When individuals or businesses cannot meet with their
financial obligations, many make the assumption that the
only solution is bankruptcy. That is not always the case
though.
If the right steps are taken from the beginning, you can
keep yourself and your family out of financial trouble and
away from bankruptcy.
First off, start by educating your children. Many of us
growing up weren’t presented with the tools and knowledge
to establish and maintain good credit and keep away from
the scare of bankruptcy.
Parents need to be honest with their children about
finances. Teaching children that hard work, no matter the
job, has its rewards and if you spend on a budget, there
will never be a fear of bankruptcy.
Establishing a budget is also key in the prevention of
bankruptcy. You cannot spend what you don’t have. Many
people today have multiple credit cards and are in essence
spending money they don’t actually have, plus more for
interest.
So much so that people are paying off credit cards with
credit cards and causing a terrible chain reaction. Spend
what you can afford, after the bills are paid.
But you will want to make sure you have something socked
away for an emergency. Something along the lines of two
thousand dollars is a good base to have stored away for an
emergency.
It is another step to take to keep out of financial
trouble. Probably the most important thing though is to
watch your bank account. Don’t get yourself into a
situation where you are overdrawn.
The fact is more than a third of adults rely on their banks
overdraft to keep them going on a month-to-month basis.
Such actions are ones that lead individuals on a path to
bankruptcy.
Friday, June 6, 2008
Credit After Bankruptcy
People considering bankruptcy have many questions regarding
how future credit will be affected. Some think that it will
be 10 years before they can get credit again, or that they
will never get a credit card after their bankruptcy.
Common questions debtors have are usually about keeping
current credit cards, establishing new credit and buying a
home.
If money is owed on a current credit card, then it must be
listed in your bankruptcy forms as a debt. These forms are
filed under penalty of perjury and if fraud is detected,
your bankruptcy case can be discharged.
Also perjury is a federal crime punishable by a fine and
time in prison. Neither circumstance is ideal for someone
trying to repair his or her credit. But if nothing is owed
on the card, then it does not have to be listed.
But this doesn’t necessarily mean you will get to keep your
card. Your company may cancel your account as a
precautionary measure.
Credit is now available to the recently bankrupt. Though
most will find high restrictions such as lower limits and
higher interest rates.
But it is not necessarily a good idea to start up right
away with those credit cards. Usually it is what gets
people into trouble in the first place. It is also
important to avoid credit repair scams.
After filing for bankruptcy, many people are afraid they
wont be able to buy a home for 10 years while they have a
history of bankruptcy on their credit report.
Usually 18-24 months within a bankruptcy discharge, debtors
can qualify for a loan on the same terms as if they had not
filed for bankruptcy.
how future credit will be affected. Some think that it will
be 10 years before they can get credit again, or that they
will never get a credit card after their bankruptcy.
Common questions debtors have are usually about keeping
current credit cards, establishing new credit and buying a
home.
If money is owed on a current credit card, then it must be
listed in your bankruptcy forms as a debt. These forms are
filed under penalty of perjury and if fraud is detected,
your bankruptcy case can be discharged.
Also perjury is a federal crime punishable by a fine and
time in prison. Neither circumstance is ideal for someone
trying to repair his or her credit. But if nothing is owed
on the card, then it does not have to be listed.
But this doesn’t necessarily mean you will get to keep your
card. Your company may cancel your account as a
precautionary measure.
Credit is now available to the recently bankrupt. Though
most will find high restrictions such as lower limits and
higher interest rates.
But it is not necessarily a good idea to start up right
away with those credit cards. Usually it is what gets
people into trouble in the first place. It is also
important to avoid credit repair scams.
After filing for bankruptcy, many people are afraid they
wont be able to buy a home for 10 years while they have a
history of bankruptcy on their credit report.
Usually 18-24 months within a bankruptcy discharge, debtors
can qualify for a loan on the same terms as if they had not
filed for bankruptcy.
Bankruptcy
With so many people in society today finding themselves in
financial trouble more often, the rate of bankruptcy has
been on the rise.
The main purpose of bankruptcy is to give honest debtors a
fresh start, clearing most debts and discharging debtors
from legal obligations and providing the courts with
non-exempt assets to be distributed among the creditors.
Originally a bankruptcy case is started with the filing of
a petition. This petition declares the debtors financial
information and states his intent to declare bankruptcy.
Most individuals, who file for bankruptcy, file a chapter
7. This is a liquidation bankruptcy. This is where the
debtor’s non-exempt assets are sold off and distributed on
the basis or priority amongst the creditors.
