Bankruptcy Reform Takes Effect Next Week – What’s Left for Consumers?
(ContentDesk) October 12, 2005 -- Next week, on Oct. 17, new bankruptcy reform laws will go into effect, and many Americans who are reeling from financial turmoil face another shock: They will no longer qualify for elimination of debt through Chapter 7 bankruptcy protection. However, Bradford Stroh, founder and co-CEO of Freedom Financial Network, LLC, reminds consumers that choices do exist to eradicate debt. Weve heard reports of consumers rushing to file bankruptcy, only to be faced with lengthy waits, high legal fees and some firms taking advantage of their desperation, says Stroh. Bankruptcy isnt right for everyone, especially with the new means test for Chapter 7 protection. Fortunately, other options are available to help consumers get their financial health and well-being back on track. 1.
Chapter 13 bankruptcy Even with bankruptcy reform in place, Chapter 13 filings which require consumers to repay debt on a repayment plan will still be available to those whom the state determines, through its means test, have enough income to pay back at least some of their debt. Pro: May reduce debt and stop collection calls. Con: The publicly available bankruptcy judgment remains on a consumers long-term credit report for 10 years. Repayment terms generally are less favorable than those found with debt resolution (see # 4).2. Credit counseling Most credit counseling agencies receive funding from creditors and, in constructing debt management plans for consumers, reduce only interest rates, not principal owed.
Pro: Lower monthly payments possibly. Con: Up to five years of making payments, and minimum payments may not significantly decrease. Enrollment in credit counseling also shows up as a negative on a consumers credit report.The new bankruptcy laws demand that consumers seeking bankruptcy protection obtain credit counseling from an approved agency within six months prior to filing for bankruptcy. However, the Federal Trade Commission and Internal Revenue Service have begun a potentially wide crackdown on the credit counseling industry, shutting down firms engaging in unlawful trade practices or abusing non-profit status. Time will tell whether enough legitimate credit counseling agencies remain to allow consumers in some areas to declare bankruptcy, Stroh says.3.
Creditor negotiation Consumers who cannot make even minimum payments on bills can try calling creditors and asking for temporary hardship status. Some creditors may work out payment plans. Pro: Can provide longer payment terms. Con: Individual consumers may find it difficult to negotiate effectively with large creditors.4. Debt resolution Debt resolution firms negotiate with creditors on the consumers behalf to lower principal amounts due.
Consumers then pay the debt resolution firm a percentage of savings obtained. Debt resolution can obtain significantly better repayment terms than achieved with Chapter 13 and with no bankruptcy judgment especially for those facing financial problems because of a catastrophic event or medical problems. Pro: Savings can often reach up to half the full amount owed. Its the fastest way out of debt without Chapter 7 bankruptcy; consumers can be out of debt completely within three years. Con: It can impair your credit score.
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Freedom Financial Network, LLC (www.freedomfinancialnetwork.com) provides consumer debt resolution services through its Freedom Debt Relief, Freedom Foreclosure Relief and Freedom Tax Relief divisions. The company works for the consumer, negotiating with creditors to lower principal balances due that routinely result in savings of half the amount owed. Based in San Mateo, Calif., Freedom Financial Network serves more than 3,000 clients nationwide and manages more than $100 million in consumer debt, offering an alternative to bankruptcy, credit counseling, and debt consolidation..
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Filing bankruptcy chapter 13 can also be completed for as low as $1500.00 in bankruptcy attorney fee.The system has been perfected over five years and it is...
Bankruptcy > BankruptcyFirst.com Guarantees Affordable Bankruptcy Lawyer Services at a Discount
How To Fix Your Credit Report
Your credit report is your passport to obtaining loans, renting apartments, and getting employment and promotions. Any errors in your report and you will end up paying a higher premium on your insurance or a higher interest rate for loans.
Let's say the negative errors are there and you did not even realize it. Once you wake up to the fact, it is important that you fix them. If you feel the errors are inaccurate, then immediately submit your complaint in writing to any of the three CRAs: Equifax, Experian or Trans Union. These companies will then investigate with the information provider companies, and if the information is genuinely found to be inaccurate, they will delete the same from your report and also provide you with a copy of the same.
Keep in mind that the investigation usually takes up to 30 days.
It is important to submit your complaint in writing. Also, you must submit a copy of the complaint to the information provider company. Keeping a...
Bankruptcy > How To Fix Your Credit Report
You Don't Have To Declare Bankruptcy To Deal With Your Debts
Considering filing bankruptcy? If your finances are in ruins and you're considering filing bankruptcy, there's a few things you should know. Bankruptcy is not your only option. Millions of people credit is devastated by bankruptcy every year. Though filing a Chapter 7 Bankruptcy will clear you of any obligation to creditors, it is devastating to your credit and will ride your credit report for ten years. There are several alternatives to bankruptcy depending on your current situation.
You may consider:Debt Consolidation- Debt Consolidation is an easy and timely alternative. A Debt Consolidation Counselor will evaluate your current situation and past debt and develop a budget for you. They will negotiate payment options with your creditors and simply provide you with the alternative to make one easy monthly payment to them and they will disburse the payment among your creditors. The benefits include:* Usually, a lower monthly payment* Lower percentage rates* Debt payoff in a timelier...
You Don't Have To Declare Bankruptcy To Deal With Your Debts
Bankruptcy > You Don't Have To Declare Bankruptcy To Deal With Your Debts
Chapter 13 Attorneys
Filing for bankruptcy under chapter 13 may not be an easy task for a person who is already harassed by lawsuits filed by the creditors, or their persistent phone calls demanding refunds. Filing for bankruptcy without legal help can prove to be difficult if you are not familiar with the legal jargon. Also, the bankruptcy laws, of late, have become more complicated and stringent. Given this scenario, it is best to take the help of an attorney to fight your case.
The new bankruptcy laws have become more complicated, and you have to find a qualified attorney who is familiar with all the aspects of the laws. You may need expert counseling in preparing your petition for filing for bankruptcy under chapter 13.
This is because you have to file details of your assets, liabilities, sources of income, expenditure, and, in case you are married, file a joint petition with the same information in case of your spouse.
Incorrect information can severely damage your...
Bankruptcy > Chapter 13 Attorneys
Bankruptcy
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