Bankruptcy Overview

Bankruptcy Overview

Two Most Popular Forms of BK Explained Bankruptcy is a federal court proceeding that will help eliminate or payback debt. It is a legally declared or recognized condition of insolvency. Bankruptcy can be utilized by individuals, married couples or businesses that are unable to pay their debts. Bankruptcy is for people that have absolutely no other method of paying back monies owed, and to prove this must pass a means test. Bankruptcy is the solution and legal method designed to forgive debt.   Bankruptcy Filing Requirements…   Undergoing a “means” test. Receiving debt counseling from an approved organization. Submitting a repayment plan. Attending a meeting with creditors.   There are 4 forms of bankruptcy but the two most commonly used forms are Chapter 7 and Chapter 13.   Chapter 7 Chapter 7 bankruptcy is designed to payback the creditors with what you currently have and give you a new start. This will stop the harassment of creditor’s calls and put you on the track to a new financial future. To qualify for Chapter 7 a person must make less than the median income for their area of residence. If they make more than this they can still qualify but they will have to take the means test. The means test is to assess if you are able to pay back the creditors in five years or less. Chapter 7 allows the client the ability to keep some possessions called “Exempt Items.” An exempt item is an item that is not accounted for in the bankruptcy proceedings. While exempt items vary from state to state, generally in Chapter 7 exempt items are the same regardless of the residing state. These items typically include: the primary residence, one vehicle, personal items, retirement savings in pension funds, 401Ks and IRAs. Individuals will only be allowed to keep their home and vehicle if they can afford those payments after bankruptcy.   Chapter 13 Chapter 13 is commonly for “high” income earners with “less” debt and is called the wage-earners bankruptcy. For Chapter 13, you will repay what you owe the creditors, although generally not the full amount. The repayment amount will be carefully calculated. You will be responsible for gathering documents and collecting financial information for all your bills and debts. This information will determine how much you can afford to pay to the creditors without going back into debt. The plan payments...

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Debt Settlement Information

Debt Settlement Information

Debt Settlement Programs That Work: Why Trusted Debt Settlement Programs Can Be Exactly What You Need In Your Life! Debt Settlement, also known as Debt Consolidation, is the process of paying less than is owed on credit cards and other unsecured debts, by negotiating with your creditors. Secured debts such as student loans, auto loans, and home mortgages unfortunately do not qualify for such programs. You will need to be in default on your current loans to utilize any debt settlement program and be able to gain the leverage needed to negotiate with your creditors. Typically, debts can be reduced by 40-70%.   Debt Settlement FAQ’s:   Does Debt Settlement Work?:   Yes! However, debt settlement isn’t for everyone. Debt settlement is designed for those who can no longer make their payments, already behind on their payments, or even considering bankruptcy. Debt settlement, when done properly, is a very safe alternative to bankruptcy. Debt settlement may not be an ideal option for those with very little debt. On average, a debt settlement client has $30,000 of unsecured debt.   Does Debt Settlement Hurt Your Credit?:   Debt Settlement is listed on your credit report, so yes, it will definitely impact your score. Debt settlement only works once you’ve been in default on your loans, because if you’re still current, creditors are unlikely to want to work and negotiate with you. Even though debt settlement can adversely affect your credit score, when compared to filing bankruptcy, debt settlement is far less detrimental to your score.   Is Debt Settlement Better Than Bankruptcy?:   Like we’ve discussed Bankruptcy, comparing debt settlement to bankruptcy, should be on a case by case basis. They both have their pro’s, and they both have their con’s. Bankruptcy will offer you legal protection under the court so that you don’t have to worry about being sued or harassed by creditors during the bankruptcy process. Debt settlement does not provide the guaranteed legal protection that bankruptcy does, however most reputable debt settlement companies will work to assist you in minimizing creditor calls and harassment where they’re able to.   Obviously there’s much to consider when deciding which route to take between bankruptcy and debt settlement. Our recommendation is to speak directly to a bankruptcy attorney to make sure you understand all the ins and outs of the process. This will help you make a more informed decision and...

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Collections and Telephone Calls

Collections and Telephone Calls

How to Stop Collection Calls Consumers have multiple laws at their disposal regarding their credit reports and debt collection. One of the most important laws regarding collection agencies and the collection of debt is the Fair Debt Collection Practices Act (FDCPA). This law provides behavioral standards for acceptable third-party collections. According to this law, at all times, debt collection agencies must treat the consumer with courtesy, respect and fairness. The FDCPA prevents bill collectors from using profanity, making threats, falsely inflating the amounts owed, bullying the consumer or engaging in other abusive tactics. Moreover, this consumer protection statute requires collectors to provide full account history and proof of account ownership before being able to collect a debt or even to report information about it to credit bureaus. Unfortunately, there are collectors out there that don’t abide by the rules. So you benefit by knowing your rights. The except above is from the Lexington Law Blog to view entire post please visit their site by clicking...

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Fair Debt Collection

Fair Debt Collection

Fair Debt Collection Practices Act Against the backdrop of the recent recession, many people, through no fault of their own, are finding themselves in situations where they cannot afford to pay their bills. This all-too-familiar scenario has created a surge in consumer collection accounts as well as a rising number of complaints about overly aggressive bill collectors and their abusive tactics. In March of 2011, the Federal Trade Commission (FTC) released a Congressional report that demonstrated that in 2010 there was a 17 percent rise in the number of complaints involving consumer fair debt collection. Moreover, complaints about third-party bill collectors rose by a stark 25 percent. Overall, in 2010, consumer complaints about abusive and unlawful debt collection practices superseded every other compliant category except for identify theft. Perhaps not surprising because of easy access, the most frequent occurring complaint about these debt recovery agencies was telephone harassment of the debtor. Other complaints included the misrepresentation of amounts owed, demanding unlawful fees, contacting the consumer during prohibited times and more. The except above is from the Lexington Law Blog to view entire post please visit their site by clicking here...

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