Bankruptcy shouldn’t be the first step though. Many people
who find themselves in trouble immediately go to
bankruptcy.
First talk with your creditors and try to work something
out. They would rather take payments than deal with the
paperwork and money that goes into legal action that they
will need to take.
Next, speak with a non-profit debt consolidator. Many
people who think they are deep in trouble are only
borderline, and with some help and creative financial
dealings, debts can be paid off without the initiating of a
bankruptcy case.
When all else fails, a bankruptcy lawyer should be sought.
They are experts in the steps that need to be taken from
filing the paperwork to the court hearing to determine if
the bankruptcy filing is legit. False filing for bankruptcy
is a crime and punishable in court.
financial trouble more often, the rate of bankruptcy has
been on the rise.
The main purpose of bankruptcy is to give honest debtors a
fresh start, clearing most debts and discharging debtors
from legal obligations and providing the courts with
non-exempt assets to be distributed among the creditors.
Originally a bankruptcy case is started with the filing of
a petition. This petition declares the debtors financial
information and states his intent to declare bankruptcy.
Most individuals, who file for bankruptcy, file a chapter
7. This is a liquidation bankruptcy. This is where the
debtor’s non-exempt assets are sold off and distributed on
the basis or priority amongst the creditors.
Bankruptcy shouldn’t be the first step though. Many people
who find themselves in trouble immediately go to
bankruptcy.
First talk with your creditors and try to work something
out. They would rather take payments than deal with the
paperwork and money that goes into legal action that they
will need to take.
Next, speak with a non-profit debt consolidator. Many
people who think they are deep in trouble are only
borderline, and with some help and creative financial
dealings, debts can be paid off without the initiating of a
bankruptcy case.
When all else fails, a bankruptcy lawyer should be sought.
They are experts in the steps that need to be taken from
filing the paperwork to the court hearing to determine if
the bankruptcy filing is legit. False filing for bankruptcy
is a crime and punishable in court.
Alternatives To Bankruptcy
When you’re in a financial bind, bankruptcy is not the only
way out. There are many alternatives to bankruptcy if you
are willing to put out the time and energy. It could save
you much unnecessary hassle.
Bankruptcy is a difficult decision to make so it is best if
there is another solution out there for you.
Begin by calling your creditors. Most are willing to work
with you if you explain to them your situation. Tell them
you are considering bankruptcy.
In many cases, creditors are willing to work out a
different payment plan with you. Don’t hide from them
either. Be straightforward and open about your financial
situation.
Before filing bankruptcy, take a good long hard look at
your finances. Get organized and begin writing out a
budget. Start with your monthly income and deduct your
monthly household expenses.
Understand how you are spending your money and seek out
where you can make cutbacks. Perhaps buying groceries in
bulk, or cutting back on phone services or cable services.
Every little thing helps.
Next you will want to take a look at your credit cards. You
may be able to take the balance from one with a higher
interest to a lower interest one. Then get rid of those
high interest credit cards all together.
Stay away from paying off credit cards with credit cards.
Other things you can try are refinancing a car loan or a
mortgage. Or perhaps you have some family members or
friends who are willing to pitch in to help pay off high
rate debts and avoid bankruptcy.
But remember, this is a loan so when you are in a better
situation, do make sure to pay back those who were kind
enough to help you out.
way out. There are many alternatives to bankruptcy if you
are willing to put out the time and energy. It could save
you much unnecessary hassle.
Bankruptcy is a difficult decision to make so it is best if
there is another solution out there for you.
Begin by calling your creditors. Most are willing to work
with you if you explain to them your situation. Tell them
you are considering bankruptcy.
In many cases, creditors are willing to work out a
different payment plan with you. Don’t hide from them
either. Be straightforward and open about your financial
situation.
Before filing bankruptcy, take a good long hard look at
your finances. Get organized and begin writing out a
budget. Start with your monthly income and deduct your
monthly household expenses.
Understand how you are spending your money and seek out
where you can make cutbacks. Perhaps buying groceries in
bulk, or cutting back on phone services or cable services.
Every little thing helps.
Next you will want to take a look at your credit cards. You
may be able to take the balance from one with a higher
interest to a lower interest one. Then get rid of those
high interest credit cards all together.
Stay away from paying off credit cards with credit cards.
Other things you can try are refinancing a car loan or a
mortgage. Or perhaps you have some family members or
friends who are willing to pitch in to help pay off high
rate debts and avoid bankruptcy.
But remember, this is a loan so when you are in a better
situation, do make sure to pay back those who were kind
enough to help you out.
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