6 Steps to take before bankruptcy

You may feel like you are in a financial hole so deep that you will never get out. Bankruptcy might look like the only way to solve your problems and get a fresh start. It’s not that easy, though. New laws that just came into effect have made it much harder for you to get a discharge of your personal debts through bankruptcy. That doesn’t mean that your situation is hopeless. The first thing you should do is work to get your debts under control. Here are three techniques which will help you do just that.

1. Find out what you are facing. Quite often the problem seems bigger than it really is. Gather together every debt that you have, write down what you owe and who you owe it to. Once you take a look at the problem on paper you might feel better about it. At the very least you will have a definite target to work towards instead of an uncertain enemy called debt. Once you have your debts listed, you can begin to make a plan. Look at the expenses that you can’t avoid – rent, car, etc. – and plan to pay them. Next, look at the interest rates of the other debts and determine the best order to tackle them. Once you have a plan and decide to stick to it you are on your way to a solution to your financial problems.

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2. Cash or nothing. At the beginning of the month take a specific amount of money from your cheques in cash. This is your disposable income for the month. When it is gone you are done for the rest of the month. Essentially, you are giving yourself an allowance. It will be a shock at first, but after a while you will get used to this strict type of budgeting and you may even like it. It is empowering to use this method, because it allows you to set aside the money you need to deal with debt payment so you can pay off your debts more quickly.

3. Get your family involved. You may have got yourself to this point alone, but you don’t have to get out of it alone. Get your family involved. Be honest with them and let them know that you can solve the problem faster if you work together. If you turn saving into a game for kids, they will actually enjoy it. Have them look through the papers for coupons. Make it a game to see how much money your family can save in a month. Think of a fun but inexpensive prize you can give yourselves is you save more one month than you did the month before.

4. Say goodbye to ‘stuff’. Our houses are full of stuff that we are sure we needed at the time, but that lives in our closets now. We never use it and we don’t need it, but someone might. Use eBay or have a garage sale to get rid of the stuff that you can live without. You will feel better living in an uncluttered home and you will be surprised how much money you can raise doing this.

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The Shocking Truth about Bankruptcy That You Must Hear

Topics in the finance world tend to go through cycles. In fact, a lot of people often report that it’s hard to figure out what they should actually do because it’s always tempting to just plunge into whatever sounds good at the time. The truth is that you should always be weighing everything carefully against what your real and current situation is, not just the example situations that you hear about in financeland.

One thing that a lot of people get right is bankruptcy. On the other hand, one thing that a lot of people get (italicize “wrong”) wrong is bankruptcy. Isn’t that contradictory? Not really.

You see, bankruptcy can be a really great thing for people that truly have no other option. In fact, the bankruptcy laws are structured so that you really have no other choices when you’re filing bankruptcy. However, a lot of people mistakenly think that it’s supposed to be something that you do when you still have other options. The truth is that the laws are getting stricter and stricter. You’re not allowed to keep as many assets as you used to in the past, because people have abused the bankruptcy system so badly. It’s not something that you turn to after you run up all of your credit cards on purpose. In fact, this is something that’s considered fraudulent, and the courts have punished people strongly for doing this.

If you’re looking at bankruptcy from every angle, then the shocking truth about bankruptcy that you must hear is that it’s not as clear cut as you might think. If you’re sitting here thinking that you will just file bankruptcy and watch all of your debts disappear, you’re highly mistaken.

For example, you might not realize this but the truth of the matter is that there are some types of debts that aren’t disposed of during the bankruptcy process. If you have student loans, chances are good that they are going to stay with you until they are paid off. It’s very difficult to have them discharged during bankruptcy — most people fail the “hardship” test to have them removed. Private student loans are even harder, which is why so many people warn against them when you’re trying to get stuff done in the educational world. Of course, when the promise of a better life calls, you might feel like it’s something that you have to do. Yet this is why a lot of people say that the high cost of education is higher than most people expect, too.

This is not the only thing that you have to consider. You have to remember that your credit will be essentially demolished for seven to ten years, depending on the type of bankruptcy you process. This means that it will be difficult if not impossible to get into some industries where credit scores and histories are pulled, and it will be difficult to get a home loan. Even if you are approved, your interest rate is going to be a lot higher than someone that has a better credit history.

All is not lost when it comes to bankruptcy. It really is a chance to get a fresh start, and this is something a lot of people need more than anything else in the world. You might feel like it’s impossible to get a fresh start, but that’s really not the case.

If you take the time to get a bankruptcy attorney that can walk you through the process, there’s really no reason why you can’t get things done in virtually no time at all — get started today!

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Which Type of Bankruptcy Should You File

When you’ve finally run out of options, there always seems to be one option left for you — bankruptcy. It’s a topic that few people actually want to talk about, and the reality of the matter is that straight conversation is necessary in order to move forward. If you’ve decided to make the hard decision and pursue bankruptcy, there are a few questions that you’ll have right off the bat. One of the most frequently asked questions out there is what type of bankruptcy should you actually file.

There are a few different types of bankruptcy in the United States, and the right one for you will depend on what your financial goals are, as well as how much money you have to spare.

