Bankruptcy is a process that can help people or businesses repay their debts under the protection of bankruptcy court or wipe out their debts completely. As soon as you file either type of bankruptcy, your creditors are no longer allowed to take action to collect debt from you without court approval.

Claiming bankruptcy can lower or remove any debt you owe, but it should always be viewed as a last resort, because although it either partially or completely eliminates debt, it also has consequences.

There are two kinds of bankruptcy to claim: liquidation or reorganization. With liquidation, your assets are sold off to pay your creditors. After this sale and repayment your creditors are no longer allowed to request repayment from you, but the bankruptcy will stay on your credit history for 10 years, preventing other creditors from lending you money.

With reorganization, you file a repayment proposal with the courts, which results in you repaying some debts in full, repaying others partially and repaying some not at all. These payments plans usually run from three to five years.

It is important to realize that some debts cannot be forgiven through bankruptcy. Check out the following list:

- Debts you forget to put on your bankruptcy papers
- Alimony or child support
- Debts incurred through injury or death resulting from drunk driving
- Most types of student loans
- Any fines imposed for breaking the law
- Any tax debts incurred

Usually once you have claimed bankruptcy, your wages are garnished and the courts will make payments to your creditors. If you stick with the repayment plan, those creditors may issue you credit in the future. However, you are unlikely to obtain credit from other creditors as the bankruptcy will stay on your credit history for seven years.

Even though bankruptcy can ease the financial burden, it is not for everyone. It will not fix bad spending habits or poor financial planning. And, it will make things considerably more difficult for you financially in the next 7 to 10 years. So, if you can prevent bankruptcy, you will be much better off.

Bankruptcy can be prevented through good financial planning. This means avoiding impulse spending, charging items to credit cards, buying more house than you can afford, making high-risk investments, or getting financially involved with others who have bad finances. Some good things that can improve your finances include creating and maintaining a realistic budget, making responsible purchases and tearing up any unwanted or high-interest credit cards.

If you think your debt is beginning to get out of control, consider consulting a financial expert or a credit counselor. They can help you turns things around.

Tags: chapter 7, attorney certification, bankruptcy, chapter 13, insolvent

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Due to the huge differences in the laws, the congress decided that the only way to protect both lenders and borrowers was to establish a federal system that will override any state laws and codes that are in practice. This means that every case must be filed in the halls of federal justice. Congress gets the authority to do this directly from the constitution.

There are currently 94 different districts in the united states within the federal system. Each of these districts is responsible for a certain area of America when it comes to the legal resolution of debt.

Federal district judges are appointed to serve and represent the certain regions in the matter of liquidation of legal debt. These judges serve for a term of 14 years and can be reappointed once their term is up. They do not serve for life as many other federal judges. These judges are appointed by the “United states court of appeals”, this is where the correct federal circuit is found.

The US federal district judiciary is responsible for any matter that is filed in that particular district. The cases are assigned to the civil or criminal division depending on the specific case.

Debt resolution is normally assigned to the civil departments, however sometimes it would be forwarded to the criminal departments. For example, if the debt reputation has caused a criminal act by either party involved, this case would then be heard by the united states department of justice, and would be prosecuted to the maximum extent allowed by law.

Most cases go to the civil courts, only a handful get referred to criminal courts. in 2005 around 1.5 million cases of insolvency were filed in the federal system. Most of these were distributed to the civil departments, with only a very small percentage going to criminal bankruptcy court.

Tags: bankruptcy statistics, bankruptcy conference, debt, insolvency, bankruptcy court

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After receiving your bankruptcy discharge papers the first thing you will want to do is get a copy of your credit report and make sure that the information reported on it is correct. Did you know that over 90% of the time it is incorrect?

You wll want to make sure that your report is showing the date the bankruptcy was filed and when it was discharged. Make sure that ALL creditors that you included in the bankruptcy are showing that they were and that your balance is $0 and nothing else. Profit & Loss or Charge Offs will lower your credit score. Make sure they report as “included in bankruptcy″ with a $0.00 balance.

If a creditor shows any balance other than $0.00 and it was included in the bankruptcy it will lower your credit score. It will by your responsibility to contact the creditor and have them update your credit report to show the correct information. Be prepared, you may need to contact them several times before they get it right. But don′t stop until it is.

Did you also know your credit score will go up after a bankruptcy? Why? Because all past due, profit & loss and charge offs will now show a balance of $0 instead of a balance past due.

Did you know that if your credit score is over 500 you can purchase a home and get 100% financing? That’s right!! However, you need to realize that you will be paying a premium price in the closing costs and interest rate. If you do some credit repair and wait until the bankruptcy is two years old you can qualify for a Fannie Mae low interest rate loan.

