
The Chapter 13 Bankruptcy is in fact a renegotiation of your debts with the intention of paying them all off in a reasonable timeframe. The day that you satisfy your Chap 13 obligations you will be able to apply for credit. By immediately reestablishing credit lines and maintaining excellent payment a Chap 13 "survivor" could get a conforming loan in as little as two years, I see it everyday.
Chapter 7 Bankruptcy
This really is the death sentence. Going Chapter 7 Bankrupt will effectively seal your ability to get any credit for at least 3 years, 7 years for A credit. This means that you are completely writing off your debts with no intention of paying them in the future. Do not do this if you foresee any need for credit. If on the other hand you own your home and are truly swamped to the point that you can't meet your mortgage you may need to consider this remedy so you can clear the slate and focus on the most important obligation - your home.
Consumer Credit Counselling
CCCS as it is know in the mortgage industry is usually looked upon just like a Chapter 13 Bankruptcy because you are formally, legally renegotiating your debts. Counselors do not always make clients aware of this which causes many a befuddled applicant to tell their loan officer, "I just wrapped all those debts up in Credit Counseling, why would you decline my application?" The befuddled applicant was declined because the underwriter looked at him like he was in the midst of a bankruptcy. Moreover while a client may make monthly payments to the Service, the Service does not always pay the debtors on time. If you truly need a credit counselor look for one that won't actually restructure your debts. Better yet look for better options Do that on your own so you won't have anyone else to blame but yourself
Your best option if you don't have a sheriff knocking on your door is to look into 'bankrupting' yourself. By that I mean restructure your debt today, on your terms. This may mean prioritizing which creditors you will pay and which ones you will tell to "go ahead and write this one off...". It's the same thing the court would do but you avoid that permanent stain on your credit report and experience debt relief immediately. You can find more information for a Do-It-Yourself Bankruptcy here.
Mitchell Torek - AKA LoanLad - has counseled hundreds of his own clients to better credit as a mortgage originator. After years of helping good people in bad circumstances he decided to write the recipe down so people could do the cooking themselves. Today, "Loanlad's Free Credit Repair" is the preeminent source for credit repair advice on the web.
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Facing Bankruptcy? Three Things You Need To Know

In today's economy, everyone hopes that they would never face personal bankruptcy; however, it is an unfortunate reality that many people must deal with it every year. Perhaps you are one of these people. Maybe you have lost your job, or lost your house, or have gotten into credit card debt above your head. Some people are facing bankruptcy because of medical bills that they are unable to pay.
If you fit into the category of facing bankruptcy, or even if you are thinking about or considering bankruptcy, here are three things you need to know:
1. Facing bankruptcy is a life-altering event. It can have a significant effect on your family and on your own emotional well-being. In some cases of bankruptcy, you may be required to liquidate assets not deemed necessary in order to help pay back your debts. In any case, it negatively impacts your credit score and greatly hinders your ability to take out a loan or borrow money even if you should need to. Bankruptcy is not something to take lightly or go into without fully analyzing all your options.
2. There are alternatives to bankruptcy. One option is to sell your house if you own it, and pay off your debt. Another option is to take out a home equity loan or line of credit (basically borrowing money at a lower interest rate against the value you have in your house), to consolidate your debt. You may also benefit from consumer credit counseling or a debt consolidation loan (a loan that allows you to combine all your debts into one lower monthly payment). At the very least, see a financial counselor or advisor before filing for bankruptcy.
3. Consult an attorney and keep records if you have to file for bankruptcy. This is not something you want to do on your own. Look for a qualified lawyer to help you through the bankruptcy process, and keep good records and files of every proceeding.
On a final note, if you are forced to file for bankruptcy, you can move forward to rebuild your credit. You can do your best to learn to live debt free and to avoid making any financial mistakes. There is always hope for your future.
Julie Zorgo is a mother who is passionate about helping women eliminate debt and live financially stable lives. She manages the website http://www.moms-living-debt-free.com
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Why Should I File for Bankruptcy?