You see, the primary types of bankruptcy in the United States are a Chapter 7 and a Chapter 13 bankruptcy. When you cannot pay back your debts or you do not have enough income, you will want to look into a Chapter 7 more than a Chapter 13. A Chapter 7 makes it so that you will be able to pick up the pieces of your life and move on, while having your debts discharged. When most people talk about filing bankruptcy, they are definitely talking about that type of bankruptcy filing. You can have a lawyer process this type of bankruptcy, or you can actually file it yourself — all it really takes is a few simple forms and paying the filing fee. If you really don’t have enough money for a lawyer, you may try to take this route.

Of course, there is Chapter 13 bankruptcy, which essentially takes all of your debts and restructures them so that you aren’t going to have to deal with a huge monthly payment.  Chapter 13 bankruptcy is a better option for people that have a monthly income still coming in that is high enough to the point where they would not qualify for a standard Chapter 7 bankruptcy.

Which one is right for you? Well, it just depends on your financial situation and the debts that you have. If you have a steady income and you know that you will want to reorganize your debts to make them easier to afford, a Chapter 13 bankruptcy is definitely a good idea.

Overall, now that you have a little more information about the bankruptcy types, it’s time to make a decision — what will you choose?

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Getting a Bankruptcy Processed As Quickly As Possible

When you’re trying to apply for a bankruptcy, it goes without saying that time is definitely of the essence. So when you have to get things done right away, you would do well to make sure that you have plenty of time to prepare for the road ahead.

The key to any bankruptcy is making sure that you’re incredibly prepared — if you have any information missing, it will make it a lot harder for you to really get your bankruptcy processed. The court could believe that you’re hiding assets from your creditors and refuse to give you the bankruptcy in the first place. While the bankruptcy laws are there to protect you, you also need to make sure that you are abiding by those regulations on your own. It is tempting to think that you can hold back a few assets, and then sell them to have money in your pocket. However, this is a form of fraud and the risks just aren’t worth making this mistake at all.

Moving on to more pleasant topics, getting your information in order is actually much more straightforward than you imagine. The biggest thing that you will need to do is make sure that you have the appropriate contact information for your creditors. Giving them a call is a good thing, but you might actually want to see about finding appropriate mailing addresses. If you’re using a bankruptcy lawyer, they will need to send all correspondence certified mail, return receipt requested. This is so that they have the proper paper trail to protect you in the long run. If you are used to doing things by the phone, you might be surprised to find that this just doesn’t hold up in court. Recording calls without someone’s consent is illegal, and a nasty customer service agent or debt collector is unlikely to give you permission to record their conversation with you. Hence, it’s best to get everything in writing where no one can say that things were not sent or certain information was given when it was not.

There’s no need to feel like you’re hiding from the world when you’re trying to get a bankruptcy processed. It can feel like you should hide it, but think about it from this perspective. There’s really no law that says that you can’t pursue a bankruptcy, and there’s no law that says that you will be discriminated against or even fired for having a bankruptcy. This series of laws is designed to give you the fresh start that you’ve been looking for all this time.

Keep in mind that even with these tips, the bankruptcy process can take a few months. It’s going to be a little stressful because you’ll most likely want to push things along as quickly as possible. However, there’s just no overnight solution to move bankruptcy along. These tips will just make sure that you aren’t delaying your bankruptcy case due to missing or incorrect information. All things considered, you should be on the right track towards declaring bankruptcy and getting the fresh start that you’ve always wanted — why not get started today?

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Bankruptcy & Credit Cards Marketing

Many consumers would expect credit card companies to hate bankruptcy. However, many credit card companies are aggressively marketing to consumers who are considering bankruptcy or have completed the bankruptcy process. Bankruptcy reform has caused many credit card companies to actively pursue consumers who they would otherwise ignore. Bankruptcy reform measures that went into effect in 2005 require all individuals entering bankruptcy to go through a government counseling program. This program teaches individuals how to manage their finances as well as how individuals can avoid bankruptcy.

Typically, customers spend 90 minutes in this debt counseling session. A counselor may suggest that consumers simply budget properly and use a debt consolidation service rather than go through bankruptcy. Bankruptcy can severely impact a consumers credit history and make the consumer unable to qualify for credit accounts for several years. However, a debt consolidation service can help consumers to consolidate their accounts into one monthly payment as well as lower the interest rates that the consumer is paying.

Credit card companies are actively marketing to these customers because they have been shown to make poor decisions and they are still eligible for credit. While credit card companies will not give these customers large account limits, they will often allow them to open small accounts with high rates and fees. Debt relief companies may also assist customers in opening new credit accounts. This is often done to help individuals who have had late payments and other negative information on their credit report. When individuals open new accounts and make on time, monthly payments their credit report and credit score will improve.

Many credit card companies are experiencing a period of rapid growth. Individuals who must go through counseling for their large amounts of debt are perfect customers for credit card companies. They are willing to pay the minimum monthly payment as well as charge a large amount of money to a high interest credit card account. This ensures that credit card marketing departments spend more and more money targeting these customers.

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