How to Avoid Bankruptcy
How to Avoid Bankruptcy
Although bankruptcy offers some people a clean slate, it is by no means an easy solution. Bankruptcy will destroy your credit and may possibly force you to sell your assets. It could also affect your future employment. In addition, 2005 bankruptcy reform laws made it more difficult to file for chapter 7 bankruptcy, and limited other bankruptcy rights. If you want to preserve your credit, you will be much better off if you do whatever you can to avoid bankruptcy. Although it’s not easy, it’s worth the effort. Follow these steps to avoid bankruptcy. Total All Your Debts Only once you have a true picture of your debt can you take the next steps to avoid bankruptcy. Gather every bill, every statement, and every document that has an effect on your financial situation. Total up both your debts and your assets. Include your mortgage as a debt and the value of your home as an asset. Now break down those debts into good and bad categories. Good debts are home loans and student loans. Bad debts are credit card debts, personal loans, high-rate car loans, and medical bills. You should also list the interest rates and minimum payments for all your debts. Reduce Your Expenses Now total up all your expenses — everything you spend. Even the $1 you spend in the vending machine at the office should be included. Divide those two figures into necessities and non-necessities. Necessities are items you need to survive, like groceries and housing. Non-necessities are nice things to have, but which you don’t need, like that vending machine candy bar or designer sneakers. Add up the minimum payments on your debts and the monthly cost for necessities. This is the minimum amount you need to cover your bills for the month. If you don’t earn enough to cover them, then you need to find a way to reduce your minimum debt payments or necessities. Even little steps like switching from name brands to generics and canceling cable can help. If you can cover your monthly bills, but aren’t making enough to pay down debt, then start cutting non-necessities until you free up enough money to reduce your debt. Consolidate Debt If you have multiple small debts, getting rid of any one of them can be a challenge. By consolidating debt, you not only reduce the total number of bills and minimum payments you owe, but you also reduce the interest rate. So you can reduce your debt faster. In addition to consolidating debt, you can get out of debt faster by paying more than the minimum payment every month. Funnel as much money as you can towards your debt every month. Consult a Credit Counselor Contact a reputable credit counselor if you need help totaling your debts, finding ways to reduce expenses, or consolidating debt. In addition to teaching you money management, they can help you qualify for a consolidation loan, whether it’s in the form of a home equity loan or a personal loan. In some cases, they can help you set up a debt management program. Although there are fees, it may be what you need to avoid bankruptcy. Consider Debt Settlement If your debt vastly outweighs your income, then you may need to consider debt settlement. A credit counselor may be able to negotiate with your creditors to reduce the balance owed. Although debt settlement will ding your credit, it’s not as big a hit as bankruptcy. Debt settlement shouldn’t be taken lightly, but it is a way to avoid bankruptcy if you’ve exhausted all other options. No matter how you got into debt, you can get out of it without resorting to bankruptcy. Although there are situations where it’s the only reasonable option, it’s best for your credit and your financial future to avoid it.Justin narin has 5 years experience as a financial adviser; his key areas are loan consolidation, debt relief, mortgages etc. For more free articles and advice visit http://www.bills.com/avoid-bankruptcy/
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Why is There Medical Bankruptcy
You often hear lots of bankruptcy stories An individual with piles and piles of debts commonly declare bankruptcy Heck, it’s actually the dreaded word anyone doesn’t want to experience Why do people lead to being bankrupt? For one, getting all sorts of loans and credit cards from financial institutions will surely lead to debt problems when not handled properly The typical causes of bankruptcies are due to the inability of an individual to pay their liabilities If they can’t pay anymore, they have the option under the law to declare bankruptcy However, there is a specific kind of bankruptcy which is increasing in number . .The so-called medical bankruptcy is becoming popular to people who undergone medical treatment As we all know, health care services are becoming expensive The cost will depend on the type of service you availed and some other related charges With all the charges like doctors’ fee, medicines, hospital room fees and others, you will surely see yourself going broke If you met an accident and injured yourself, you are putting your life on jeopardy Not only that, your financial resources as well will suffer It’s OK if you are from an affluent family and can support your bills What if you’re income is