Tag Archives: bankruptcy

DIY Debt Elimination – The Best Method To Eliminate Credit Card Debts?

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With so many ways advertised on how to eliminate your credit card debt, what makes DIY debt elimination the recommended method? With do it yourself debt elimination you can take control of eliminating your debts and you have your best interests at heart and will work the hardest on reducing and eliminating what you owe.

You don’t need a lot of time to take care of your unsecured credit card debts. I am going to tell you about my personal experiences with the debt snowball, debt settlement and debt negotiation.

At one point I had over $55,000 in credit card debt, $8,000 on a car loan, $35,000 in student loan debt, and $11,000 in IRS tax debt.

It was not pretty. Does any of that sound similar to your situation?

The Best Method To Eliminate Credit Card Debts?

At first I read about how to do it yourself debt elimination and found the debt snowball method. Basically you pay the smallest balance first and work your way up from there, adding the payment on that retired debt to the next smallest balance until all your debts are paid off.diy debt elimination

It worked for me until my debts and expenses exceeded my income due to unexpected medical bills, student loans coming out of deferment and IRS tax debt coming due.

So that left me looking for another debt elimination method. I had not heard good things about personal bankruptcy, debt consolidation or credit counseling. I did hear good things about debt settlement and debt negotiation.

How To Learn About DIY Debt Elimination

So I started reading – I bought some books on DIY debt settlement debt negotiation and bought a course on do it yourself debt elimination. I was able to see how I could eliminate my unsecured credit card debts by negotiating with my creditors, explaining my financial hardship, explaining how I wanted to avoid filing personal bankruptcy, and could offer a lump sum payment on my outstanding balance if they would clear my account with them.

At first they did not want to accept a debt settlement offer. It wasn’t until my credit card accounts were almost 180 days past due that they wanted to accept my debt settlement offers. I was able to negotiate down my debts to 25% and 35% of the outstanding balance. And I was even given 3-4 months to pay the lump sum amount. This allowed me more time to come up with the money to settle my debts. I also had to borrow some from family members.

At the end of the DIY debt settlement debt negotiation process I was able to reduce my $55,000 credit card balance by over $43,000 in less than 6 months for just over $13,000. Talk about DIY debt elimination.

No other debt elimination method works as fast as doing it yourself. A debt settlement firm will offer you a plan that extends 36 or 48 months. The same thing with debt consolidation. Chapter 13 bankruptcy can take up to 60 months. Only Chapter 7 bankruptcy can offer results as fast but most people will not qualify.

Is DIY Debt Elimination For Me?

Now before we finish, debt settlement and debt negotiation are not for everyone. If you cannot manage to save money for a lump sum payment, it is not for you. If you do not have a substantial amount of personal unsecured credit card debt, such as $20,000, $30,000, $40,000, $50,000 or more in credit card debt, then it is not for you. You should look into the debt snowball or highest interest balance payoff methods. You should not be looking into debt consolidation, credit counseling, or bankruptcy for debt amounts $10,000 or below.

Now you know about DIY debt elimination and how you can use it successfully to quickly and legally eliminate your credit card debts without risk of a lawsuit. Learn more about how it works and how you can get started.

Payday Loan Company Forks Over Cash To Negotiate With FTC

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You can find times when you can not wait until your next paycheck and you basically need to have to have just a little bit of additional funds now. Although payday loans serve their purpose, they ought to typically be utilized as a last resort if you are in need of additional income. Recent settlements by the FTC show why payday loan businesses usually have a poor reputation.

Two men who set up a fake payday loan web site were taken to court by the FTC  for scamming consumers out of hundreds of thousands of dollars thought their web site and forced to pay over five million dollars in a settlement. Even though these men were caught inside the act, the truth of the matter is actual payday loan organizations are typically not considerably much better locations to obtain money.

The interest charged on payday loans can swiftly add up. If you’re already struggling with income coming up with the extra income to support a 25-30% interest rate on a loan can be nearly impossible. For folks living paycheck to paycheck, payday loans may be a disaster. The interest that builds up from these loans can trigger some to file for a Minneapolis bankruptcy.

