May 18, 2012

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Yes bankruptcy can remove your credit card debts

If your credit card bills are due but funds are scarce, then  you’ must have been hit by the credit card bug, the one that breeds off your inability to practice wise money management. Don’t worry, its quite common in the US. According to Federal banks of Boston, the average credit card debt per household with credit card debt is $15,799 and approximately 609.8 million credit cards are held by U.S. consumers these days. Therefore, if your credit problems are gradually spiraling out of control then, you must know that you are staying at the dangerous late-payment territory. If this situation continues for long, and you can’t consolidate bills in any way, creditors can file a lawsuit against you and can attain right to garnish your wages, place a lien on your assets or can simply force you to file bankruptcy. However, bankruptcy could be a blessing in disguise for you, as it can give you a financial fresh start, by eradicating your existing debts or just by offering a convenient repayment plan. However under certain conditions creditors can stop the discharge of your debts.  Read on to know more in this regard.

Bankruptcy

If you file for personal bankruptcy like chapter 7 or chapter 13, you will no longer remain legally liable to repay the debt amount. Once you are declared bankrupt, neither creditors nor collection agencies can take any from legal action against you and have to cease all types of interactions regarding the discharged debt.

 

 Chapter 7 bankruptcy

Under a Chapter 7 bankruptcy plan, you usually liquidate all your non exempt assets under the supervision of a court appointed trustee and use the money to pay off the amount owed. Credit cards and other unsecured debt could be easily eliminated thorough bankruptcy. However consumers who are filing chapter 7 bankruptcy wont be able to file bankruptcy again before 7 years.

Chapter 13 bankruptcy

However, declaring chapter 13 bankruptcy help a consumer to keep their home and other assets in tact, which they might lose if they filed for a Chapter 7 bankruptcy. Under a chapter 13 plan you can liberate Credit cards and other unsecured debt as well. Here the debt could be paid back as per the federal bankruptcy court approved payment plan. If you have just filed a chapter 13 bankruptcy, you have to wait for at least two years from the release date of the bankruptcy to file bankruptcy again.

Consideration

However, creditors can challenge the credit card discharge in a Chapter 7 or Chapter 13 bankruptcy, if they consider the debt is incurred by deceitful means. In fact creditors can notify the Credit card debt as non-dischargeable, provided the information given on the credit card application are found to be scam or in case the debtor, who are not at all wiling to repay the loan misused the credit card. Fraud could be assessed by a number of ways. For example, if there is a sudden increase in the credit card’s usage just before filing for bankruptcy or incurring a huge bill right before filing bankruptcy or using the card to make large purchases when the debtor is experiencing a job loss. Under all these aforementioned situations it’s clear that the debtors are quite sure that the charges can be paid back I future, so they have incurred the credit card debt intentionally.

Filed Under: Bankruptcy Laws

Can chapter 7 bankruptcy help discharge student debt?

If you’re unable to repay your educational loan, then you mustn’t choose bankruptcy as the only option to get out of your stress soon. It’s because, a chapter 7 bankruptcy will only help you discharge your commercial debts. Educational loans are typically exempt from discharge in a chapter 7 bankruptcy. Try to look for a debt relief programs that can help you get out of debt. But if the debt repayment plan brings no help to your debt problems, then you can plead the judge of the bankruptcy court to help you discharge your debts. You have to demonstrate the bankruptcy court that you’re truly unable to repay your educational loan and your income will not improve in the future years. If the judge gets convinced, then he may discharge you remaining student debt.

3 Steps to follow

Read on to know the steps that you must follow to discharge your debts through chapter 7 bankruptcy.

  1. Fill out the form:

To start with your bankruptcy proceedings, you have to ask the clerk of the court to provide you a complaint form to file an adversary proceeding against your loan holder. Now, you must take your time to fill up the complaint form. During this process you must hire an experienced bankruptcy lawyer who will assist you in doing all the paperwork. After you have filled out the form, you must submit it to the clerk of the court.

  1. Submit proofs of financial hardships:

Now, you have to spend some of your time to gather proofs of your financial hardships. You have to show them that you have taken help of a debt relief program to repay your debts but were unable to do so. You have to provide them necessary documents such as your bank statements, paystubs, disability records, bill records and proofs of your payments to your lenders so as to prove that fact that, your educational loan payments are restricting you from enjoying minimum standard of living.

  1. Wait for the approval:

After you have provided the documents of your financial hardships, the judge will review your evidences. This will help him know that you’re truly unable to repay your debts through other means and bankruptcy is the only option. After he gets confirmed about your disability to repay your debts, he will finally discharge it.