just enough to cover your everyday expenses . .Getting a needed medical treatment will surely put your financial situation into a breakdown That’s why some people resort to medical bankruptcy The reason for it is due to lack of financial resources The medical bills seems too expensive and unreasonable to their finances Some health institutions offer installment payments but the terms and conditions are just too disadvantageous Even though you are allowed to pay in installments, the monthly payment is sometimes not affordable Remember, if ever you undergone medical treatment, your physical body is still weak Employment seems too impossible and you’re left with no income at all . .How can you pay the health institution if you don’t have money? Unpaid medical bills to some extent can even lose some of your valuable properties like your home Due to desperation, you will resort to loans which have higher interest rates But if ever you can’t pay, the lender has the right to foreclose your property You have no option but just to declare medical bankruptcy Moreover, being bankrupt connotes negative consequences on your part There are limitations set by the court once you declared bankruptcy You cannot easily borrow from lending institutions for a certain period of time . .To avoid medical bankruptcy, it is helpful to have medical insurance In times of health treatments, the insurance company will take care of your bills That would be very helpful to you You don’t have to worry on where to get the money in paying all your bills You can just relax within the comforts of your home and never get problematic on the matter As much as possible, medical bankruptcy should be your last option Find means on how you can fight being bankrupt Better consult a professional to help with your problem .
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Basic Information About Bankruptcy
How will Filing for Bankruptcy Affect my Credit? . .Bankruptcy is a life changing event in any person’s life, with long lasting consequence For example, a record of the bankruptcy will appear in the Public Records section of your consumer credit report for the next ten years Having said that, however, consumers can and do seek and obtain credit after going through bankruptcy . .What Information will be on my Credit Reports? . .In addition to the public record of the bankruptcy, each of your creditors that were included in the bankruptcy will update your account to reflect the bankruptcy The exact information reported will vary based upon the history of the account at the time the bankruptcy is filed In general, most accounts should be reported as “Included in Bankruptcy ” Some may refer to the specific type of bankruptcy with remarks such as “Chapter 7″ or “Wage earner repayment plan ” . .After bankruptcy, the balance, current payment, and amount past due should all reflect zero dollars However, if you were late on your bills before your bankruptcy was filed, those notations may or may not appear on your credit reports The last part of this article discusses how to dispute false information on your credit reports after bankruptcy . .Will I be Able to Get Credit after Bankruptcy? . .For the majority of consumers that file for bankruptcy and either obtain a discharge (Chapter 7) or complete their repayment plan (Chapter 13), the answer is “Yes” It is likely that credit will be more costly than prior to bankruptcy, which may be reflected in higher interest rates, security deposits, or lower amounts of credit offered The two most important factors in being able to obtain credit after bankruptcy are 1) paying all of your bills on time after bankruptcy; and 2) the length of time that passes after your bankruptcy Obviously, you have control over the former, but not the latter Consumers can rebuild their credit after bankruptcy by using low limit or secured credit card accounts, and conscientiously paying them off each and every month . .How to Dispute False Credit Reports after Bankruptcy . .As noted above, post-bankruptcy credit reports should show discharged accounts as “Included in Bankruptcy” with a zero balance and zero past due Often these accounts are reported inaccurately, or have not been updated with the correct information Under the Fair Credit Reporting Act, consumers have the right to dispute false or incomplete information in their credit reports . .First, get a copy of your credit report Consumers can request their free annual credit report by writing to Annual Credit Report Request Service, P O Box 105281, Atlanta, GA 30348-5281 The request form is available at the annualcreditreport com website . .Next, send a written dispute letter to the credit reporting agencies Tell them that you filed for bankruptcy, and give them the bankruptcy court case number List the specific accounts and account numbers which were discharged Send your letter via certified mail, with a return receipt requested Keep a copy of your signed, dated letter, along with copies of enclosures . .If you cannot get false information deleted from your credit report, you may want to talk to a consumer protection attorney about your rights under the Fair Credit Reporting Act .
Source: www.rsstnx.com