The Minnesota bankruptcy procedure is lengthy and it causes a stain on your credit record which is very hard to overcome. Though it’s a necessary choice for some, if you can steer clear of filing for bankruptcy most financial experts would advise it. You must usually try contacting your creditors just before you file for bankruptcy. Frequently times they are willing to work out a payment schedule that works for you. Soon after all, in a bankruptcy they’ll usually be forced to forgo any payments. It works out considerably better for both you and them if you basically pay them back over a slightly longer period of time.

Debt Recovery Options You Need To Know About

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Unsecured credit card debt is a serious problem among a large number of individuals. A little bit of financial irresponsibility is more than enough to lead to severe debt issues. Credit card debt builds up quickly and grows even faster because of high rates of interest. The good news is, you do have debt recovery options.

The very first step, no matter just what technique you come to a decision to use, should be to set up a budget and take charge of your finances. Set restrictions on your spending in order that you start spending a smaller amount than you get paid and not a lot more. Determine just how much income you wish to save and place toward your debt every month and work your budget around that. If you have a serious amount of financial debt, make a far more rigid budget and become prepared to make more sacrifices to get rid of the debt more quickly.

If you’ve skipped charge card payments, you may be able to negotiate some debt. Talk to your creditors and ask them whether you can work out a smaller debt. For example, if you owe $2,000, inform them you cannot deal with that but you are able to pay $1,200. Use a debt settlement company in the event you don’t believe you are able to accomplish this by yourself. You cannot settle debt if you are current with your payments. Don’t deliberately overlook payments since there are various other options.

An additional debt recovery alternative will be to consolidate your credit card debt. Try to move your balances to a charge card with a lower rate or even a 0% rate if possible. There are also debt consolidation loans obtainable that can move your debt from higher interest credit cards to a reduced interest rate loan. This can also minimize your monthly payments at the same time.

In the event that consolidation and debt settlement is an option and you’re in a position to make your monthly obligations, adhere to this schedule to eliminate the debt far more efficiently and a lot faster. Pay the minimum payments on all of your charge cards and send all the added money toward the credit card having the highest rate. This minimizes the overall amount you are going to wind up paying in interest. When the highest interest rate card is repaid, move to the next highest rate and so on.

Regardless of what solution you make a decision to implement, be sure you stop using your charge cards in the meantime. That will simply make reducing your debt take a lot longer and be a great deal more difficult. The truth is, you will just get into debt further and may never emerge.

If none of these debt recovery alternatives are assisting and you can’t get it under control, bankruptcy may be your only alternative. Talk with a financial professional as well as a bankruptcy attorney to establish your choices.

Is your business looking for debt collection help? Be sure to visit our debt collectors Brisbane site for help in debt recovery.

Wage Earner Plan – Chapter 13 Bankruptcy

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Chapter13 Bankruptcy is quite different from the Chapter7 Liquidation Bankruptcy. Instead of completely wiping away your debt, as compared to Chapter 7, you are required to pay portion of your debt in monthly installments. Another difference between the two is that it’s much easier obtaining a mortgage after bankruptcy after filing chapter 13.

When filing for Chapter 13 Bankruptcy, the individual will agree to recompense his creditors over an extended period of time under the reorganization plan of payment. Time is of the essence so to speak. Yet not all bankrupt debtors are given the time-opportunity to reorganize his assets to be able to pay. The person in debt might still have to prove to the courts that he is eligible to file a Chapter 13 before proceeding. While the Chapter7 bankruptcy filers aim to prove that they can’t pay any of their debts, Chapter13 bankruptcy filers aim to prove that they can pay their debts given the time.

In order to qualify, the indebted must not have an irregular income or a significantly low one, or that his debt must not be way too excessive to be worked out. With that being said, the amount of unsecured debt to be paid should be below $307,000, and the amount of the debtor’s creditor secured debts should not exceed $923,000.

Those that are filing for Chapter 13 would need to obtain a certificate of credit counseling completion form from the US Trustee’s Office. Other documents must be included with these forms such as federal tax returns from previous year, debtor’s property, earnings and spending for the year, and the repayment plan showing the bankrupt’s means to pay debt.

Upon filing, when the bankruptcy court verifies that the debtor has a regular job with regular income, it may order that some monthly payments be automatically deducted from the wages and then sent directly to the bankruptcy court which the appointed case trustee instantly distributes to the creditors. The approval of the debtor’s reorganization plan also prompts the debtor to immediately start making payments within 30-days of filing (again via trustee). Under the Chapter 13 plan, the payments included are child support and alimony, owed employee wages, government taxes, secured debt, unsecured debts, credit cards, medical bills, and re-arranged debt payments.

