Most courts will require people who are applying for a bankruptcy to get a bankruptcy credit counselor. These counselors will need to be approved by the court. If you fail to meet the requirement of getting a bankruptcy counselor, you may have to start the approval process all over again. Even if your bankruptcy is not a result of financial mismanagement, counseling is often required by the courts.

Most courts will give you a list of different credit counselors that are approved. Before you see a counselor your need to make sure they are approved by the courts. You can often get the courts to approve most counselor you choose; you just need to contact them.

A bankruptcy counseling service will help teach you different skills to help avoid you getting into the same bad credit situation. They can go through all of your debt with you and see if there are any ways that you can recover your financial situation without going through a bankruptcy process. Bankruptcy credit counseling is a good thing to do before you decide to file for bankruptcy because it will show you some different alternatives to bankruptcy.

If you are thinking about applying for bankruptcy then you should get Bankruptcy Credit Counseling. Credit counseling is useful for teaching people different ways to Avoid Filing Bankruptcy.

There are numerous gauges to be watchful for that might warn you that you are on the path to bankruptcy. Following are some subjects to examine and evaluate with your present financial circumstances. If you see yourself accurately illustrated by a number of these issues, then it might be the time to meet with a bankruptcy attorney and work out what your subsequent steps ought to be.

1. Repeated overdraft fees. Everyone gets overdraft fees from time to time. But, if you find that you are overdrafting on an extremely frequent basis, you should inspect your bills along with your living expenses to find out whether you’re living beyond your means, or if you’re completely incapable of producing the funds required to cover your expenses and debt.

2. Children. If you’re in a financial jam and you have children, it becomes very much more difficult to dig yourself out of a pit. Kids are a principal forecaster in bankruptcy cases. It would be smart to evaluate your bills with your monthly account and discern if you’re genuinely able to provide for them.

3. Credit card problems. You should first gather your credit card statements together. See how many credit cards you have. Check how many of them are maxed out and how many are over or right at the limit. You need to be able to keep below 30 percent of the credit limit on your cards and loans. Any other number and you could end up in a dire situation.

4. Collectors are calling. If you’re accustomed to disregard your phone because of non-stop bill collectors calling you for overdue bills, chances are you’re headed for trouble.

Those are only a few questions to consider while you’re looking at your financial outlook. Bankruptcy is a severe choice, and ought to only be a only remaining option for the majority of folks. For most people, there is a good possibility that they may be able to pull themselves out of the hole if they would sit down and devise a arrangement that will eliminate debt over time by giving up some luxuries and obtaining assistance with a monthly budget. But, if you discover that it’s improbable that you’ll be capable of getting your head above water soon, then you might want to consider bankruptcy as a potential fresh start.

If you are asking yourself should I file bankruptcy, try visiting http://filebankruptcypro.com, a popular bankruptcy website that offers tips, advice and resources including information on bankruptcy car loans and bankruptcy home loans. You can also sign up to receive two free eBooks about bankruptcy.

Making the decision to enter bankruptcy is difficult, primarily because there is a longstanding social disapproval of the practice. But as more individuals and businesses find themselves struggling to cope with unemployment, stagnant wages, and rising interest rates on mortgages, credit cards, and other financial instruments it is becoming an unspoken and necessary step for many. The matter is further complicated by intentional disinformation put forth by debt collectors and other entities and the presence of countless finance gurus and laypersons who offer their opinions unsolicited and sometimes with serious misunderstandings about the subject at hand.

Myths and Misery

While it is true that bankruptcy is not the best course of action for everyone, it is often the quickest and most substantial source of relief for a family or business saddled with a wholly unmanageable debt load. Financial stresses can lead to ill physical health and can compromise one’s emotional wellbeing, leading to the unintentional destruction of interpersonal and business relationships. Filing for bankruptcy can put all of your debts and any collection efforts on hold temporarily, and for many classes of debt it can excuse the debt altogether.

