Can you answer Jeremy F’s question about Bankruptcy?:

I dont have the money to pay. So my question is how bad will it affect my credit, can they sue me , what if i file for personal bankruptcy will it go aways forever. I need answers im desperate.

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If you are dealing with mounting debt and old unpaid bills, you may be a candidate for debt settlement. Some individuals have found it to be the best way to get out from under a large amount of debt. Debt settlement is most successful with unsecured debt such as credit cards, medical bills, and store credit. It is not as effective with secured debt such as a car loan because the asset the debt is secured against, in this case the car, will be repossessed, if the loan isn’t paid in full. And of course debt settlement is not at all appropriate with mortgages.

You should consider this alternative when you find that you are unable to keep up with current credit card payments or have credit cards that are frequently over limit. Once these things start to occur, it is very difficult to break the cycle. Over the limit fees, late charges, and other fees start to kick in and increase your debt total.

Debt settlement is just that: settling your debt with each of your creditors. Not surprisingly, many creditors would rather accept partial payment on a debt, as opposed to no payment at all. When accounts reach a critical point credit card companies realize the odds of receiving payment in full drastically decrease. Many debtors consider bankruptcy at that point which legally eliminates the debt.

If you consider debt settlement as an option, you have the choice of working with a debt settlement company or performing the task yourself.

Settlement companies charge a fee to contact and make arrangements with all of your creditors. Sometimes the fee is in advance of reducing your debt. You pay regardless of whether the settlement company is successful or not. Others charge a portion upfront and the remainder when the settlement is complete, and still others charge a percentage of your entire debt load paid after the settlement is completed. These companies are skilled at performing this service and may you countless hours of negotiation and frustration.

Many creditors are more inclined to negotiate with a company rather than the individual consumer. They have even been known to lower interest rates and remove late charges and over limit fees. It’s easier on you if you don’t negotiate with the creditors. Some creditors may try to browbeat you into a higher settlement or no settlement or threaten you with legal action. Creditors are less likely to do that with a settlement company.

Until the debt is actually settled, not just agreed to, but the payment has been made, the creditor can still take legal action. Or the creditor can turn the account over to a collection agency which means the settlement process starts all over again.

There are several valid reasons to consider debt settlement. First and foremost, you get a fresh start. All your unsecured debt is gone. That means that with hard work and timely payments on any new credit you can re-establish a good credit standing.

Because the majority of creditors are willing to settle for less than the total balance due, your mountain of debt will be paid off more quickly as well. The downside is that each creditor will most likely report the short pay to the credit bureaus and that will hinder you in obtaining new credit.

Debt settlement can stop the credit nightmare if used wisely.



Thanks to Dee Power for contributing this article to our Bankruptcy blog:

Alternatives To Bankruptcy

Bankruptcy Basics provides basic information to debtors, creditors, court personnel, the media, and the general public on different aspects of the federal bankruptcy laws. It also provides individuals who may be considering bankruptcy with a basic explanation of the different chapters under which a bankruptcy case may be filed and to answer some of the most commonly asked questions about the bankruptcy process. Bankruptcy is a process where debts are legally eliminated from ones life. The court is the only one that can grant or deny a petition for Bankruptcy. It does this by reassuring creditors their debts will be repaid and also the individual that they will not lose everything they have. It also takes the pressure received off the debtor knowing that the debt won’t ruin or take over their life.

Bankruptcy is a legal process through which people and businesses can seek to obtain a fresh financial start when they are having financial difficulties and are unable to pay their debts as agreed. When a business files bankruptcy it can be for one of two reasons. One, they actually mean to liquidate and close their doors or two, they are buying themselves more time with their creditors to be able to pay off existing debts. When a person files for bankruptcy, a court eliminates either or part of the existing debts under types of chapter in which they came.

The process is also designed to provide a measure of protection to creditors. Secured creditors are often in a better position than unsecured creditors because they hold lien on the property of the debtor that supports the right to payment.

Whole your bankruptcy case is pending, most creditors cannot try to collect their debts from you directly. They also may not attempt to collect any and all discharged debts excused by the court. However, not all debts are discharged.

There are several causes of bankruptcy. Approximately 90 percent are the result of unemployment, medical bills, or divorce. Every individual situation is different, though a common feature of many bankruptcies are a large amount of debt or credit cards with high interest rates. Filing for bankruptcy is a very personal, serious decision. Most people file when they see no other way out of debt. Once the decision has been made, the company or individual may declare bankruptcy by petitioning the court. This is a request for protection and relief under the bankruptcy code. The person filing for bankruptcy must provide information about his and her assets, liabilities, income, and expenditures. They also must verify that they have undergone credit counseling within the allotted time.

Bankruptcy stops most garnishments, although it depends on why you’re being garnished. What you will be allowed to keep will depend largely on your state laws. Some states allow you to keep all of the equity in your home, while others exempt a certain amount.

There are several Advantages to Filing Bankruptcy:

• A fresh start to your financial life

• Collection efforts are stopped upon filing

• Stops wage garnishments

• Can keep all or at least some of the equity in your home

There are also some Disadvantages to Filing Bankruptcy:

• Stays on credit record for years to come

• Makes getting credit harder if not impossible

• May lower opinion of ones self worth

If you decide to file, you definitely need an experienced bankruptcy attorney. Steer clear of petition preparers, typing services or paralegals. And if you are even considering filing on your own, remember the old adage that a man who acts as his own attorney has a fool for both an attorney and a client.



Thanks to James123 for contributing this article to our Bankruptcy blog:

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