The New Bankruptcy Laws Usher In New Challenges

The New Bankruptcy Laws Make it More Difficult to File Chapter 7 Bankruptcy

The most recent modifications to bankruptcy laws might cause it to be more difficult for you to file bankruptcy. If you're in a higher income bracket you'll no longer be allowed to utilize Chapter 7 bankruptcy.  Rather, you'll have to file under Chapter 13 bankruptcy and pay back at least a few of your creditors. If you want to file bankruptcy, you must take part in credit guidance prior to filing.  You're likewise required to go to further counseling in the discipline of budgeting and debt management.  The additional counseling is a necessity to get a release of your debts. And, since the law imposes new demands on lawyers, you might have a more difficult time acquiring a attorney to accept your bankruptcy suit.

Narrow Eligibility for Chapter 7 Bankruptcy

Under the past bankruptcy laws, you were permitted to choose the type of bankruptcy that looked best for you.  In most all cases that would be a Chapter 7 bankruptcy settlement rather than a Chapter 13 bankruptcy repayment. But, if you're in a high income bracket, the new bankruptcy laws won't let you to file Chapter 7 bankruptcy.

To find out whether you're able to file Chapter 7 bankruptcy under the new bankruptcy laws, you must first assess your "current monthly income" against the average income for a household of your size in your state. If your income is lower than or equal to the average, you'll be able to file for Chapter 7 bankruptcy. If it's greater than the average, however, you must pass a new test to file for Chapter 7 bankruptcy.  The new test is called "the means test."

The intention of the means test is to find out whether you have enough available income, after deducting certain permitted expenses and required debt payments, to make payments on a Chapter 13 program. To discover whether you pass the means test, you take off certain permitted expenses and debt payments from your current monthly income. If the money that's left after these computations is below a particular amount of money, you'll be able to file for Chapter 7.

Counseling Prerequisites

Prior to filing for bankruptcy under either Chapter 7 or Chapter 13, you must complete credit counseling with an agency accredited by the United States Trustee's office. The reason for this counseling requirement is that it helps you in finding out whether you actually need to file for bankruptcy or whether an informal repayment program will help you recoup your financial stability.

Counseling is necessary even if it's obvious that a repayment program isn't feasible for you.  You're expected merely to take part in the counseling.  You don't have to consent to any repayment plan the agency proposes. Even so, before you'll be able to file bankruptcy, you'll have to introduce any repayment plan the agency proposes along with a certificate proving that you completed the counseling.

Toward the conclusion of your bankruptcy case, you'll have to attend a another counseling session.  This counseling session is fashioned to teach you personal financial management skills. You can't get the discharge that wipes out your debts until you deliver proof to the court that you completed this requirement.

Lawyers May Be Tougher to Locate -- and a Good Deal More Costly

The new bankruptcy laws do add many complex demands to bankruptcy filings. Many of these brand-new demands impose more responsibilities on lawyers leading to bankruptcy cases being more time-consuming. Among the major new demands on attorneys is that they must now personally vouch for the truth of all the information their clients give them.  That extra requirement means that attorneys must spend a good deal of time on each bankruptcy suit.  So, they'll bill more to take each bankruptcy case.   The new bankruptcy law demands have actually squeezed a few bankruptcy attorneys out of the field altogether.

Many Chapter 13 Filers Will Need to Survive on Less

When you filed Chapter 13 bankruptcy under the past bankruptcy laws,  you had to devote all of your spendable income to your repayment plan.  The previous bankruptcy laws defined spendable income as that which you had remaining after paying your real living expenses. The new bankruptcy laws have modified this computation.  While you still must turn over all of your spendable income, if your income is larger than the median in your state, you don't get to calculate your usable income based on your real expenses.  Instead, you have to work out your disposable income implementing permitted expense sums determined by the IRS. And these permitted expense totals must be deducted from your average income during the six months before filing bankruptcy, not from your pay every month.

Additional Changes

There are additional changes that can impact you negatively if you're filing or looking at filing bankruptcy.  For plain-English guidance in the new bankruptcy laws, get a copy of The New Bankruptcy: Will It Work for You?

Best Way Out Of Debt - Debt Consolidation?

