Economics Finance

It seems with this financial crisis everyone is getting a bailout. The banks, wall street, car manufactures, even the postal service needs help, how about the average guy? Explore why bankruptcy is one form of a bailout for the average person.

Why Bankruptcy?

The bottom line in today’s financial system for a person who is deep in debt without hope is bankruptcy. The number 1 thing that holds people back from dealing with this issue is fear, lack of understanding. It’s true, this is not a pleasant subject to talk about, but faced with legal ramifications due to debt problems it’s an option you must consider.

Historically bankruptcy is as old as man himself. Debt is not something new, in fact going back there was debtors prison where jail was an option for non-payment. Now compared to that system bankruptcy isn’t so bad. It doesn’t seem right that a bank could go out make risky loans, make billions of dollars, sell them off to the Feds and start all over again, but they do. That’s the way the system works, bankruptcy is what’s provided for the average person. Continue reading ‘Bankruptcy – The Average Person’s Bailout Program’ »

Bankruptcy is the final solution to dealing with your financial issues – it is the measure of last resort and should never be undertaken lightly nor without professional advice and assistance. In a nutshell, bankruptcy is where all your assets are liquidated and sold with the proceeds being distributed to your creditors; after a period of supervision, which is 12 months in the UK, you are now free and clear to restart your life without the burden of your debts.

The devil is in the detail – “all of your assets are liquidated and sold”, and this includes your home, your business if you are self-employed, your vehicles and your investments as well as any savings if you have them.

The most common factor is of course, losing your home and having to move your family to usually, rented accommodation. Continue reading ‘Guide to Bankruptcy’ »

For many people, it’s no big secret that declaring personal bankruptcy is not necessarily good news, that it definitely is not easy and that it comes with consequences. So as well as considering whether you have alternatives to declaring bankruptcy before you decide to do so, you also need to familiarize yourself with the potential harmful consequences and make sure you know how you will deal with them.

First of all, your financial reputation will be tarnished. Your credit record will carry information ascertaining to your declaring bankruptcy for around ten years. This is going to make it very, very difficult to obtain any kind of finance and in situations you find you are able to get credit, you will find yourself on the receiving end of very high interest rates. You can rebuild good credit, however.

You may also find that your family members and close friends have little sympathy. Many people, particularly those of an older generation, a generation before hire purchase and when everyone only bought what they had the cash for, struggle to understand credit, excessive finance and thus bankruptcy. You may also feel embarrassed about declaring personal bankruptcy and feel that relationships are strained with those who feel let down by this. Continue reading ‘Declaring Personal Bankruptcy – Consequences That You Need to Know Before Making a Decision’ »

One of the popular choices for those who need it is nothing other than the simple and basic FHA mortgage program. Way back in the 1930’s, the FHA was already the best option for low income families as well as those who were borrowing money for the very first time. But as the years passed, a lot of additions and expansions to the FHA program envelopes almost all types of people who need to borrow money.

Right now, there are roughly 30 million clients. This is undeniable proof that applying for their loan programs is really beneficial. So what are the advantages of applying for this federal program?

- This type of loan will give you leeway to purchase a house with a miniscule down payment. Future homeowners will only need to shell out a down payment worth 3% of their entire home purchase value. There are also some instances when the down payment can be given in gift form. One must be aware though that aside from the down payment amounts there are usually other fees to take care of such as insurance and processing. Continue reading ‘Good Reasons to Choose the FHA Mortgage Program’ »

When you are bankrupt, you have no easy way of securing a home equity loan. Your bad monetary situation and the black mark you got from the recent bankruptcy compel lenders to treat you as a less likely candidate for a loan. Even within this backdrop, if you follow the right advice and build your credit worth, lenders should not neglect your application for a bankruptcy home equity loan or a bankruptcy home loan.

The main aspect you have to work on after bankruptcy is finding ways to regain your credit worth to an acceptable level. This is vital as banks and lenders check your credit with credit bureaus before lending a bankruptcy equity home loan. If you maintain a healthy bank account and a credit card without misconducts and delays, you will reach the position you were at earlier on after about two years.

Avoid paying minimum rate to your credit card and pay cash somewhat higher than the required minimum rate and be careful to deposit it every month in time. If you have a permanent employment at one place for over a year it will also help you to gain the confidence of the lenders. Normally, interest rates for home equity loans are a little bit higher, but still considerably lower than what is paid for other types of loans.

Sometimes, you may not have a clear idea what options you have to get a loan, due to overworking yourself to raise your credit ratings. Get a loan broker if it is the case, as they know how to find a lender and all other tricks and tips of the trade. Your true bankruptcy situation should be revealed to the broker when contacting him as it helps the broker when discussing with a lender for a suitable bankruptcy equity home loan Continue reading ‘The Good, the Bad, and the Ugly of a Bankruptcy Home Loan’ »

There is no question of a having bad financial reputation when you’re involved with a bankruptcy discharge. But it has a serious negative effect, especially when you need a loan, as usually the lenders overlook you because of your monetary condemnations. Generally it takes about two years from the date of bankruptcy to be approved you for a loan. Nevertheless, you can have a bankruptcy home loan before too long if you know the right technique and make necessary amendments with the money gained to obtain the credit ratings that you need for your future ventures.

