Bankruptcy ? Bankruptcy Myths
Bankruptcy has long been a big question mark in the eyes of the consumer. After all they don't teach us about bankruptcy in school. More often than not, a person's view of bankruptcy is largely developed by either their parents or close relatives personal views or dealings with bankruptcy, or a persons view is based on what they see as far as ads etc. regarding bankruptcy. Too often these ads are simply put together by bankruptcy attorneys that want your business. Bankruptcy is big business. With 1,597,462 personal bankruptcy filings being made during the calendar year in 2004 you can see that there is a lot of money to be made by bankruptcy attorneys. While not all bankruptcy attorneys are in it for the money it is apparent by the plethora of advertisements online or on TV that make claims such as you'll be on your way to good credit it no time, or claims that it's easy to file that there are bankruptcy attorneys with their own personal gains at the top of their mind.
Here is a list of myths or untrue statements that I have come across when researching bankruptcy that I wanted to share with you, the consumer.
All Debts are Erased When you File for Chapter 7 Bankruptcy Protection.
This is simply untrue. Don't believe anyone who says this to you. You will find out quickly that there are certain debts that can't be erased. These debts include and child support or alimony, student loans, or any fraudulent debt. Although some legal settlements may be removed it's not guaranteed.
Filing for Bankruptcy Protection Will Improve Your Credit Rating.
No it will not. This is used in several unscrupulous bankruptcy attorneys' advertisements. Be wary of anyone telling you this. The fact is bankruptcy is by far the worst and most damaging mark you credit report can receive. Other negative factors may stay on your credit report for 7 years; bankruptcy can be there for up to 10 years.
Bankruptcy is an Easy and Pain Free Process.
Some bankruptcy attorneys use this in their advertising as well. This is a statement that is false as it is not an easy choice for most consumers. Bankruptcy is one of the harder choices a consumer will make and the aftermath that may develop after a bankruptcy can create long lasting personal problems. Relationship problems, trouble getting a job that requires a clean credit history, or even dealing with the personal stigma attached to bankruptcy can make it difficult for a long time. If someone tells you this is an easy choice they are not looking to help you but rather to profit from your hardships.
While bankruptcy may be unavoidable for some individuals due to hardships that they may be experiencing, bankruptcy is not for everyone. Bankruptcy attorneys should try to find other solutions for you before recommending their own help. Review your options before making your decision, as this may have a long term impact and not provide the quick fix some look for when choosing bankruptcy protection.
Article written by Richard Munster
Rick Munster is the Media Planner for Debt Reduction Service, http://www.debtreductionservices.com When he's not busy media planning he can be found writing, hiking or finding a nice lake to drop a line into.
5 Methods Toward Reducing Your Debt
Decreasing your debt is paramount to having a good credit rating as well as giving you peace of mind. You want to get out of debt, but not all debt reduction options may be beneficial. Let's take a look at five debt reduction options which may help you in your quest to get out of debt.1. Consolidate Loans. Before declaring bankruptcy, consider pulling together all of your outstanding loans into one low monthly payment. Loan consolidators can help you come up with a plan to pay off all of your debt while maintaining your credit standing. Bankruptcy, unfortunately, ruins your credit rating while a consolidation loan may help you save it.2. Your Life Insurance Policy. Your life insurance policy may have a cash value to it. Consider taking the cash from the policy and using it to pay off or lower your debt. Of course, your payout will be...(related: Debt Relief)
Is Filing For Bankruptcy An Option For You?
Bankruptcy laws give debtors a way to resolve debt by dividing their assets among their various creditors and in some cases will allow debtors to be freed of outstanding debts that cannot be paid, even after the division of assets. For individuals who find themselves unable to pay their debts, bankruptcy can be a viable option. As a debtor, you are entitled to file for bankruptcy. There have been recent changes to bankruptcy laws that may affect your ability to discharge your debts without credit counseling, but individuals who have found themselves unable to pay their debts can still file bankruptcy and be freed of outstanding debts.Chapter 7 bankruptcy is normally used by individuals wanting to ri...(related: Debt Relief)
There are some new bankruptcy laws going into effect before long and many think they are much needed. Of course, that depends on which side of the bankruptcy you are a part of. Creditors are going to be the ones to benefit from the new laws, but there may be some helpful regulations for those filing for bankruptcy as well.The new bankruptcy code requires certain filing procedures that do seem beneficial for the consumer. For instance under the new bankruptcy code, a consumer is required to take a financial counseling course within the 6 months prior to filing...(related: Debt Relief)
Debt Elimination 2
The First Step To Debt EliminationRegardless of your personal and financial circumstances, your education and your background, the chances are the first step you need to take in debt elimination has to take place in your mind. The Western mindset, especially in the US and UK, is firmly fixed on consumer debt. It is the way you have been reared in a debt ridden society.To be realistic, let us assume that total debt elimination is not practical, nor necessarily desirable, from a financial point of view. The one major exception is in buying a house. When you buy a house, very few people are likely to be in a position to do so with cash. Unless they have inheritance, are very wealthy, are mo...(related: Debt Relief)
Debt Consolidation Versus Debt Negotiation
Debt consolidation versus debt negotiation are two options that are available to you if you need debt assistance. When your monthly b...(related: Debt Relief)
New Bankruptcy Law ? Targeting The Wrong People?