Debt consolidation loans are usually in the form of a second mortgage. The equity that has been accumulated in a home is used as collateral to get a second mortgage, and the proceeds from that second mortgage is used to pay off debts, many of which are unsecured debts.

I am neither advocating nor panning debt consolidation loans here. But before you get a debt consolidation loan in order to alleviate your financial woes, you do need to fully understand what you are doing, why you are doing it, what the cost could be, and if it will, in fact, solve your debt elimination problems.

Home equity is the single largest asset millions of families have if not the only assey they have. Equity is made up of the down payment that was made when the home was purchased, the amount of the principle of the loan that has been paid off, and any increase in the value of the home over the years.

Home loans, including second mortgages, are secured debt. The home is the collateral for the loan. If you fail to make mortgage payments, the loan can be foreclosed and you can lose the home. That's the way it works.  And instead of having debt elimination, you have no home!

When you take out a consolidation loan in the form of a second mortgage, you are very literally betting the farm (the house) that you can make the payments each and every month in full and on time. There is more. Unsecured debt is debt for which you have not pledged any collateral -- think credit card debt. When you charge a purchase to a credit card, you have not used any of your assets as collateral for that loan. And credit card purchases ARE loans. If you use the proceeds from a second mortgage to pay off unsecured debt, it becomes secured debt.

Loan For Bill Consolidation - Beware of Online Risks

Loan for bill consolidation allows you the benefit of a single loan instead of debts from myriad of sources. The non-variable interest rate options that you have with these loans makes them even more appeasing. If you obtain a secured consolidated debt, you can repay the debt faster or in a single installment too.

Are there any risks in getting such a loan service?

A bad credit history may not deter loan servicing companies from aiding you, but they may not be very accommodating in giving you low interest rate loans. This would only get worse if you declare bankruptcy.

Use good discretion while choosing a debt consolidation service

Good services best suited to your requirements are not easy to find, so you must spend a lot of time researching about them yourself. Most companies give a lot of information about the debt management and their services on the web, so it is a very good repository to get maximum information about these programs.

Online Frauds

Guard against online frauds while researching online. The reach and convenience of the Internet has made it a happy hunting ground for unlawful companies and profligate individuals to run fishy programs. Hence make sure that you do a thorough research before going ahead with approaching the institutions.

The most important thing to do while trying to clear all your debts is to zero in on a highly acclaimed institution with impeccable record. Hence, don't rely solely on information from the Internet. Community resources like a relevant ministry or department and banking institutions may provide you with other service companies to you consider.

Go For Authentic Services

By exploring multiple resources, you can differentiate between authentic services and shady ones. Make sure that the company is reliable, legal with a decent past success.

Sign up with a reputable, legal and dependable financial company for a loan for bill consolidation. With proper guidance you could break away from debt in a few years time.

 

 

 

 

 

The New Bankruptcy Laws Present New Challenges

The New Bankruptcy Laws Make it More Difficult to File Chapter 7 Bankruptcy

The most recent changes to bankruptcy laws might make it more difficult for you to file bankruptcy. If you're in a higher income bracket you'll no longer be permitted to use Chapter 7 bankruptcy.  Rather, you'll have to file under Chapter 13 bankruptcy and pay off at least a few of your creditors. If you would like to file bankruptcy, you must take part in credit counseling prior to filing.  You're similarly required to attend additional counseling in the area of budgeting and debt management.  The supplementary counseling is a requirement to receive a release of your debts. And, since the law imposes new demands on attorneys, you might have a tougher time acquiring a lawyer to take over your bankruptcy case.

Restricted Eligibility for Chapter 7 Bankruptcy

Under the past bankruptcy laws, you were allowed to choose the type of bankruptcy that looked best for you.  In most all cases that would be a Chapter 7 bankruptcy liquidation instead of a Chapter 13 bankruptcy repayment. But, if you're in a high income bracket, the new bankruptcy laws won't permit you to use Chapter 7 bankruptcy.

To check out whether you're able to file Chapter 7 bankruptcy under the new bankruptcy laws, you must first measure your "current monthly income" against the average income for a family of your size in your state. If your income is lower than or equal to the average, you'll be able to file for Chapter 7 bankruptcy. If it's greater than the median, however, you must pass a new test to file for Chapter 7 bankruptcy.  The new test is known as "the means test."