Though a chapter 7 bankruptcy will help you get rid of your educational loan soon, but it will damage your credit score greatly. Thus, after you have cleared your entire obligations you must plan a budget and stick to it so as to save some part of your earning every month. Strings of savings will help you build up a great fund after certain period of time which you can utilize to manage any emergency situation.

Filed Under: Bankruptcy Laws, Debt Reduction

Write off and debt settlement is a viable option

It is a good option to go for debt settlement for people who wish to get rid of their debt but are not eligible to file for bankruptcy. In debt settlement you have to contact all your creditors to whom you owe money and negotiate with them to pay their debt after settling for a reduced amount. This amount you may pay in one or more larger payment to clear the debts. Since the creditors do not want to lose the entire money, they will surely work with you to figure out a payment plan to get the money.

Many people can be benefited by opting for debt settlement. When you start making the payment to the creditors to write off the debts, your credit score goes up and the credit report looks much better. The lower the amount of reduced debts, the faster will be the payment made to the creditors. This is because after reducing the debt amount, which may be reduced to 40 percent to 60 percent of the original amount, the debtor is in a better position to pay the debt amount to the creditors. It is also a better idea to pay the debt of the creditor who agrees to receive a fraction of his debt by using a credit card debt which you can pay it off easily in the best pay day.

It is recommended to take the help of the debt settlement attorneys if you have a lot of debts and are not able to negotiate with the creditors. The attorneys are better qualified to handle the debt settlement job. They negotiate with the creditors on your behalf and handle all the matter relating to your debts from making phone calls, contacting the creditors to working with the creditors for a reduced debt amount with convenient payment plan. After you start to write off the debts, you will be able to live a stress free life with no pending bills, no irritating phone calls from the creditors and no debt on your head.

Filed Under: Chapter 7 Bankruptcy

Damaging Corporate Images with the Internet

In trying to find customers and increase the size of their business, many small business owners are starting to turn to the online world as a place where it is simple to introduce new people to their business. This is an effective method, as the internet has become nearly ubiquitous in recent years, however the internet is more than just a gold mine of new eyeballs for your business. Your small business needs to create an online presence in order to establish a good online reputation.  One of the most important parts of any business is reputation management, and for small businesses this is a key component to growth.

Why your Online Reputation Matters

It is hard to find someone now who does not use the internet on a regular basis. As the internet has grown to become more popular, people have also developed more uses for the internet. At this point, creating a business without an online presence is almost no longer an option. If you don’t make an effort to create a good online reputation, then there will be no one out there to stop those who are on the internet to badmouth your company and give it a bad reputation.

Since many consumers use the internet to determine which businesses they should work with, this can have serious repercussions for your business’ bottom line. Online reputation management is a key component in growing any small business.

Google: The 800lb Gorilla

If there is one search engine that you want to please when creating your business’ online presence, it is Google. Google accounts for over half of the searches done on the internet, and if you cannot get ranked in Google results, your website might as well not exist.

Many websites get the majority of their traffic from Google, and if your website is not one of the first results when performing a Google search for your business, then you need to get to work. Google is an important part of managing your online reputation. Of course, you can’t cater solely to Google, but you must take it into consideration when building your website.

Filed Under: Bankruptcy Laws, Bankruptcy Myths Tagged With: , , ,

How Chapter 13 Bankruptcy can Help with Money Problems

The biggest problem with money is that it’s so easy to mis-manage. Spend too much and you can easily accumulate debilitating loans. If you have money problems that are impossible to manage, you may need to take extreme measures. If you can’t handle your debts, bankruptcy chapter 13 may be able to help you get back your life and start fresh.

Chapter 13 bankruptcy is not the chapter most people think of when they hear bankruptcy. Chapter 7 bankruptcy is when your assets are liquidated and used to pay back the creditors. Any leftover nonexempt debts are discharged. The problem with chapter 7 was that so many people were using it as an easy way out of paying back their debts, whether or not they were really having trouble.

Today, more people are being forced to file chapter 13. With this chapter, instead of liquidating your assets and discharging debts, a payment plan is set up for you by your trustee if you have a regular income. Over approximately 3 to 5 years, you will need to make payments to your trustee which will then be paid to creditors. Depending on the amount of debt you have and the amount of income you have, the entire debt may or may not be paid. If by the end of the payment term there are remaining debts, as long as you made all your payments on time, the remaining debt may be discharged.

The good thing about chapter 13 is that it probably won’t be on your credit report for 10 years as with chapter 7. It may be on your report for as little as 3 years. This will mean getting back to your life sooner. Also, chapter 13 allows you to make payments without getting harassing calls from creditors. Finally, by making this payments you should be learning how to manage your money better to afford to make such payments.