Financial problems these days are very common and you shouldn't be ashamed of admitting your too far into debt. Outstanding debts can occur in a variety of different ways. You could be swamped with overwhelming medical bills, laid off from work, or worse. Financial troubles loom everywhere, but luckily theres still one way out If your in too deep. Knowing when and when not to file a bankruptcy can sometimes be tricky, but maybe I can help.
If your just overwhelmed with debt and can no longer pay then bankruptcy is definitely an option for you. When you file a bankruptcy to wipe your debt completely clean its called a 'discharge of debt'. Discharging your debt will start you over with a clean slate. It doesn't matter if you file a Chapter 7 or a Chapter 13 both will wipe most, if not all, of your debt out.
If you can no longer pay your mortgage and your house is up for foreclosure then bankruptcy is a viable option for you. A bankruptcy can help stop the sale of your house, but it will not wipe out the debt owed on your current mortgage. What a bankruptcy will do for your mortgage is help create a repayment plan for the payments your behind on.
A bankruptcy can also help keep your car and various other possessions from being repossessed. If your car has been repossessed already by the bank, a bankruptcy can force the bank to give you back your car. Unfortunately this is only the case if you file the bankruptcy quickly enough after your car is repossessed. Any debt you owe for these items will then be consolidated into a 'bankruptcy plan', which is a plan that a bankruptcy trustee will be directly responsible for your debt, and all your payments will be paid to them instead of to the finance company. A bankruptcy plan is made to be in your best interest.
If you plan to file because of medical bills then that may be a good option. Whether you were in the hospital for a major illness, or from a car wreck, or whatever, sometimes your medical bills can pile up to an exponential amount. If you can no longer afford to pay these bills then a bankruptcy can dramatically reduce your medical bill debt.
One of the major reasons people file bankruptcy is because loss of work. People easily become comfortable with their spending habits at the income their making. Sometimes the unthinkable occurs and you lose your job. The bills can quickly pile up. Often times this is compounded with medical bills also since a lot of people can no longer work because of medical reasons.
If you have an incredible amount of debt, don't be afraid to ask for a little help. Filing a bankruptcy can repair your financial burdens and get you back on your feet.
Why Should I File for Bankruptcy? was brought to you by Legal Forms Bank .Biz where you can download 'do-it-yourself' legal forms online. They help average people just like you to file for Personal Bankruptcy.
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Useful Tips On How To File For Bankruptcy

Because of many economic factors, there are many people struggling to make ends meet and who are trying to find help with bankruptcy questions and wanting to understand how to file for bankruptcy. When people find themselves with a debt load that exceeds their income level and the monthly payments become too great, then often they must seriously consider bankruptcy relief.
Many times when people experience catastrophic happenings in their lives that turns their financial situation upside down, they start to wonder about filing for brokeness and if it is the right course of action for them. There are many credit counseling services that give help when broke and some even provide bankruptcy classes that educate people about what to expect from the process of filing a bankruptcy claim form with the court.
In some instances, when people start to learn about how to file for bankruptcy, they find that there are other solutions to their financial dilemma. One of these options can come from the debt counseling agencies themselves and they can also serve as a middle man to help negotiate with the creditors so that you can avoid having to file bankrupt.
Another option that comes to light is that of debt consolidation loans. Most of the time, a debt consolidation loan is available to people who have some type of property that this new loan can be secured against, such as their home. Sometimes this is called a second mortgage or an equity line of credit.
The purpose of the debt consolidation loan is to take many different debts, which often have very high interest rates, and pay them all off with a loan that carries a lower interest rate. This simplifies the money management scenario by exchanging numerous bills for one payment per month and it lowers the monthly payment that is required, sometimes by a significant amount.
Because being broke leads to negative marks on your credit report for ten years, it is always best to try to find an alternative route, thus avoiding this drastic step altogether. However, there are many situations that leave people with no choice in the matter and they soon find that they need to know how to file for bankruptcy relief from their creditors.
The positive aspect when one must file bankrupt, is that they will have a fresh financial slate so that they can start anew and move forward without the harassment and problems that overly aggressive creditors sometimes cause.
For those who must turn to filing for brokeness, they soon learn that there are two different kinds. A Chapter 7 one is also sometimes called a liquidation bankruptcy. This procedure allows a person to essentially wipe all debts from their record, with a few exceptions under the Federal bankruptcy law.
In order to qualify for this type, you must provide the court with a complete list of everything that you own and all of the debts that you owe. If the value of the property you own exceeds the exemption limits, you may be required to sell some of your property.
People who have no other option than to file, also learn that with a Chapter 13 one, there is a repayment plan. This is also known as a reorganization bankruptcy and it makes arrangements for the creditors to be fairly paid at least a portion of the amount owed.
With a Chapter 13, there are monthly payments which must be made to a court appointed trustee who is assigned to your case. The trustee is then responsible for dispersing the monies received to the various creditors on the behalf of the debtor.
When starting the process, some people try to cut corners by attempting to take care of the matter themselves. However, most people quickly discover, in the process of learning how to file for bankruptcy, that there are many complex issues and details to be dealt with and they end up getting bankruptcy help from an attorney.
It is important to be sure that your bankruptcy court record is filed correctly or it can be rejected by the court or the creditors, making it even more important to be sure you have professional help with bankruptcy before filing any paperwork.
Educate yourself further about how to file for bankruptcy from Mike Selvon articles portal. Your feedback is valued and appreciated at our bankruptcy information blog where a free audio gift awaits you.
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Personal Bankruptcy - Not As Easy As It Sounds