The purpose of the means test is to discover whether you have adequate available income, after deducting certain allowed expenses and mandatory debt payments, to make payments on a Chapter 13 program. To ascertain whether you pass the means test, you subtract particular allowed expenses and debt payments from your current monthly income. If the money that's remaining after these calculations is under a particular amount of money, you'll be able to file for Chapter 7.

Counseling Prerequisites

Before filing for bankruptcy under either Chapter 7 or Chapter 13, you must attend credit counseling with an agency authorized by the United States Trustee's office. The reason for this counseling requirement is that it helps you in determining whether you really want to file for bankruptcy or whether an informal repayment program will help you recover your financial stability.

Counseling is compulsory even if it's clear that a repayment plan isn't viable for you.  You're required merely to take part in the counseling.  You don't have to accept any repayment plan the agency proposes. Even so, before you'll be able to file bankruptcy, you'll have to deliver any repayment plan the agency offers along with a certificate proving that you completed the counseling.

Toward the conclusion of your bankruptcy suit, you'll have to go to a different counseling session.  This counseling session is fashioned to teach you personal financial management skills. You can't have the discharge that cancels out your debts until you submit proof to the court that you accomplished this requirement.

Lawyers Might Be Harder to Locate -- and Much More Costly

The new bankruptcy laws do add many complex requirements to bankruptcy cases. Many of these brand-new demands impose more duties on attorneys leading to bankruptcy cases being more time-consuming. Among the major new requirements on lawyers is that they must now personally guarantee the accuracy of all the information their clients give them.  That additional demand means that attorneys must spend lots of time on each bankruptcy suit.  Therefore, they'll bill more to take every bankruptcy case.   The new bankruptcy law requirements have actually pushed a few bankruptcy attorneys out of the field completely.

Some Chapter 13 Filers Will Learn to Survive on Less

When you filed Chapter 13 bankruptcy under the older bankruptcy laws,  you had to contribute all of your spendable income to your repayment plan.  The past bankruptcy laws defined disposable income as that which you had remaining after paying your real living expenses. The new bankruptcy laws have modified this computation.  While you still must hand over all of your available income, if your income is greater than the average in your state, you don't get to calculate your spendable income based on your actual expenses.  Instead, you have to figure your usable income utilizing permitted expense amounts prepared by the IRS. And these permitted expense totals must be withheld from your median income during the six months before filing bankruptcy, not from your actual wages every month.

Additional Changes

There are additional changes that can impact you negatively if you're filing or looking at filing bankruptcy.  For plain-English guidance in the new bankruptcy laws, get a copy of The New Bankruptcy: Will It Work for You?

Outstanding Debt Consolidation Companies For Debt Counseling

If you are having debt difficulties and you are unable to meet your financial obligations, then maybe it is time to start researching for a debt consolidation company in order to get specialized advise, it is through a debt counselor that you can get your finance back to order in a short span of time. However, not all that glitter is gold and some of those services, while looking outstanding, do not delivers on their promises.

A good debt consolidation company will back to you with a customized debit consolidation plan that meets your special needs, these plans are designed after reviewing your financial situation. Consequently, if a debt consolidation agency, without previous analysis start offering or suggesting a plan of action, this should be a warning sign that you should take in consideration.

For example, in order to get debt relief you can go for debt consolidation loans, then you need to search for the best alternative, the one with the lower interest rate will always be your first option. However, loans with longer repayment terms will have a higher interest rate than a debt consolidation loan with a shorter repayment period of time, the interest rate in the later one will be lower and certainly you will save money.

Nonetheless, going with the cheaper option means a higher monthly payment, that in the event you do not pay on time; 1.- You loose the benefits you got paying a higher interest rate and, 2.- You are where you started, searching for debt counseling once again.

How about deciding between a secured debt consolidation loan or the unsecured form.

As you can see, it is not all about going and taking the cheaper options, it is all about deciding what are the better options in your very specific financial situation. Then, specialized debt advise coming up from a trusted and reputable debt consolidation agency could be priceless.

All in all, it is advisable counting on the expertise of a debt consolidation company, just make sure you are working with the right ones, usually those that have been in the market for many years.

In conclusion, by working with the best debt consolidation provider you can find, you get just benefits, do your research and go with a trusted and reputable one. It is in your best interest.