Reorganize – Chapter 11 Bankruptcy

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Profits of commercial or business enterprises, whether a partnership or corporation, may at some point, go under. At this time, an indebted enterprise may file for a petition for bankruptcy, whether it be voluntary in involuntary. Hence, the Chapter 11 Bankruptcy is mostly used to answer the debt liabilities of the concerned businessmen.

The bankruptcy commercial enterprise may still continue to operate business as usual in order to repay their debts under Chapter 11 Bankruptcy, also referred to as entitled reorganization. Yet, this may be legally allowed only after the enterprise’s creditors and the court have approved to the business’ comprehensible plan to reorganize and repay the debts. Under the Chapter 11 Bankruptcy, the court-approved plan of reorganization may only be granted after the indebted business has presented his business reorganization plan within 120 days of filing the bankruptcy case.

The debtor is required to provide sufficient documents containing information on assets, liabilities, and business affairs for the creditors, and they will evaluate its feasibility. The final court-confirmed draft of the reorganization may include reduction of the debts by repaying only a portion of its obligations and also while completely discharging other debts altogether.

Under the Chapter 11 Bankruptcy, the indebted enterprise may also eliminate his other problematic contracts and leases, as well as recover his assets, and also rescale their business operations in order to return to its normal productivity. The business assumes the identity of “debtor in possession” once they have successfully filed for bankruptcy, and keeps possession and control of all their commercial assets while undergoing the reorganization payment plan.

Unless if the judge decides its necessary, the assets of the business will not be taken over by the US Court Trustee. Once the debtor completes their payment plan of organization, he can then stay clear and move forward.

Thus, in Reorganization, the establishment does not only survive, but in essence also becomes revitalized – restructured – reorganized. Since it is a business, obtaining a mortgage after bankruptcy would be no problem for certain industry expansion.

Liquidate – Chapter 7 Bankruptcy

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Chapter 7 Bankruptcy cancels all your debts. Yet you may also have to sell all your property.

In a Chapter 7 Bankruptcy, a trustee is appointed by the court, and they are responsible for selling or liquidating your estate at government auctions, and all the proceeds will be distributed amont the creditors. Then, you will be discharged, that is, after almost all your assets had been literally, wiped-off. Although filing for Chapter 7 Bankruptcy has a negative side, it allows others to take advantage for a fresh start from their debt. Good enough, the new bankruptcy law limits those who can actually qualify to file the Chapter7 Bankruptcy.

Prospective Liquidation filers would need to undergo a more thorough evaluation called ‘Means Test’, performed in order to identify their true ability to pay their debts. The debtor should be able to prove that their income is lower than the family median before opting into the bankruptcy program. Failure to meet this condition would require these debtors to have a repayment of some of their important debts (after revealing they actually can) instead of being completely relieved (‘discharged’) from most or all of it. Also, individuals who had already previously filed for bankruptcy and was once discharged from it could not file a new bankruptcy case unless the previous case had already come to pass at least 6/8 years. The debtor is required to file for the reorganization or repayment plan if they fail to pass standard eligibility requirements.

In order to be qualified, the debtor must complete the credit counseling course, as well as accomplish a two page petition, and present the certificate to the bankruptcy court and creditors for evaluation. Within these bankruptcy forms, the debtor must give details about his property, current income and its sources, monthly living expenses, other debts, and any type of property that he owns (including exempt properties).

Most state bankruptcy courts also allows filers to keep equity in home, clothing, household furnishings, unspent Social Security payments, and other necessities such as a car and the tools of trade, property owned and money spent during the previous two years, and property sold or given away during the previous two years. The qualified bankrupt is then protected by an automatic stay as well as limited by it. The individual is not allowed to sell any of his property without the courts consent, since his property and debts in hand is technically in the hands of the court.

At the end of the Chapter7 Bankruptcy process, all debts are discharged except debts that automatically survive bankruptcy as with creditor-secured debts, child support, student loans, and some tax debts, as well as court-declared creditor non-dischargeable debts due to debtor’s fraud. Take note, if applying for the near future, a mortgage after bankruptcy could be challenging.