Personal bankruptcy is something that many people start to consider when they discover that they are drowning in debt. It is not a decision that most people make lightly and some are even embarrassed about the possible necessity of taking such a drastic step, even though the records show that the majority of people who file do not do so due to financial mismanagement, but due to things outside of their control such as divorce, unexpected medical expenses, job loss, etc.
One of the things you need to determine for personal bankruptcy is whether Chapter 7 or Chapter 13 is better for you in your situation. The laws and requirements of these are significantly different, and depend on a large variety of factors that are particular to your situation.
Many people think that filing personal bankruptcy is just a matter of filling out the right forms and submitting them, but the days when that statement was true are long past. With the recent changes in bankruptcy law, this is no longer a do-it-yourself process, and you may wish to consider getting a good lawyer that can guide you through the maze of forms and paperwork. The money spent on a bankruptcy lawyer can more than pay for itself in time saved and assets not liquidated.
You need to know what kind of debt you have that is causing you to consider a step as drastic as this because there are certain kinds of debt that cannot be discharged with any type or chapter of bankruptcy. Some of these would include federally funded student loans, alimony, and other type of debt, so if these types of debt make up a good percentage of your total indebtedness, this is not going to help you.
Personal bankruptcy is neither quick nor simple. While it can wipe your financial slate clean so you can start over, the entire process will take several months to accomplish, and this does not matter which chapter you are filing. You should also be aware that a court judge will review your case and approve your bankruptcy so you can move forward with it, but there is a chance that from a legal standpoint, you may not even be able to file.
Strange as it may seem, the new bankruptcy laws dictate that you must attend some credit counseling sessions. This is strange because the majority of people who file do not do so due to financial mismanagement, but this is still part of the law, so it is something that you need to plan to do.
This is not something you want to enter into until you have considered all of your other options. The reason for this is because a bankruptcy filing will show up as a huge flag on your credit report for the next seven to ten years, and it will be more difficult for you to get credit cards, personal loans, a mortgage, and even employment with that huge blemish on your credit report.
Having financial obligations is almost a way of life in today's world. While we cannot accurately forecast what will happen in the future, there are usually options that should be evaluated, and in the financial world, bankruptcy may indeed be the best option. But you need to be aware of the ramifications and ensure that you have checked into all other possible options first.
For more insights and additional information about Personal Bankruptcy as well as getting a free bankruptcy evaluation from a qualified attorney local to you, please visit our web site at http://www.bankruptcy-data.com
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How Chapter 7 and Chapter 13 Bankruptcies Will Affect your Credit Score

Your Credit Score will be affected whether you file Chapter 7 or Chapter 13. But which is worse? In this article I will discuss the Pros and Cons in regards to how each bankruptcy will affect your personal credit rating. Over the years in the Mortgage Industry I have dealt with the affects of these different bankruptcies, and how each one affected your ability to get financed. I know that each has its purpose, but I do know which Bankruptcy will affect your credit Score more.
A chapter 13 bankruptcy is where the lawyer gets most of your debts consolidated into a payment you can afford. You make these payments to a trustee for a period of time. This particular bankruptcy is the one I would prefer over Chapter 7. One of the main reasons is the lenders look at a 13 less harshly than other bankruptcies. The main reason is you are attempting to pay back your debts. You can get a mortgage if you are in a 13. You cannot get a mortgage if you filed Chapter 7 for usually 2 years.
Chapter 13 stays on your credit report for 7 years. A 7 stays for 10 years. So you can begin to see how a 7 is going to affect your credit rating vs. 13. Typically 7 sounds like the better way to go, but think twice before you file. Once you make your decision, the last thing you want to do is have regret, because of the credit impact each one has.
Chapter 7 is where you wipe out all debt and there are no requirements to pay back your debts what so ever. There are big repercussions to your credit score when you file 7. This particular bankruptcy is the ultimate death of your personal credit. This bankruptcy stays on your credit for 10 years. There are certain situations where you must file a 7.
But if you don't have to file 7 don't. This bankruptcy takes more time to recover from, and lenders don't like seeing it on your credit report. Typically it is easier to re-establish your credit with 13 vs. 7. So I think you get the picture how your credit is affected either way. It is always better to pay your debts back if you can, and not file bankruptcy at all. Just remember your credit is your life.
About the Author: Mike Clover is the owner of http://www.my720fico.com My720fico.com is one of the most unique on-line resources for free credit score reports, Internet identity theft software, secure credit cards, and a BlOG with a wealth of personal credit information. The information within this website is written by professionals that know about credit, and what determines ones credit worthiness.
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Bankruptcy - How To Recover And What To Expect