Filed Under: Chapter 13 Bankruptcy Tagged With: , , , ,

Bankruptcy Advice for Seniors

To many seniors, bankruptcy seems like a foolish idea. The cold reality is that many seniors will live for only another 20 years at most. In this case, is it even worth filing for bankruptcy? After all, a bankruptcy stays on your record for a number of years. When you may not even live long enough for the bankruptcy to be expunged from your record, at times it can seem silly to file for bankruptcy. However, there are a few compelling reasons why seniors who are in financial trouble should file for bankruptcy despite their advanced age. A large debt load does not just hurt you – in the long run it hurts your children and grandchildren, and this pain can be avoided simply by filing for a Minnesota bankruptcy.

How it Helps You There are a number of reasons why a Minneapolis bankruptcy can help seniors. Many times seniors gather a large amount of debt unexpectedly. The cost of health care is often expected to be covered by Medicare, however this is not always the case, and sometimes seniors are stuck with large bills that they can’t afford. Filing for bankruptcy can relieve seniors from a great deal of stress as they no longer have to worry about paying off the large medical bills and credit card debts that have been growing over the years. Social Security has been declared exempt from bankruptcy and would continue to be a source of income for a senior who has declared bankruptcy. Many state also have homestead exemptions, allowing for seniors to stay in their home even after filing for bankruptcy. These facts allow seniors to live comfortably after filing for bankruptcy without many of the worries that come along with being deep in debt.

How it Helps Your Children and Grandchildren

Credit card debt and medical bills are classified as unsecured debt. This means that once a senior passes away, the full debt can be transferred over to those who inherit the senior’s estate. By filing for bankruptcy, these debts will be eliminated, allowing the estate to be inherited without bringing down the rest of the family with the debt of the senior. Filing for bankruptcy can make financial sense, not only for the senior, but also for those who will inherit the assets of the senior.

Filed Under: Personal Bankruptcy Tagged With: , , ,

6 Steps to Build Credit After Bankruptcy

Obtaining a good credit score range should be your next goal after declaring bankruptcy. You must rise from your financial fall and regain your creditworthiness. You should learn from your mistakes and live within your means.

Here are 6 steps on how to build credit after bankruptcy:

1.      Maintain your current loans and apply for a new one if you do not have any.  Bankruptcy will allow you to keep your mortgage and car loans. This is your second chance to achieve credit worthiness. You must reaffirm your car debt and make payments on time or if possible before the due dates. If you can cope, pay more than the minimum required amount.

2.      You should use secured credit cards since this can add in to your credit score. These are cards that require you to make cash deposits to your savings account so you can have your new credit card. You can use it just like any ordinary credit cards. You can establish a good credit history pay making payments on time and keeping the balance as low as possible.

3.      Clean up your credit report and check for mistakes and wrong information. You have to make sure that your debts have been “discharged in bankruptcy” by the three well-known credit bureaus. This is to make an assurance that your accounts have been completely eliminated.

4.      Apply for a new credit card account that can boost up your credit score. Some banks will offer you new credit card accounts six to 9 months after your bankruptcy. But it is wise if you will only accept one offer so you can monitor and easily cope up your credit card bills. You should make on time payments. Always remember that you are still in the process of building back your credit.

5.      Never co-sign loans or be co-makers of any credit made by someone you knew. Because you are still on the process of regaining your credit worthiness, co-signing a loan is not a wise decision. You will never know if that loan will go bad and you have your name attached to it. That will give you a negative record.

6.      Think positive and believe in yourself. Even if you are currently experiencing a financial drawback, it is important to maintain a positive outlook in life because that will serve as your motivation to rise from your fall.

Filed Under: Credit After Bankruptcy Tagged With: , , ,

Credit Repair Specialist: How They Can Help You?

Every year, it is necessary to check your credit card reports to make sure that everything listed in there is correct. If you find any inconsistencies that you want to be corrected, you can get help form a credit repair specialist. Credit repair specialist can help you repair your credits by offering their service and correcting any mistakes in your credit report.

However, you should know that a credit repair specialist only has a limited scope of area where they can help you. They can only help if there is truly a mistake in your credit report so before hiring one, try to get your credit report and do the examining first.

Remember that a credit repair specialist can cost you a significant amount. If you want to get rid of the cost, you can do the credit repair on your own. As long as you have enough time, then you can surely make this work for you. But first, try to learn some basic information about credits and credit ratings. Searching through the internet can help you a lot.