This can provide you with a window of time to recover and repair your financial situation so that you can conquer the debts that remain and avoid the errors that landed you in such a tough spot the first time around. You should remain aware of the following common misconceptions about bankruptcy so that they do not prevent you from gaining back your financial independence:

* You will lose your ability to gain credit — though your credit score will suffer for several years, the erasure of debts from the books can still make you an appealing client for many credit card offers
* Doctor and other medical bills cannot be discharged — although there are some kinds of debt that are not dischargeable, medical bills have no such security, generally speaking, and may be discharged
* All of your belongings will be seized and sold — the federal and state bankruptcy laws provide generous exemptions that permit bankruptcy filers to retain many of their possessions, and in the vast majority of cases they are not forced to surrender anything

Knowledge is Power

Do not let an unscrupulous debt collector take advantage of you. To be sure that you have all the facts, contact the Arizona bankruptcy lawyers at the Harmon Law Office, L.L.C.

Joseph Devine

Bankruptcy is a legal procedure that protects an individual or business that cannot pay its debts; it also protects the creditors. These legal proceedings may be:

• Voluntary, which is initiated by an individual or business unable to pay its debts.
• Involuntary: where the creditors take action, provided they prove the individual or business has debts in excess of $5,000.

Resolution

Once the petition is filed, the court will decide under one of the three following means:

Chapter 7 calls forliquidation; that is the sale of the assets of the debtor and the proceedings of the sale used to pay the claims of the creditors. Excluded from this chapter are railroads, banks, insurance companies, or government units. The act specifies that secured creditors have priority over unsecured creditors.

Chapter 11 calls for reorganization; that is the individual or business is given 120 days to present a reorganization plan that eliminates the factors that cause the distress. Such plan must be confirmed by the court. In many instances the plan works and the bankrupt individual or business comes out stronger and ready to function on its own once again. Federated Department Stores, Macy’s, Texaco, and some airlines are examples of reorganization.

Chapter 13 calls for repayment; that is the individual or business must file with the court a plan for repaying specific debts. This chapter applies to debtor with liabilities of less than $350,000 in secured debts, and less than $100,000 in unsecured debt. The plan presented to the court will specify the amounts and periods of time over which they will take place. The court will normally allow three years, but in some cases the period can be extended up to five years. To make sure the plans run smoothly, the court will appoint a trustee who will receive the payments and in turn satisfy the creditors’ claims.

Changes in the 2005 Act

The new law prohibits filers with high income from using Chapter 7. Anyone, whose “current monthly income” is over the median income in his state, doesn’t qualify. In addition they must meet the “means test.”
Another significant change included in the Act of 2005, impacts lawyers rather than the petitioners. Lawyers are now made accountable for the accuracy of the information provided by their clients. Consequently, attorneys taking on a case, must research do due diligence on their own clients; which means that they will spend greater time and resources on a case. Needless to say: they must charge higher fees.

Conclusion

The word ‘bank-ruptcy’ means that something is broken. In the middle ages the money lenders and usurers would be so enraged at their debtors’ inability to pay them back that they would break their benches on the poor souls’ backs-banca rota.

England had a more civilized way of dealing with insolvent debtors people: prison. Mr. Micawber –the garrulous and kind-hearted character of Charles Dickens’ David Copperfield- “was arrested early one morning, and carried over to the King’s Bench Prison in the Borough.”

In the United States we do have a compassionate system of laws that protect the individual from the sometimes impossibility of paying debts. Our legal court system prevents the abuses and misery of the European system.

M. Guerrero

Retired Investment Banker, Corporate Controller, graduate of Columbia University, and Vietnam Vet (1967-1968).

To learn about more about writing techniques visit, http://sentenceopeners.com

By the way, my personal blog contains many articles on accounting and many other subjects. http://writingtolive.com

1. Write out all your monthly expenses, in detail.

Do you have a mortgage or an auto note? If so, what is your interest rate? How much are your monthly payments? What is the outstanding balance on those loans? List them, in full detail.

Next, write down all your necessary monthly expenses. These expenses include things like electricity, telephone, insurance, food, etc. You should know how much you spend each month on all of these items.