Bankruptcy is not the end of life. Yes, it does knock down your credit considerably. And, people don't seem very willing to lend you money after bankruptcy. However, bankruptcy also gives you a fresh start. You have a new opportunity to rebuild your life and your finances. Recovering from bankruptcy is not easy but it is possible if are willing to work toward it.
The first thing to do is to evaluate your situation objectively. If bankruptcy was the result of a temporary setback, such as a medical emergency, you do not need any drastic measures to recover. Just take steps to beef up your savings and investments so that if another emergency strikes, you are well-prepared.
In contrast, if the root cause of your bankruptcy was excessive spending, you would need to take tougher steps to recover from this financial blow. You might need to make drastic changes to your lifestyle-spend much less and save much more. If you used to dine out a lot, you may need to switch to home-cooked meals. If your wardrobe was earlier full of designer clothes, you may now need to settle for off-the-rack dresses. These steps may hurt initially but will ensure that your recovery to financial independence is speedier.
In addition to cutting expenditures, it is important to start saving and investing your money wisely. You can start by saving small amounts and then move on to bigger investments as your financial position gets better. Go for a mix of long-term investment options, such as retirement plans, and short-term investments that you can liquefy easily. While the long-term investments take care of your future needs, the short-term ones act as a safety net for you in case of any financial emergency.
About a year after you filed for bankruptcy, you should start thinking about rebuilding your credit score. The easiest way to do so is to apply for a credit card. You may want to do so sooner but it is wiser to wait out a year. This way, you can avoid unscrupulous lenders who charge astronomically high rates of interest because of the recent bankruptcy record.
Once you decide to go for a credit card, make sure you explore all options before settling on any credit card. These days, it is not difficult to get a credit card even if you have a bankruptcy record. If possible, opt for a secured credit card as you will get it a lower interest rate than an unsecured one. At www.bankrate.com, you can find a list of creditors who offer secured and unsecured credit cards after bankruptcy. Some examples of unsecured credit cards for those recovering from bankruptcy are Continental Finance Gold and Merchandise.
Once you get your credit card, use it cautiously. Learn from your past credit mistakes and make sure that you do not again fall into an overspending trap that led you to bankruptcy. In addition, make sure that you pay off your credit balance in full each month. After you have done this for some time, you can negotiate with the lender for a lower interest rate.
The above guidelines will help you recover from bankruptcy, slowly but steadily. In the meantime, keep your dreams alive and don't lose heart.
Learn more about credit repair, how to boost your FICO fast and tips to improve your credit rating.
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Bankruptcy Explained In Plain Words