If you are still working in the same company when the bankruptcy occurred after a year from the date, you are qualified to apply for a bankruptcy home loan and your chances for the approval of the application are also good. The loan you obtain by securing your house can give you enough credit. But you have to be extremely cautious in your steps to repay the loan as it may jeopardize your position further, jeopardizing even your house.

More often, the chances of obtaining a credit card when you are in a bankruptcy situation are almost zero because banks are reluctant to grant credit cards to those who are bankrupt. Not only the credit card but also other loans you applied for will encounter the same problems. But, a bankruptcy equity home loan is sometimes granted, as there is no risk involved to the lenders, if your home is the security to cover repayment failures. When you make repayments on schedule, you have a great chance of rebuilding your credit reputation. Continue reading ‘Applying For a Bankruptcy Home Loan’ »

Your children rely on regular child support payments for all kinds of necessities: food, clothing, shelter, medical attention. It’s every parent’s responsibility to care for his or her child, and child support payments are a way of enforcing a non-custodial parent’s debt to his or her children. So what happens when the person supposed to make the payments files for bankruptcy? Will it put your children’s welfare into jeopardy? Can your children afford bankruptcy?

Fortunately, even during bankruptcy proceedings, a parent is still required to make his or her court-ordered child support payments. The welfare and care of the children is considered a top priority under American law, and these obligations take precedence over the relief afforded by filing for bankruptcy. The recent Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) helps clarify the rules surrounding such payments, and re-emphasizes the importance of providing for and caring for one’s children.

Chapter 7 bankruptcy is a type of liquidation bankruptcy, in which non-exempt property is sold. The sale of these items is used to pay off one’s creditors. For example, if you owe $10,000 to the bank and can’t pay it, you can file for Chapter 7 bankruptcy, and the money made from the sale of your possessions is used to pay off that debt. Under the BAPCPA, the continued support of any children is considered a serious priority, and proceeds from the sale go towards your court-ordered payment plan first, before creditors are able to take the money. Continue reading ‘How Bankruptcy Affects Child Support Payments’ »

Filing for bankruptcy ruins your credit for 10 years.

Not True. As with any other credit information, the fact of the bankruptcy can stay on your credit report for 7 to 10 years. (Remember, if you are considering bankruptcy it is highly likely that your credit rating has already been damaged, especially for the purpose of obtaining a home loan.) You can start rebuilding your credit, however, even before your bankruptcy is completed. Continuing to make your house or car payment on time can help you reestablish a good credit rating, as can making timely payments on a Chapter 13 plan or on any new loans.

Everyone will know you filed for bankruptcy.

Not True. The fact of your bankruptcy is a public record but unless you are a prominent official or high profile person, people aren’t going to go looking.

After the recent changes to the bankruptcy law, filing bankruptcy doesn’t help much.

Not True. The 2005 changes mean that a few people may no longer be able to file a Chapter 7 case, but most people are still able to get the same relief now as before the law changed. If a Chapter 7 is not available to you because of the 2005 changes, Chapter 13 may still offer you significant relief.

You are a bad person for filing bankruptcy.

Not True. Bankruptcy is a solution to help good people go through a tough financial time. It provides people with the fresh start that they deserve. Congress passed the bankruptcy laws because Congress recognized that we needed a safety net in our economic system for individuals, who have little control over large shifts in our economy or over unexpected personal developments such as job losses and medical expenses. The events of late 2008 should be making it clear to all of us that our financial health is not usually a function of whether we are good or bad persons.

You can pick and choose what to put into bankruptcy. Continue reading ‘Bankruptcy Myths’ »

Bankruptcy and You – Understanding Credit Cards and Credit

Bankruptcy reform has made it more difficult than ever for people to file bankruptcy and enjoy being able to just get rid of credit card debt when they cannot afford it. However, this increase in difficulty when it comes to debt relief has led to credit card companies that are more aggressive than ever before. There is a great debate among the ABA, or American Bankers Association, about who is to blame for credit card debt and so many bankruptcy cases being filed. The lenders blame the consumers, while some blame the creditors for being too aggressive.

There will never be a definitive answer as to who is at fault. However, in order to make sure that consumers are safe no matter what creditors are doing, it is important to be informed. It IS harder than ever to file bankruptcy if a financial debacle is created. It isn’t hard to find debt relief services or companies that can help with debt settlement. It is the responsibility of the consumer, no matter how persuasive creditors might be, to avoid becoming another statistic of credit card debt and let debt take over their lives. Continue reading ‘Credit Cards and Bankruptcy’ »

While bankruptcy is very much a viable and legitimate means of resolving desperate financial situations, people have some very grave and real concerns about a number of potential consequences. A commonly asked question by those considering bankruptcy as a route to solving their problems is, “Will bankruptcy affect my job?” And if so, “HOW will bankruptcy affect my job?”

Well, technically, federal law prohibits any discrimination on the part of your lawyer against you because you have declared or are planning to declare bankruptcy. So, you should not feel concerned about the potential problems with an existing employer. There should be no ill will, negative responses, being overlooked for promotions and certainly not fired over your personal financial situation in regard to bankruptcy. If you receive this type of treatment, your employer is in breach of the law and you could take legal action against him or her. Continue reading ‘Will Bankruptcy Affect My Job? Get the Answers Here’ »