After surveying your necessary monthly expenses, take a look at your discretionary monthly expenses. Discretionary expenses are those things that are optional. You don’t have to have them. But, you may enjoy them. Representative discretionary expenses include entertainment, eating out, club memberships and any impulse buys you make in a given month.

Lastly, list all of your credit card debts. Get your last monthly statement from each credit card and write down both the outstanding balance and the interest you’re paying on that balance.

2. Eliminate all non-essential expenses.

If you followed through on step one, you now have a really good idea where your money goes every month. So, go through the list and eliminate all expenses for things you can do without, at least until you get your finances under control. Consider it as a Cash Diet Plan for your spending habits.

After you’ve done away with all superfluous expenses, add up the amount you’ll save every month with those cuts. You’ll probably be surprised at the amount of money you can save every month by just exercising a little more self-control over your spending habits.

You can use the money your saving to pay off your credit card debt. After you’ve eliminated that debt you can consider adding your enjoyable but unnecessary expenses back into your budget.

3. Make your Cash Diet Plan a household project.

If you have a family, they will obviously be affected by your Cash Diet Plan. So get them involved in the planning. You’ll get rid of your debt a lot quicker if you work together on your family spending.

4. Look At cashing in your equity, if any, in assets.

You can refinance your home to take advantage of your equity and thereby lower your monthly payments. You can also use the equity in your home to get a loan and then use the loan to pay off your high interest credit card debts.

If you either don’t own a home or don’t have sufficient equity to pursue an equity loan, don’t forget about other assets you can turn into cash. Think about any antiques or collectables you own. Maybe it’s time you seriously considered selling those assets and using the cash to pay off your debts.

Prepare a list of everything you own that you can quickly and easily sell. Go through your garage and your closets. You’ll probably find some items of value that you can live without. Have a garage sale to turn those items into cash. You may even be able to sell some of them on eBay or through local consignment shops.

Yes, selling your assets is a drastic step but it may be the only thing that stands between you and bankruptcy court. The key is to begin thinking of as many ways as you possibly can to generate cash to pay down your debts as much as possible.

5. Consider consumer counseling.

There are a number of non-profit consumer credit counseling offices whose only purpose for existing is to teach consumers how to get out of debt and stay out of debt. Search for one in your local yellow pages and make an appointment.

The consumer credit counselor will help you better understand your financial state of affairs. He will also help you draft a budget. The counselor will also help you prepare a debt management program. That program will help you get your credit cards paid off as quickly as possible with as low an interest rate as possible.

Your credit score will likely drop-off a couple of points after you sign up with a consumer credit counseling service. But, it won’t be nearly as bad as filing bankruptcy.

6. Take a second job.

You may already believe that you’re working too hard. But, if you’re in such financial trouble that you’re considering bankruptcy, you should look into a part-time second job. You probably won’t get one that will pay very much. But, whatever little amount of additional money you can take in to apply to your debt may just be the difference between filing bankruptcy and averting bankruptcy.

Summary

Bankruptcy is often considered an easy way out of debt. But, there are adverse results to bankruptcy. And, those consequences can follow you around for 7 to 10 years. Keep that in mind and don’t rush into the decision to file bankruptcy. Seek other choices first.

Harvey L. Cox is a licensed attorney, certified mediator and founder of NoLegalese Publishing, a self-help legal publishing site. If you want to know more about your legal rights without difficult legalese, go to NoLegalese Publishing

IVA is an individual voluntary arrangement used as a financial solution to allay debts. It helps those who owe money, repay a percentage of their loan amount to their respective lenders and credit card company. This will be paid up to 5 years and any amount left after that will be nullified. In other words your pending debt after five years will be considered as settled debt. This Individual voluntary arrangement is signed in front of a licensed insolvency practitioner (IP) and the parties involved are borrower and lender. It is a formal agreement signed by both the consenting parties.

It helps to manage your debts wisely and systematically. You need not face any public embarrassment as there is nothing published in the newspaper about your debts unlike bankruptcy filing. You can still apply for another loan despite of facing an IVA. This is a distant reality in case of a bankruptcy filing, no lender will risk his loan amount. It is the most achievable and most affordable way of getting rid of debts. This agreement between the two parties, creditors and debtors will be kept confidential and private only to the parties.