On the other hand, if your problem is settling your debt, a credit repair specialist won’t be able to help you with it, but you can still do it on your own. There are several ways that you can use in order to eliminate your debts. If you find all these things too difficult to comprehend there are agencies that can help you such as a debt settlement relief companies. But you’d have to choose among the thousands of companies available today.

Beware in selecting a debt settlement relief company because there are several of them who would only take advantage of your financial problems and instead of helping you out, they would just aggravate the problem. Before working with a company, verify that they are reliable and trust worthy.
Done 20

Filed Under: Debt Reduction Tagged With: , , ,

Are you ready to get your credit card post bankruptcy?

Have you been to the bankruptcy court time and again? If answered yes, you must be worried about obtaining new lines of credit post bankruptcy. Most Americans see credit cards as the means to purchase things that they can’t afford through cash. These days, with the present debt profile in the US, declaring bankruptcy no longer carries a stigma as it used to earlier. In fact, among business owners, it is more common to find out people who have already filed bankruptcy and are again looking for getting new lines of credit. If your debt reduction efforts have not been successful and you have been forced to file a Chapter 7 or a Chapter 13 bankruptcy, you need not fret about the possibilities of getting another new credit card. Here’s how you can easily get through the process of obtaining a new card post bankruptcy.

What are the 3 ways to re-establish credit post bankruptcy?

The financial experts always recommend three certain ways to re-establish your damaged credit by getting a credit card post bankruptcy. As you’ve already filed for bankruptcy, you won’t be able to easily qualify for an affordable card. Here’s what you can do instead.

  • Get a high interest rate credit card: For consumers who have already filed bankruptcy once, it’s very important for them to rebuild their credit initially. As the lending industry is a credit based one, the lenders will first check your score before giving you a credit score with favorable terms and conditions. Consumers should never expect to get a credit card with affordable interest rates post bankruptcy. Shortly after bankruptcy, it is always recommended by experts that consumers should settle with high rate cards, than just get turned down for an offer that doesn’t suit them. Read the fine print very carefully and make sure you arrange money and pay off the minimum monthly payments ion time in order to re-establish your credit score.
  • Get a secured credit card: Secured credit cards can also be a good choice for those who feel they can be turned down on an unsecured credit card post bankruptcy. You require having a savings account that will secure the credit limit on your secured credit card. This will protect the credit card lender in case the borrower defaults on the payments. However, consumers should be aware of the impact of taking a secured credit card on their credit score.
  • Stay without credit: Although most consumers are keen on getting new lines of credit after bankruptcy, a more wise approach would be to dump the world of credit. Stop using credit cards for some span of time, boost your income and save enough money so that you do not require seeking debt reduction help next time you borrow a credit line.

Therefore, bouncing back financially after a bankruptcy is not very difficult. A little bit of financial planning and dedication can help you achieve your financial goals. Concentrate on rebuilding your credit report to qualify for new credit lines. Also shop around before getting a new credit card post bankruptcy.

Filed Under: Credit After Bankruptcy Tagged With:

Recovering from Bankruptcy

Bankruptcy is often the unfortunate result of a financial catastrophe. Initially, you may feel like the bankruptcy will follow you forever but that’s simply not the case. As soon as the legal and financial aspects of your bankruptcy filing are complete, you should begin your bankruptcy recovery.

Revisiting Your Financial History

The first step in recovering from bankruptcy is determining how you got to that place to begin with. In some cases the answer is simple and includes items such as medical expenses, divorce, death of a spouse, or other personal tragedy that caused a significant loss of household income. But in other cases bankruptcy occurs because of your responsible spending and then a decrease in household income. List the primary reason or reasons for your bankruptcy on a sheet of paper so that you can develop an action plan, if possible, to avoid a similar problem in the future.

Medical Expenses

One serious illness can create medical expenses in the hundreds of thousands or more. Sometimes even with insurance coverage, the cost to the individual is insurmountable. If you did not have health insurance before, try to find a way to get health coverage now. Even a catastrophic health insurance plan can ultimately save you from a bankruptcy filing.

Divorce or Death of a Spouse

Divorce or death of a spouse is usually outside of our control; however, you can established a household budget based on your new household income and use money-saving techniques, such as coupon clipping, to close gaps that your household income may not cover.

Overspending

If your bankruptcy was due to overspending, you need to practice better control over your finances. The first step in learning control is creating a household budget that lists all of your income and fixed expenses for each month. Allocate extra money after fixed expenses are paid to a savings account, paying off debt, and then household entertainment or other luxuries. If you have a problem with self-control when it comes to credit card spending, obtain a secured credit card to prevent you from overcharging again.

Those small first steps can help you avoid another financial meltdown.

Filed Under: Personal Bankruptcy Tagged With: , ,
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