Remember, you are responsible for your own credit report. No one else is going to care about it as much as you. Start working on it now, it’s never to late.

About the author:
Learn how to go from bankruptcy to living a life of financial freedom. At www.life-after-bankruptcy.comyou will discover step by step how to change your life and finally live debt free and financially free.

Tags: CLE, bankruptcy legislation, chapter 7, bankruptcy conference, bankruptcy court

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Bankruptcy is a process that can help people or businesses repay their debts under the protection of bankruptcy court or wipe out their debts completely. As soon as you file either type of bankruptcy, your creditors are no longer allowed to take action to collect debt from you without court approval.

Claiming bankruptcy can lower or remove any debt you owe, but it should always be viewed as a last resort, because although it either partially or completely eliminates debt, it also has consequences.

There are two kinds of bankruptcy to claim: liquidation or reorganization. With liquidation, your assets are sold off to pay your creditors. After this sale and repayment your creditors are no longer allowed to request repayment from you, but the bankruptcy will stay on your credit history for 10 years, preventing other creditors from lending you money.

With reorganization, you file a repayment proposal with the courts, which results in you repaying some debts in full, repaying others partially and repaying some not at all. These payments plans usually run from three to five years.

It is important to realize that some debts cannot be forgiven through bankruptcy. Check out the following list:

- Debts you forget to put on your bankruptcy papers
- Alimony or child support
- Debts incurred through injury or death resulting from drunk driving
- Most types of student loans
- Any fines imposed for breaking the law
- Any tax debts incurred

Usually once you have claimed bankruptcy, your wages are garnished and the courts will make payments to your creditors. If you stick with the repayment plan, those creditors may issue you credit in the future. However, you are unlikely to obtain credit from other creditors as the bankruptcy will stay on your credit history for seven years.

Even though bankruptcy can ease the financial burden, it is not for everyone. It will not fix bad spending habits or poor financial planning. And, it will make things considerably more difficult for you financially in the next 7 to 10 years. So, if you can prevent bankruptcy, you will be much better off.

Bankruptcy can be prevented through good financial planning. This means avoiding impulse spending, charging items to credit cards, buying more house than you can afford, making high-risk investments, or getting financially involved with others who have bad finances. Some good things that can improve your finances include creating and maintaining a realistic budget, making responsible purchases and tearing up any unwanted or high-interest credit cards.

If you think your debt is beginning to get out of control, consider consulting a financial expert or a credit counselor. They can help you turns things around.

Tags: chapter 11, chapter 13, credit card debt, attorney certification, debt

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It’s true that most lenders will see you as a credit risk immediately after bankruptcy, but that doesn′t mean you won′t be able to buy a home. Home loans are somewhat less risky for lenders than unsecured loans (like credit cards or personal signature loans) because the lender will have your home as security.

Even so, every reputable lender wants to be able to expect that a loan will be repaid as scheduled. Fortunately, your credit score is based more heavily on your recent track record than the more distant past. That means that if you can start rebuilding your credit quickly after bankruptcy, control your expenses, and start showing a strong payment history, you won’t look like such a risk to those creditors.

Some studies suggest that within 18-24 months after a bankruptcy discharge, you can qualify for a loan on the same terms you would have received if you had not filed bankruptcy. In other words, most lenders will be much more interested in your down payment, the stability of your income, and the relationship between the loan payments and your monthly income than in your past financial troubles.

In shopping for a home, here are some general rules you should follow:

* Shop around for everything as carefully as you do for the house itself. Your home is likely to be the largest investment you’ll ever make, so it pays to be a smart shopper. Comparison shop for your mortgage and your real estate broker as well as your home. And don′t base your decision solely on the interest rate: factors like the amount of the down payment, the length of the loan, insurance requirements, and associated costs and fees can be just as important.

* Use a mortgage broker–an independent contractor who works with several different lenders to find the best loan for you. A mortgage broker has two important things that you may not: professional expertise and direct access to hundreds of loan products. That means a mortgage broker can help you find the most efficient and cost-effective method of financing for you. Mortgage brokers have also pioneered the “subprime” credit market, using innovative loan programs to allow borrowers who have previously filed for bankruptcy to start enjoying the benefits of home ownership.

* Look for cash-back deals. Despite what you may have heard, real estate brokers’ commissions are not set in stone. The real estate brokerage industry is competitive, and many brokers and real estate web sites offer cash-back or rebate programs if you agree to work with their preferred real estate agents. You may be able to save thousands of dollars on commissions with these programs.