Without proper money management and debt management measures and sometimes even in spite of them, the final outcome is usually bankruptcy. But what exactly is Bankruptcy and what can you expect from it?
Filing for bankruptcy used to be a common practice to bring ease to people's finances easily and without effort at the expense of creditors. But since in 2005 the Bankruptcy Abuse Prevention and Consumer Protection Act has been in force, bankruptcy filings have dropped dramatically. The problem is that the new act has set the limits too high and few can now qualify for the relief bankruptcy provides even though no one would want to be in such situation.
Chapter 7 Bankruptcy and Chapter 13 Bankruptcy
There are two types of bankruptcies according to current legislation. The two processes are completely different and should be regarded as such. Chapter 7 bankruptcies provide a solution to extreme situations where the debtor can no longer repay debt and needs to get a fresh start. This bankruptcy type eliminates debt by canceling a portion of the outstanding debt with each creditor by means of the sale of the debtor's assets.
Chapter 13 bankruptcy on the other hand, does not necessarily involve the sale of assets. Instead, the debtor and the community of creditors with the aid of the court, negotiate new terms and establish a new repayment program which needs to be feasible, affordable and economically viable both for the creditors and the debtor.
How About Filing for Bankruptcy on My Own?
By now you surely have heard: Why paying thousands of dollars on legal fees when you can file for bankruptcy on your own?. The question is, can everybody do so? Truth is that it can be done but a lawyer will probably save you a lot of hassles and probably money too. Legal experts are familiar with all technicalities that can provide you with greater financial ease.
Moreover, the new bankruptcy law requires that you get credit counseling before processing your bankruptcy forms. Therefore, you will already be familiar with your situation and possibilities and have enough information then to decide whether you need legal assistance or not if bankruptcy is your only choice. In any case, you should always contact an attorney if you are not sure about how to get through this process.
Foreclosure Is a Risk, Be Protected
Your mortgage can endanger your property if you fail to repay it. Financial failure may imply that you loose your property to foreclosure. If you are threatened in any way by your mortgage loan lender, if you receive notification of possible foreclosure or even if you think that something is going on because the lender is not trying any more to recover the investment, you should contact a lawyer immediately. There are foreclosure attorneys specialized on these issues that will be able to assist you in keeping your property if at all possible. Just remember that when it comes to this issue, time is of the essence.
Sarah Dinkins is an Expert Loan Consultant at Badcreditfinancialexperts.com where you can learn more on financial subjects through her original articles.
Article Source: http://EzineArticles.com/?expert=Sarah_Dinkins
Without proper money management and debt management measures and sometimes even in spite of them, the final outcome is usually bankruptcy. But what exactly is Bankruptcy and what can you expect from it?
Filing for bankruptcy used to be a common practice to bring ease to people's finances easily and without effort at the expense of creditors. But since in 2005 the Bankruptcy Abuse Prevention and Consumer Protection Act has been in force, bankruptcy filings have dropped dramatically. The problem is that the new act has set the limits too high and few can now qualify for the relief bankruptcy provides even though no one would want to be in such situation.
Chapter 7 Bankruptcy and Chapter 13 Bankruptcy
There are two types of bankruptcies according to current legislation. The two processes are completely different and should be regarded as such. Chapter 7 bankruptcies provide a solution to extreme situations where the debtor can no longer repay debt and needs to get a fresh start. This bankruptcy type eliminates debt by canceling a portion of the outstanding debt with each creditor by means of the sale of the debtor's assets.
Chapter 13 bankruptcy on the other hand, does not necessarily involve the sale of assets. Instead, the debtor and the community of creditors with the aid of the court, negotiate new terms and establish a new repayment program which needs to be feasible, affordable and economically viable both for the creditors and the debtor.
How About Filing for Bankruptcy on My Own?
By now you surely have heard: Why paying thousands of dollars on legal fees when you can file for bankruptcy on your own?. The question is, can everybody do so? Truth is that it can be done but a lawyer will probably save you a lot of hassles and probably money too. Legal experts are familiar with all technicalities that can provide you with greater financial ease.
Moreover, the new bankruptcy law requires that you get credit counseling before processing your bankruptcy forms. Therefore, you will already be familiar with your situation and possibilities and have enough information then to decide whether you need legal assistance or not if bankruptcy is your only choice. In any case, you should always contact an attorney if you are not sure about how to get through this process.
Foreclosure Is a Risk, Be Protected
Your mortgage can endanger your property if you fail to repay it. Financial failure may imply that you loose your property to foreclosure. If you are threatened in any way by your mortgage loan lender, if you receive notification of possible foreclosure or even if you think that something is going on because the lender is not trying any more to recover the investment, you should contact a lawyer immediately. There are foreclosure attorneys specialized on these issues that will be able to assist you in keeping your property if at all possible. Just remember that when it comes to this issue, time is of the essence.
Sarah Dinkins is an Expert Loan Consultant at Badcreditfinancialexperts.com where you can learn more on financial subjects through her original articles.
Article Source: http://EzineArticles.com/?expert=Sarah_Dinkins

Getting Credit And Credit Cards After Bankruptcy - Yes You Can, And I'll Show You How!

Most of us hate the idea of bankruptcy and what it would do to our credit! We would avoid it in everyway possible because there is no magical cure for debt, including bankruptcy. But if you do file bankruptcy and your motion is granted, then the realisation sets in! Now what? Who will grant me credit of any kind? Where can I get a credit card? These are all legitimate questions and these questions often terrify most people because getting and maintaining your credit rating took a lifetime!
But what about those who use bankruptcy as a last resort? Just how do you start over and where? The best way is with a copy of your credit report after a bankruptcy! Why? Because most people will have major errors in their credit reports because of the massive and sweeping changes that a bankruptcy does to your credit rating! Your credit rating is wiped clean, or it's supposed to be! Do you know that most of us who have all 3 of our credit reports find as much as 76% of it is riddled with errors? Even with these kinds of errors, you can still get bad credit credit cards! Would you believe that one of the most common errors is items that were listed as a chargeoff, that should be removed by bankruptcy are still showing up as a chargeoff? I have a whole website where I go into detail on how to rescue your credit and change this! I'll link it below and watch out for my other articles on this!
You can repair your credit while getting credit again and this is the best way to make your score rise! Getting credit is even easier than most think because some creditors know you cannot file for a bankruptcy again for another 7 years, but like I said, you need to know where to look! Credit cards are the best way to start since some of these are easy to get, even after a bankruptcy and they report to all 3 credit bureaus promptly, so make those payments on time! When applying for credit cards, knowing where to look will be of great help because applying for too many at once will not only hurt your score and make it go down, but the lower it gets, the less likely you are to get approved! The lesson here is to apply for credit cards where your application will do you the most good.
I had my ID stolen and went through a bankruptcy shortly afterward, so this is an area I know a lot about. A professional ID theft ring got a hold of my ID and burned their rental house to the ground to escape the police! For this reason, I authored several website on these topics in my attempt to be of assistance to others. The biggest piece of advice I can give you is don't give up and use my experience to get help! Things are not as bad as you might think and you will comethrough this with flying colors if you apply yourself and get mad enough to fight back!
All Rights Reserved! This article may be copied and reprinted or posted only if unchanged and all links are active!
Duane Bell is a ID theft victim and author who has recovered and posted several articles and websites with links to the Dept of Justice and the Federal Trade Commission. His articles and website content has been as a teaching tool in the classrom and has been picked up by the US Education system webportals! Easy Credit Repair has been a hit on the web and the credit card offers for those who must start over with bad credit have earned him testimonials in internet blogs as a learning tool worth using and looking into! His sections on Common Credit Repair Scams and How to Dispute Negatives in your credit report are being used in classroom instruction!
Article Source: http://EzineArticles.com/?expert=Duane_Bell