Last April, President Bush enthusiastically signed into law the oddly-named Bankruptcy Abuse and Consumer Protection Act. This bill, representing the biggest overhaul of bankruptcy law in twenty-five years, was written in order to discourage "bankruptcy of convenience." Proponents of the bill, which included the credit card industry, say that the bill is necessary in order to stop an avalanche of bankruptcy filings by drug users and compulsive shoppers and gamblers. The law makes it harder to have debts wiped away, requires credit counseling for those considering bankruptcy, and holds attorneys responsible for paperwork errors by their clients in bankruptcy cases. The net result will probably be chaos, as fewer attorneys will handle b...(related: Debt Relief)
How To Become Debt Free
In today's consumer society it is all too easy to get into debt. If you have a few credit cards, car loan, mortgage and possibly student loans it can easily add up. If your income is reduced for any reason you could find yourself in serious financial difficulty.Your goal should be to become debt free. It is possible but will require a major change on how you think about money. You will also have to change your spending habits and spend less money than you make each month...(related: Debt Relief)
Corporate Debt Management ? Perspective On The Why
Entrepreneurs have a tough time in their formative years. They try too many things to get a foothold on this competitive business climate, and that too they try them too soon. When they enter into new fields that have great promise and bet on new products they run the risk of costly failures. New product launches are costly and sometimes may take time to click. Risk is one factor which keeps the Businesses spinning new concepts and makes money out of it. It is this risk that keeps the uninitiated away. If you can't risk and make some bets in business then it is no field for you. But sometimes folks go a little far on investing more and more in a failure with hopes that one day they may click. It is the greate...(related: Debt Relief)
Debt Reduction, A Necessary Endeavour
Massive debt is something many Americans face. Debt reduction is now becoming more and more of a necessity. Even a low amount of debt can cost you a lot in the end and it can take a very long time to pay off. An example: Let's say you have $4000 in credit card debt and your interest rate is 14%. If you only make the minimum payment each month, it will take you 21 years to pay it off and you will have paid over $5100 in interest. Doesn't that sound awful? This is why you may be interested in debt reduction.Debt reduction can be done in many different ways. A recent method being used is to buy some debt reduction software. You can purchase debt reduction software online or at a computer software store. The software usually comes with a debt reduction calculator to help you decipher...(related: Debt Relief)
Different Ways Of Dealing With Debt
Bills, creditors, debt collectors. Are you yearning for the days when all you had to worry about was the money in your piggy bank? If so, you are far from alone. Whether its illness, loss of a job, or simple overspending, it happens to the best of us. But that doesn't mean your financial situation needs to go from bad to worse.Steps You Can Take To Regain Control When Finances Get Out Of Hand...Developing A Budget: Start by doing a realistic assessment of how much money comes in and how much your spend. List income sources, "fixed" expenses (mortgage or rent, car, insurance) and expenses that vary (entertainment, clothing, recreation). Don't leave anything out, no matter how trivial it seems.Obviously, the necessities are your first priority. Then you can prioritize the rest. The bottom line Is, that un...(related: Debt Relief)
How To Protect Yourself: Debt Collections
So you are getting collection calls? You're desk is full of unpaid bills. You dread answering the phone. You are having trouble sleeping at night because you are worrying about a bunch of bills. You feel depressed. Does any of this sound familiar? If it does then, maybe this article can help you.First of all you need to realize that you are not the only one. You are not alone. Then you need to know that there can be light at the end of the tunnel. This article is not meant to be legal advice. It is to let you know your rights under the law. Perhaps it will steer...(related: Debt Relief)
The Human Side - Debt Stress
In all the technical discussion you hear about credit card debt, the best ways to manage it and pay it off and all the rest, one thing goes largely ignored. Credit card debt is extremely stressful, and can have a very negative effect on your life, if you let it. It's as bad as an addiction, always hanging over you, bringing you d...(related: Debt Relief)