If you’ve filed bankruptcy and you want to purchase a home, the bottom line is that you have to do your homework. That means rebuilding your credit, but it also means taking the time to research your options and get the best loan and the best terms for your particular situation. If you make that investment, you may be pleasantly surprised with your ability to buy the home you want after bankruptcy.

(C) 2006, Total Bankruptcy, Inc. This article may be reproduced in its entirety without limitation and without notice, except that any reproduction must include the entire article, which may not be modified in any way, and must include the author bio information contained herein, including the URL and, if published online, a live link to the URL included therein.

About the Author

Attorney Kevin Chern is President of Total Bankruptcy and former managing partner of the largest consumer bankruptcy law firm in the United States. Mr. Chern has personally filed thousands of personal bankruptcy cases. His book, “Life After Bankruptcy,” shows former debtors how to preserve their “fresh start” after bankruptcy. Visit www.totalbankruptcy.com for more free bankruptcy law resources, news, and articles.

Tags: bankruptcy legislation, CLE, credit card debt, bankruptcy conference, insolvency

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Understanding the Concept of Credit
Do you really understand the concept of credit? If you think credit is all about plastic cards that afford people luxuries beyond their means, you?re wrong. Credit is so much more than a credit or store card. Credit refers to your ability to repay loans and your financial debts. Your Credit Record provides prospective lenders with the information they need to determine whether you are a credit risk or not. Good credit makes you a suitable candidate in the eyes of lenders, and it allows you to obtain finance easily.

On the other hand, bad credit presents a greater challenge. Bad credit will be created if you skip, miss or ignore your payments. Usually it will result if you have borrowed too much money and find you cannot afford the repayments. All too often though, bad credit happens to good people. People do fall on hard times and make mistakes. The good news now is that some lenders realise this and they are happy to consider you even if you have a less-than-perfect Credit File.

The Bad Credit, Bankruptcy and Mortgage Reality
There is definitely hope for people living with bad credit and bankruptcy if they are seeking to own their own home. Here is a summary of the changes the mortgage industry has experienced recently, compliments of non-conforming lenders and brokers:

? Lenders look beyond credit scores: Some lenders will use a scoring system to assess your suitability for a loan. In other words, they will refer to your Credit File and application to determine if you are a credit risk or not. If you have bad credit or bankruptcy, your score will be much lower, however, today some lenders (not the banks though) will look beyond the score and assess your individual situation on its own merits. As long as you are taking active steps to demonstrate good money management, there is hope you will obtain a home loan.
? Self-Employed people have helped the situation: Non-conforming home loans have become popular over recent years due to the fact that more and more people are becoming self-employed. Self-employed people often have no financial data to support their application, so they apply for what are commonly referred to as ?Low Doc? loans, offered by non-conforming lenders. These loans are similar to those granted to people with bad credit or bankruptcy issues. Lenders are more lenient with these loans, provided you are demonstrating good money management practices.
? Non-conforming loans are competitive: Forget the talk about home loans for bankrupts and people with bad credit only being possible with a high interest rate. It?s not the case. Due to the fact that the non-conforming market is becoming more competitive, so too are the loans. They now come with a full range of features comparable with standard loans. Redraw facilities and offset accounts are just a few of the inclusions. The interest rates aren?t much higher than standard loans either now, which really makes it so much easier.

Is a Non-Conforming Loan Right for Me?
To find out, simply talk to your specialist broker today. If you have a bad credit situation, talk to a bad credit mortgage expert. Opportunities abound!

Tags: debt, bankruptcy statistics, bankruptcy, insolvency, chapter 7

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IVA- An Alternative to Bankruptcy

For many people the idea of going bankrupt feels them with horror- and it’s not difficult to understand why. Going bankrupt has all sorts of social stigmas associated with it, not to mention a whole host of disadvantages and disqualifications.

No wonder then that the IVA, introduced by the government in 1986, is so attractive since it offers a good and legitimate alternative to bankruptcy.

Why Seek an Alternative to Bankruptcy

Bankruptcy has numerous disadvantages associated with it which means that an alternative should be sought if at all possible.

As well as the social stigma attached to bankruptcy, there are a number of disqualifications attached to it such as:

* People who are declared bankrupt lose their professional and business status * Bankrupts are not allowed to hold public office * If you are made bankrupt you have to hand over your valuable assets to the trustee (including your home) * Future employment prospects are prejudiced by bankruptcy * Bankrupts cannot form, manage or promote a business without the court’s permission

Why an IVA is a Good Alternative to Bankruptcy

An IVA does not have any of the social stigmas, disqualifications or disadvantages associated with bankruptcy. This makes it a good alternative to bankruptcy.