Filing For Bankruptcy - How It's Done

Filing for bankruptcy has become a common thread in the fabric of our nation. Many people find as they go into debt over credit card bills and high mortgage interests rates, their options for getting out of that enormous debt are dwindling. Many find bankruptcy is their only alternative to the constant nagging and threats of debt collectors. While some continue to tough their bad situation out, looking for ways on their own to pull out of debt, others have found that filing is the best alternative they could come up with. If you are one of the people who believe you have reached the end of your debt rope, filing may be right for you. But before you dive in, take the time to learn a little bit more about the process and what it will mean to your life.
Things to Know About Filing for Bankruptcy
Since filing for bankruptcy is the route you've decided to take to manage your overwhelming debt, it is important to educate yourself on some key points related to filing.
Research is Key - Before you ever pick up the phone to call an attorney, do your own extensive research on the topic. Find out what preparatory steps you can take on your own to minimize the work you'll have to do after you speak with an attorney. Also, do research to find the best attorneys in your area who can help you file. Most importantly, research to find alternative ways to manage your debt that can steer you away from filing if possible.
All Debt is Not Eligible - Many people are filing for bankruptcy under the misconception that doing so will eliminate all of their debt. This is not always the case, however, because some debts like student loans (which are almost always federally funded) and tax bills are not covered.
Creditors Can No Longer Contact You - Once you file, one immediate benefit you receive is the lack of debt collectors calling you. This is because filing puts them under an "automatic stay" where they are not allowed to try to collect a debt anymore and must contact the attorney representing you to work out any additional details. The only exception to this rule, however, is when you choose to represent yourself.
Filing Doesn't Ruin Your Life - It is true that your bankruptcy will stay on your credit report for 7-10 years. However, this does not mean your life is over. Many organizations in recent times have come up with credit opportunities for those with subprime credit; so now it is possible to get a credit card, or even buy a car or house after filing for bankruptcy. You just have to get out there and find the right opportunities.
Steps to Filing for Bankruptcy
Get Credit Counseling - Before you can officially begin the process of filing for bankruptcy you must go to a U.S. Trustee-approved counseling organization within 180 days of filing. This way, you are provided with your alternatives to filing.
Learn the Types of Bankruptcy Filings - There are two types that you must consider when filing: chapter 7 and chapter 13. Chapter 7 is the option most people prefer to take because it is a complete liquidation filing that dissolves all eligible debt. A chapter 13 on the other hand is more of a streamlined repayment program that gets the creditors off of your back while you come up with ways to repay them. People are finding it is more difficult to file a chapter 7 bankruptcy because most courts don't want people to use it as a way to get out of debt they could actually pay.
Decide Whether You're Filing Solo or With Assistance - Many people have found that they would prefer to file their case without the assistance of an attorney. You are definitely entitled to undergo this process alone; however, it is never really advised. There is so much paper work and so many laws to consider that it is really not ideal to try to do the work of a person who actually went to school for it. If anything, put your energy into finding a lawyer who is very competent and not so expensive (FYI, the most recommended lawyers are those who will charge you based on the amount of debt you have, rather than a flat fee). Just know that when you file chapter 7, you have the pay the lawyer in full before filing, where with a chapter 13, you don't.
Meet with Your Lawyer - Once you choose your lawyer, you will begin the "meat" of the process, which is determining which route is best for you by going over all of your debt. You will also complete a BAPCPA's means test. After this is done and you come to an agreement with how you both will proceed, you can refer the creditors to your lawyer, and from that point on they will no longer be allowed by law to contact you.
Have Your 341 Meeting - This is also called your meeting with creditors. This is the time that you must legally agree to your bankruptcy in their presence and be recorded stating that your answers regarding the petition you're filing are truthful.
Determinations are Made - In your case, if you filed for chapter 7, the trustee will decide if you have assets that can be liquidated to repay the creditors. If you filed chapter 13, you will be placed on a repayment plan that can extend for up to 5 years.
The Clean Slate - After the 60th day passed your 341 meeting, you will be informed of your discharge of debt (if you filed chapter 7). If you filed for chapter 13, your discharge of credit will occur 30-60 days after you've finished your final payment.
Knowing the process behind filing for bankruptcy before you begin will help you make the right choices. However, find alternatives are always more highly recommended than going through with filing. If you find that filing for bankruptcy is the right choice for you, proceed with caution, as you may have found an alternative way to manage your debt had you researched a little bit more.
Jeffrey Meier of Jam727 Enterprises at http://www.Jam727.com offers information articles on Bankruptcy at http://www.jam727.com/bankruptcy2/bankruptcy_articles.htm
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Bankruptcy Services - Understanding Your Options