A lender cannot make any collection calls and threaten the borrower for loan payment. He is legally prohibited from doing so. Debtors need not worry about losing their property with this kind of an agreement. But with bankruptcy filing, there is always a fear of collateral repossession. Reach out to a professional and licensed insolvency practitioner and set things right.

Kirthy Shetty
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You must consider the various alternatives to bankruptcy to save yourself. Before agreeing to or signing on anything just make sure that you have read the whole document and are fully aware of all the consequences. No bankruptcy alternative should be considered with out considering expert’s advice. Seek for experts advice and solutions to avoid bankruptcy.

If your debts are huge and multiple ones, there is no need to file bankruptcy if you don’t have enough equity left in your collateral. Remortgage is an alternative from filing bankruptcy if you have some equity left in your house and you can use that equity against your multiple loans. This helps those with equity to get better loan terms and can pay back in a single monthly installment by clubbing all the debts. But, if you are not left with any equity to apply for remortgage, IVA is the next best option for you. An Individual Voluntary Arrangement is a legal agreement between the debtor and various creditors and it can be considered as the best way for you to clear your debts without declaring yourself bankrupt. You don’t have to lose your home or struggle to pay more than you can afford each month.

Kirthy Shetty
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According to recent reports, outdoor and leisure clothing retailer Blacks Leisure, (Blacks, Millets and Free Spirit) is likely to agree a Company Voluntary Arrangement with its creditors within the next few weeks. This agreement will allow Blacks to close unwanted stores, and gain the support of its creditors to survive.

What is a CVA?

In simple terms a CVA is an agreement where a company’s creditors decide to accept reduced payments and write off debt. This releases the burden of debt on the struggling business and frees up cash to enable it to continue to trade. As a result of the CVA, creditors not only agree that they will write off a certain amount of the money that they are owed. They also have the opportunity to continue to trade with the company into the future. This is certainly a better prospect than the total failure of the business and the likelihood that there will be no returns for creditors at all.

Why has CVA had bad press?

Not uniquely among business recovery service solutions, CVAs have attracted some criticism. Creditors argue that they are forced to accept the terms of a CVA because if they do not, they are threatened with the closure of the company and that they will be left with nothing. In reality this is a flawed argument because a company would only consider a CVA in the first place if it is struggling to repay its debts and facing liquidation. If this situation were allowed to happen, the creditors would lose everything anyway.

A Company Voluntary Arrangement is designed to save the business and get some reasonable return for the creditors. It is not a method of simply avoiding paying the company’s debt. It is seen a more consensual business rescue option than others such as pre-pack liquidation as it requires the approval of 75% of the value of voting creditors to be accepted and set in place. Without this, the CVA cannot be implemented.

In an article in the Sunday Times on the 27th September ( business.timesonline.co.uk/tol/business/industry_sectors/retailing/article6850821.ece ) the author suggests that Company Voluntary Arrangements are most often used by retailers to reschedule their debts and close under performing stores. It is true that during 2009, there have been a number of high profile retailers who have used the CVA solution. Notably JJB Sports plc, Stylo plc and Focus DIY plc have all put forward CVA’s (although Stylo’s was rejected by the creditors). However, the CVA solution can be used by any struggling business whatever its size which needs to renegotiate the debt it owes to its creditors in order to survive.

Derek Cooper is Managing Director of Cooper Matthews Limited, and a member of the Turnaround Management Association UK.

Derek’s experience of both corporate insolvency and business management puts him in a position to be able to understand the challenges facing businesses in today’s economic climate.

Find out more about how this solution could help you at http://coopermatthews.com/company-voluntary-arrangement.html

Cooper Matthews have significant experience in working with small to medium sized businesses to resolve business and personal financial troubles.

With many people right now still on pins and needles where their employment is concerned, Chapter 13 Bankruptcy might not be the great solution the American Government intended for it to be. While it may be nice to retain control and possession of important assets, the demands will continue to exist that any structured debt program under Chapter 13 be adhered to. Consequently, Chapter 7 bankruptcy filings should be expected to rise.