IVAs were actually introduced initially as an alternative to bankruptcy.

They are popular because they offer a good alternative to bankruptcy for both debtors and creditors.

From a creditor’s point of view, an IVA is a good alternative to bankruptcy because there are no fees or legal proceeding involved with it.Moreover, an IVA offers a greater repayment of the debt than would possible if the debtor was made bankrupt.

From the debtor’s perspective, an IVA is a good alternative to bankruptcy because it lacks stigmas and disqualifications. Plus with an IVA, it is not unusual for up to 80% of a debt to be written off.

Who is an IVA Suitable For

An IVA is a suitable alternative to bankruptcy for people with debts over ?15,000, multiple creditors and who can afford to re-pay at least ?200 a month.

About the Author

Clear Start, the National Consumer Debt Advice Service offers free IVA advice and help in setting up IVAs: Alternative to Bankruptcy

Tags: attorney certification, CLE, chapter 13, bankrupt, insolvency

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Yes, there is life after bankruptcy, and for many, it is a well deserved relief from the sleepless nights and endless calls and letters from the bill collectors. While some bankruptcies are caused by reckless spending and adopting an extravagant lifestyle, most are caused by unintentional job loss, divorce, illness, and injury.

Bankruptcy is an uncomfortable subject for a variety of reasons. The most obvious is the potential havoc it can wreak on your finances. Running a close second is the negative stigma which is often attached to the process. This negativity is important to mention because strong emotions can sometimes lead to unsound financial decisions with devastating results.

Bankruptcy becomes a viable option for someone who is “upside down” in terms of cash flow. In other words, when a person has more money going out each month than coming in, bankruptcy should be considered if no reversal of this negative cash flow is within sight. The longer someone waits to explore the various options available, the more serious his or her situation may become.

One of the worst things people can do in this situation is to borrow more money to try and pay off their debts. On paper, this is clearly an unwise financial decision. In the real world, however, it is very common for individuals to pursue this strategy in an attempt to buy time and hold off on filing for bankruptcy. On the surface, this is certainly a noble notion; however it can often compound the problem and serves only to delay the inevitable.

For many homeowners in the midst of this upside down cash flow, speaking to a qualified mortgage professional is a much better option. An experienced loan officer can objectively look at your finances and help you determine if restructuring your mortgage would not only help, but possibly even alleviate any need for bankruptcy.

If bankruptcy is the only option, seek out a reputable bankruptcy attorney and credit counselor. A qualified mortgage specialist can provide references for you as well, as he or she works with these professionals on a regular basis. Reliable references are essential in this case because experienced professionals greatly increase the odds of a successful bankruptcy experience. It’s that simple.

When filing for bankruptcy, be completely honest and accurate regarding every aspect of your financial situation. This includes any changes to your income which may occur throughout the process. Bankruptcy is a federal procedure, adjudicated by real judges, and scrutinized by representatives who coordinate with the Department of Justice, the FBI, and the IRS.

Here are some additional steps you can take to make the bankruptcy process as painless as possible:

? Save all paperwork regarding your bankruptcy, and keep it organized. This will prove beneficial after your bankruptcy as you now have all of the pertinent information in one place. Also, be sure to write down your discharge date. It’s surprising how many people forget to do this.

? Establish a household budget. This can be accomplished in many ways, but there are several inexpensive computer programs available which do an excellent job.

? Throughout the bankruptcy, do your best to not only live below your means, but to save as much cash as possible. You never know what you may need it for once the process is completed.

? Be prepared for a barrage of junk mail. There will be sharks on the loose who are hoping to capitalize on your need for credit.

Tips for Rebuilding Credit:

? If you must buy a car, focus on transportation as opposed to style. Buy an inexpensive, used car, and try to get a loan for it. It’s a good idea to figure out what your budget allows in terms of a dollar amount first. This means obtaining financing prior to looking for a car.

? Get a secured credit card. Secured credit cards allow for the cardholder to deposit a said amount of money into an account, thus establishing the spending limit of the card. Missed payments result in deductions from the account. Some of these cards will reward responsible borrowers by upping the limit without an additional deposit. Some will even convert the account into a traditional credit card. (Be wary of offers of “easy credit″ or any card which asks you to call a 900 number. You will be charged for the call.)

? Meet with a credit repair specialist. Not only can they help you clean up the damage to your credit report, they can advise you on specific ways to rebuild the credit you lost as well. One of their first steps is to have you send copies of the discharge document describing what bills you are no longer responsible for to the credit reporting agencies.