Hector Milla runs the Bad Credit Debt Consolidation website - where you can see his best rated debt consolidation service recommendation - and the Best Debt Management Companies resources center. Find free online debt consolidation tips and bad credit debt management advise respectively. Visit for further information.

 

Debt Consolidation Cons : Some Debt Consolidation Tips to Help When Weighing the Plunge

Are you toying with going through a debt consolidation? If so there are some things here that you may like to look into before you take the plunge.

You first off should think about the consequence that it has on your credit rating account. If you get the debt consolidation from equity in your house then you likely don't have a lot to worry about as it will simply show an increase in the sum of your mortgage. This is not a big deal as long as the house is worth more than the rate of that increase.


Your plastic cards could be a totally different story though. Frequently by making a phone call to your charge card holders you can induce them to settle for a smaller sum owed but when you play that they are then able to bestow remarks to your credit account that curious creditors might deem as a colored spot, such as "account shut be lender" or in some cases "account compensated as agreed". The bill paid as agreed says to other loaners that the complete amount of the previous personal line of credit was not "paid in full" and leaves them cause to doubt your creditworthiness.

The account shut by loaner means the loaner took strides to protect themselves so you could not get more in debt with them, that says that they closed your account because you weren't attending it properly.

The most effective thing to do if you are working to do a debt consolidation of some kind is to utilize your home as collateral because you can then get the caah to pay off all the creditors. Then you can ask to have your accounts closed. This will look more pleasing on the credit rating report. If you have to, talk terms with the companies. But if it is posible, pay them off entirely.

Probably the final thing that you must be aware of is scammers. There are a great deal of them out there nowadays just preying on people who are in what appears to them "grave times". These parties will produce all varieties of promises to save you and get rid of all of your severe debt but once they get your cash nothing happens. Beware of parties that call for payment up front, and always check out the company with the BBB for the domain that they assist in.

You have got to be sure you don't yield out your SSN to anyone you can't believe. Likewise make sure you get everything in writing. Depending on where you acquire your consolidation you may execute all your business on the phone and internet or through your local bank. Just be sure to carry through and make sure the party does everything they assure.

A Simple Debt Reduction Strategy to Follow

Don't beat yourself up if you find yourself in deep debt and in dire need of debt reduction help. You aren't the only one out there. With the right directions, and the desire to pay down your debts, you can turn your finances around.

First Step Toward Debt Reduction

The first, and most important, thing you can do is stop using credit to make purchases. Put away your credit cards and line-of-credit checks, and live as if they didn't exist. Get back in the habit of using cash. This will force you to prioritize your spending and recognize which purchases are ìwantsî and which ones are ìneeds.î

Second Step Toward Debt Reduction

You can pay down your debt a lot easier once youíve stopped using your credit cards. It will be even easier yet to pay those debts off if you have enough money coming in each month to live on cash and pay more than the minimum payments due on your credit cards. If you are married and only one person is holding a job, perhaps the other person can consider applying for a job, whether full-time or part-time. You can also consider starting a home based business to supplement your income.

Third Step to Debt Reduction: Spend Within Your Limits

You should always keep your spending within your limits. In other words, donít let your spending add up to more than your income. Easy credit tempts people to overspend without realizing it, leading them into a kind of bondage, e.g., economic slavery. Free yourself from debt by earning enough money to cover your short term needs and pay off your debt in the long run.

Step Four to Debt Reduction: Always Pay More than the Minimum Due

You always want to pay more than the minimum amount due on your credit card statements. At a minimum, try to put aside 10% to 15% of your income just for paying down debts. The more you can pay toward your debts, the better off youíll be. Strive to pay between three and five times the minimum due. One way to start this is by placing the money youíll need at the end of the month in savings each week. The money will add up quickly, and youíll be able to use it to pay off your debts. 

Paying bills on time and keeping your spending habits in check will help keep your debt reduction plan moving forward. Donít forget that payments made more than 30 days late can stay on your credit report for up to seven years. Nowís the time to stop using credit cards, increase your income, curb your spending and pay off those debts!

One of the ways that many people get themselves into a debt emergency is when they have been victims of credit fraud. The best defense to this is a good offence. Subscribe to a quality identity protection site like Creditlock and rest assured that nobody will be able to get new credit cards in your name.