Typically, people with seriously debt trouble during these difficult and dark economic times are more concerned about providing a safe housing environment for their family. This means food for meals (and yes, “soup kitchen” establishments are seeing a rise in traffic through their doors), roof for shelter, and transportation for school and other activities for their children. While Chapter 7 bankruptcy does not allow for a family to stay in their “current” home, it does wipe out all debt.

And people can live just about anywhere. As such, Chapter 13 with its strict expectations may be a lost cause for many who are dealing with debt trouble these days. After all, if any part of the repayment agreement is missed, the Chapter 13 bankruptcy can swell into a Chapter 7 bankruptcy. This may pose too high a risk for many people right now.

In terms of whether one should file for Chapter 7 or Chapter 13, consider whether or not payments on the “kept” assets can be maintained. If there is any question about whether they can, perhaps liquidation under Chapter 7 is a more-wise avenue. Ultimately, the decision will come down to the individual (or couple), but not taking a cold, hard look at the economic possibilities over the next couple of years would not only be silly, but possibly irresponsible.

Chris has more than 16 years of experience in the financial services industry, having helped thousands of clients fix their personal finances. He maintains a debt blog that aims to help people with debt trouble find ways to manage their credit and debt.

–>> Get your FREE Bankruptcy Guide and learn more about Credit Card Debt Assistance by visiting HowToRepayDebt.com

The Bankruptcy Code itself does not even determine when a house is considered “sold” for the purposes of a valid foreclosure sale. This means that state foreclosure laws will most likely be used in cases where borrowers attempt to pay off a loan through bankruptcy, even after a sheriff sale. Another aspect that works in favor of homeowners is that many states require an auction to be confirmed before it is valid.

This means that homeowners who file bankruptcy have rights during the foreclosure process that are safeguarded at least through the sale of the property. These rights may be guaranteed for even longer than that, depending on how the confirmation process of the auction works after the home has been sold by the courts. If there had been a bankruptcy, the lender may not just be able to sell the house and take it over right away.

Redemption rights may extend the rights of the borrowers even longer. In states that have a redemption period, the borrowers are given a set period of time in which to cure the default even after the home has been auctioned at a trustee sale. But for those homeowners in states where a redemption period is not available, filing for bankruptcy may create a pseudo-redemption period through the right to cure.

However, rulings by state courts on this issue may determine how long this extra right to cure lasts. Some courts have ruled that the foreclosure sale process is completed once the gavel falls at the auction. In these cases, filing bankruptcy will not extend the time to cure the default for any significant period of time. Once the auction has been conducted, the sale process is complete, and the right to cure has expired

Other courts, however, have ruled that the sale process is not completed until the appropriate company or government agent has executed a transfer deed after the sale, the purchase price of the auction has been paid in full, and the sale has been confirmed by the court. In these states, homeowners may be able to file bankruptcy and have the property listed as a part of the bankruptcy estate and turned over to the trustee.

If this happens, the lender and local government will not be able to move forward with any other collection activities or actions to transfer the property. The automatic stay is in effect, the homeowners have an interest in the house, and the property is now a part of the bankruptcy proceedings. If the sale is confirmed or the deed transferred after the filing, it may be reversed at a later date as a violation of the stay.

Filing bankruptcy in this situation may result in homeowners having several additional months to cure the default. While the automatic stay is in effect, the lender, new owner, or local government can perform no action to confirm the sale or remove the borrowers from the house. Even if a Chapter 13 is filed, the owners will be able to cure the default through a repayment plan — even though their home was sold at auction.

There are a whole list of problems with filing bankruptcy to stop foreclosure, but for homeowners whose financial situations have recovered and who can cure their default, it may be a decent solution. Even after a sheriff sale, borrowers may be able to submit a plan that allows them to save the home. Sometimes, just filing bankruptcy is enough to set aside a sale and give the owners more time and one more chance.

Nick writes articles on how to stop foreclosure. To read more about various methods to save a home, before or after a foreclosure auction, you can visit his website online here: http://www.foreclosurefish.com/