So YES, there is life after bankruptcy. Use these tips to help rebuild your credit slowly and carefully. Make sure that you pay ALL your bills ON TIME from now on, as late payments and other negative marks can be devastating at this point. With a little time and a clean credit history post-discharge, you can be back on your feet better than ever.

Tags: insolvency, insolvent, bankruptcy court, CPE, attorney certification

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After filing bankruptcy, most of the US citizens often wonder if they can avail a new loan or go for a refinance of the present loan. No doubt, it’s quite tough to refinance after bankruptcy in US but it’s not impossible. Within a matter of six months after you have filed bankruptcy, financial institutions will once again be interested in refinancing your present loan. You can easily rebuild your credit if you decide to refinance your loan.

You will get a bad credit loan when refinancing after bankruptcy. As evident from the name itself, bad credit loan is tailor made for individuals who are suffering from bad credit. Talking about advantages of bad credit loans, it can assist you in overcoming your bad credit situation. The kind of interest rates you are going to get on these loans will depend on your financial situation. For example, if your credit score is not that good you will have to give high rate of interest.

You may ask: How can I lower the interest rate? If you want to lower the interest rate, it is quite important that you establish a brilliant payment history in the six months following your bankruptcy. You can accomplish this task by paying all your dues on time, including current mortgage.

Getting a credit card is also the good way to start building your credit record. If you are one of those individuals who do not like saving money in your savings account then change your habit because good savings account will give a positive impression to the financial institutions when you apply for a loan. Researching financial institutions is also quite an important factor in your refinancing process. By researching, you will get to know what the condition of the market is at present and how you can get an approval for loan after declaring bankruptcy.

Tags: insolvent, consumer bankruptcy, debt, chapter 7, bankrupt

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Filing for bankruptcy is a decision that must not be taken lightly, as bankruptcy has serious consequences on your financial well-being and your life in general. Not only will filing for bankruptcy ruin you financially, it can also have an impact on your ability to rent or purchase a home, purchase insurance coverage, attend college, and make many other life-altering decisions. Knowing the consequences of bankruptcy can help you to avoid these pitfalls and reorganize your financial situation so that you don’t have to take such a drastic measure.

Filing for bankruptcy can influence your ability to rent or purchase a home because a bankruptcy stays on your credit report for ten years. When potential landlords and mortgage brokers see a bankruptcy on your credit report, they may not want to rent a home to you or allow you to take out a mortgage on your property. Having a bankruptcy on your record shows that you have a past history of not being able to meet your financial obligations, which most landlords and mortgage brokers will consider a deal breaker.

Insurance companies may also check your credit report and find that a bankruptcy has been filed. Since you pay monthly premiums for insurance coverage, these insurance companies want to know that you will be able to make your monthly payments. Having a bankruptcy on your record shows these companies that you were not able to make regular payments on past bills, and these companies may turn you down for insurance due to your history of bankruptcy.

Attending college is one of the many steps you can take in life to provide yourself with more opportunities for education and career advancement. Having a bankruptcy on your credit record can disqualify you from applying for credit-based loans. Missing out on these funds can make it difficult for you to afford to pay for tuition, room and board, books, and other college expenses. This is one situation in which having a bankruptcy on your record can haunt you for life. Without being able to pay for these necessary college expenses, you may miss out on higher-paying jobs with more opportunities for career advancement.

Another consequence of filing for bankruptcy is not as well-known as the effects outlined above. Once you have filed for bankruptcy, particularly Chapter 7, you will begin receiving credit card and cash advance offers once your debts have been discharged. While you may want to take advantage of the opportunity to have a card for emergencies, be very cautious when accepting these offers. Credit card and cash advance companies make these offers available to consumers who have just filed bankruptcy because a Chapter 7 bankruptcy can only be filed every 6 years. By making these offers immediately following a bankruptcy, these companies know their debts can not be put into a bankruptcy case and discharged. This means that you will be liable for these debts and will not be able to file bankruptcy to get rid of them.

Knowing the consequences of bankruptcy can help you make the decision of whether or not to file. It is important to weight each consequence against the benefits of filing for bankruptcy so that you do not lose out on future opportunities for career advancement, education, insurance, or home ownership.

About the Author

Leigh Zaykoski is the President and CEO of A Wealth of Words, Inc. A Wealth of Words is a corporation dedicated to providing high quality web content and business writing services to companies in all industries. Quality web content can help your business reach your target market and make more money. If you’re interested in learning about how web content can boost your business, contact Leigh at ceo@premiumwriter.com.

Tags: attorney certification, insolvency, CLE, chapter 13, CPE

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