Bankruptcy services aim to stop the sinking ship and help you avoid being forced to file bankruptcy by providing the opportunity to move your collections through a logical and effective progression of payment requests. These services are not generally covered by legal aid, nor are the cost covered by any government agency.
Bankruptcy is a legal process which can relieve you of most, if not all, of your debts. For the majority of people bankruptcy is something they think won't affect them, but in this day of ever increasing consumer spending, easy availability of credit cards, and increases in interest rates, the concept of personal bankruptcy is beginning to loom large on the horizon. Bankruptcy law is very complicated in nature, and you should always consult with an attorney before you take any action. The laws differ from state to state, with mounds of legal paperwork to complete, so be sure that the lawyer you select is an expert in this field.
Individuals will normally choose between filing a Chapter 7 and a Chapter 13 bankruptcy. Chapter 7 is the type of bankruptcy used when you do not have the ability to pay off your existing debts. Under the new law, bankruptcy applicants who wish to file under Chapter 7 must meet certain eligibility requirements under a "means test". Under this test, if your current monthly income is less than the median income in your state, you can file for bankruptcy under Chapter 7.
Under the new laws, individuals wishing to file bankruptcy under Chapter 7 or Chapter 13 must show their proof of income by providing federal tax returns from the last tax year. If an applicant is ineligible for filing under Chapter 7, he or she must file under Chapter 13 instead. There are differences between Chapter 7 and Chapter 13, but the main distinction is that under Chapter 13, the debtor enters into a five year repayment plan in which he or she must pay a certain amount of money to creditors, based on an expense to income formula.
A bankruptcy judgment is recorded in your credit history and remains there for seven to ten years, depending on the type you obtain. People in bankruptcy can still obtain credit as a number of banks now offer "secured" credit cards, where a debtor puts up a certain amount of money in an account at the bank to guarantee payment. Usually the credit limit is equal to the security deposit given, and is increased as the debtor proves his or her ability to pay the debt.
Online services are also available to help you guide through the intricacies of the process. These services help you determine what form you should pursue and are usually provided on a low flat fee basis. The number of these services is increasing to satisfy rising demand, so if you are even considering bankruptcy as a way to free yourself from an overburdening debt, then it's probably a good idea to see what types of services are available and what they can offer you. Using bankruptcy services, with the help of knowledgeable and experienced debt relief counselors, can make things a lot more manageable for the distressed person.
AARON H PRATHER owns and operates http://www.bankruptcyservices101.com a site covering information regarding bankruptcy and consolidation services and debt elimination. Bankruptcy Services
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Life After Bankruptcy

Bankruptcy becomes a viable option for someone who is "upside down" in terms of cash flow. In other words, when a person has more money going out each month than coming in, bankruptcy should be considered if no reversal of this negative cash flow is within sight. The longer someone waits to explore the various options available, the more serious his or her situation may become.
One of the worst things people can do in this situation is to borrow more money to try and pay off their debts. On paper, this is clearly an unwise financial decision. In the real world, however, it is very common for individuals to pursue this strategy in an attempt to buy time and hold off on filing for bankruptcy. On the surface, this is certainly a noble notion; however it can often compound the problem and serves only to delay the inevitable.
For many homeowners in the midst of this upside down cash flow, speaking to a qualified mortgage professional is a much better option. An experienced loan officer can objectively look at your finances and help you determine if restructuring your mortgage would not only help, but possibly even alleviate any need for bankruptcy.
If bankruptcy is the only option, seek out a reputable bankruptcy attorney and credit counselor. A qualified mortgage specialist can provide references for you as well, as he or she works with these professionals on a regular basis. Reliable references are essential in this case because experienced professionals greatly increase the odds of a successful bankruptcy experience. It's that simple.
When filing for bankruptcy, be completely honest and accurate regarding every aspect of your financial situation. This includes any changes to your income which may occur throughout the process. Bankruptcy is a federal procedure, adjudicated by real judges, and scrutinized by representatives who coordinate with the Department of Justice, the FBI, and the IRS.
Here are some additional steps you can take to make the bankruptcy process as painless as possible:
1.) Save all paperwork regarding your bankruptcy, and keep it organized. This will prove beneficial after your bankruptcy as you now have all of the pertinent information in one place. Also, be sure to write down your discharge date. It's surprising how many people forget to do this.
2.) Establish a household budget. This can be accomplished in many ways, but there are several inexpensive computer programs available which do an excellent job.
3.) Throughout the bankruptcy, do your best to not only live below your means, but to save as much cash as possible. You never know what you may need it for once the process is completed.
4.) Be prepared for a barrage of junk mail. There will be sharks on the loose who are hoping to capitalize on your need for credit.
Tips for Rebuilding Credit:
1.) If you must buy a car, focus on transportation as opposed to style. Buy an inexpensive, used car, and try to get a loan for it. It's a good idea to figure out what your budget allows in terms of a dollar amount first. This means obtaining financing prior to looking for a car.
2.) Get a secured credit card. Secured credit cards allow for the cardholder to deposit a said amount of money into an account, thus establishing the spending limit of the card. Missed payments result in deductions from the account. Some of these cards will reward responsible borrowers by upping the limit without an additional deposit. Some will even convert the account into a traditional credit card. (Be wary of offers of "easy credit" or any card which asks you to call a 900 number. You will be charged for the call.)
3.) Meet with a credit repair specialist. Not only can they help you clean up the damage to your credit report, they can advise you on specific ways to rebuild the credit you lost as well.
While it does take time, there is definitely life (and credit) after bankruptcy. Some mortgage lenders will even lend to you within a year or so after a bankruptcy. If you're in serious financial trouble, the trick is to get the help and advice you need from professionals you trust.
Assured Mortgage - California Home Loans
Ray A. Lopez is a Sr. Mortgage Consultant who works at Assured Mortgage in Tracy, California.
Article Source: http://EzineArticles.com/?expert=Ray_A._Lopez

Advantages of Bankruptcy

Bankruptcies are on the rise so it seems that people understand the advantages of bankruptcy or maybe they are in the unfortunate position of having no choice over the matter. Whatever the reasons this article will list some of the advantages of bankruptcy and some of the obligations when doing so.
Relief from Debt
This is an obvious advantage. People have often gotten themselves in the unenviable position of being unable to pay off or service a debt. This may be through bad luck, poor judgment or financial mismanagement. No matter the reason, a large debt can be crippling and impact on many factors in a persons life. Not only will it affect the persons economic circumstances but it can impact on their health and cause problems in their personal relationships.
Stop Credit Agency Harassment
Filing a bankruptcy petition in a federal bankruptcy court will lead to protection from creditors. Credit agencies or collectors will persist in trying to recover money owed to their clients. This can take the form of physically visiting the debtor or phoning them up. In some cases they will phone up every day. It is federal law that this ceases once a petition has been filed. However you should advise the agency or creditor of the case number for the petition. This will stop the harassment.
A Fresh Start
If a person files for Chapter 7 bankruptcy, then they can effectively write off their debts. This can help them start again without the millstone of debt around their necks. However new revisions to this chapter have made it harder to claim chapter 7 bankruptcy. There is more onus on the debtor to prove that they cannot pay the debts and they have to attend debt/credit counseling programs after they have completed the bankruptcy process. They cannot file for this chapter for another 7 years afterwards.
The decision to file bankruptcy is never an easy one. From a practical standpoint it is becoming more difficult. There is also a degree of social stigma attached to going down this route. Inevitably your credit rating and history is damaged. This can take time to repair and may make getting credit harder or more expensive. However despite these factors, the advantages of bankruptcy are the elimination of debt, protection from collection agencies and lawsuits, and the ability to start again with a clean slate.
If you are thinking about filing for bankruptcy it is important to understand the options that are available to you, visit http://www.bankruptcyfixup.com for advice on handling bankruptcy, including more advantages of bankruptcy and understanding chapter 11 bankruptcy . Adrian Whittle writes on ways to deal with debt and bankruptcy advice.
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