Factors In Chapter 13 Evaluation

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The purpose of a Chapter 13 bankruptcy evaluation is to help you decide if filing bankruptcy is right for you. A person has a choice between two different types of bankruptcy, either Chapter 13 or Chapter 7. Since both these chapters have very different set of rules, getting a Chapter 13 bankruptcy evaluation helps you determine if its the more suitable choice and if you are eligible. Keep in mind, for a chapter 13, obtaining a mortgage after bankruptcy is much easier.

Before you start with a Chapter 13 bankruptcy evaluation, it is important that you understand what Chapter 13 really means. This specific chapter in the US Bankruptcy Code is known as the “Adjustment of Debts of an Individual with Regular Income”.

A payment plan is created and the debt is re-organized in such a way that allows the debtor to afford the monthly installments. This is over a fixed period of time from three to five years. Needless to say, Chapter 13 bankruptcy can be filed only by an individual who has a source of income and can meet regular payments.

These following factors are considered in a Chapter 13 bankruptcy evaluation:

What are your reasons for filing bankruptcy? Are you hoping to put a halt to multiple lawsuits being filed against you? Are you at risk of eviction, repossession or foreclosure of your house? Has a sudden illness or unemployment burdened you with debt? Do you know what the approximate amount of your total debt?

What are the approximate amount of your expenses per month? Spend time assorting through your monthly bills such as personal loans, credit cards, mortgages, medical bills, and student loans. Your real estate and car are valuable asset properties. Also determine the amount and source of your income, which can be employment, pensions, family support.

That various of questions listed in this article are necessary in order to accomplish a structured payment plan when filing for Chapter 13. Just to reiterate, in order to properly pay the creditors, you must prove to have sufficient income to qualify for a Chapter 13 bankruptcy.

If you are considering filing, learn more about this option and then consult with an experienced bankruptcy lawyer to get an expert Chapter 13 bankruptcy evaluation. Most initial consultations are free.

The Aspects Of Chapter 13 Bankruptcy

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Chapter 13 Bankruptcy Evaluation is the chapter of the United States Bankruptcy Code allowing a person’s earning to be collected by a trustee and paid to creditors by means of a court-approved debt-repayment plan, if the person has a regular income.

Chapter 13 Bankruptcy is also referred to as the wage earner plan or the income based plan. Chapter 13 Bankruptcy Evaluation allows a debtor to propose a plan of rehabilitation to extend or reduce the balance of any obligations and to receive a discharge from unsecured debts upon completion of the payments.

For the most part, a person’s main goal for filing Chapter 13 Bankruptcy is to repay some or all of their debt after negotiating the terms. Unlike Chapter 7 which involves liquidation of assets, this process allows the debtor to use whatever income they may have in the future to pay off the creditors. Also, obtaining a mortgage after bankruptcy is much more difficult difficult with chapter 7.

The individual must have a regular income in order to be allowed to file for Chapter 13 Bankruptcy. The United States Bankruptcy Code gives the debtor a ceiling of 5 years, within which the creditors must be paid back. While the attorney safeguards interests, the entire process is carried out under the supervision of the courts.

Listed below are the steps required to file Chapter 13 Bankruptcy:

  • Prepare a budget, and determine if Chapter 13 Bankruptcy is right for you.
  • Figure out of there are other ways to tackle your debt problems before filing for Chapter 13 Bankruptcy.
  • Determine and implement methods of dealing with secured creditors.
  • Devise a Chapter 13 Bankruptcy Evaluation plan, and fill out the forms.
  • Complete the process of the filing forms by paying the fee.
  • Attend whatever meetings you maybe required to attend; with the creditors, court hearings and the like.
  • Once all your payments have finally been made, obtain a discharge.

 

The full discharge options is a major advantage for Chapter 13 Bankruptcy Evaluation, as compared to Chapter 7. For example, if a debtor manages to complete all necessary payments in the plan, he or she is given a full plan discharge. As long as it’s approved by the court, the Chapter 13 plan takes into effect, even if creditors disagree with the decision.

Hawaii Bankruptcy Laws For Those Struggling With Debts

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Should you be struggling to pay your obligations, an option is to file for bankruptcy.  Bankruptcy won’t get rid of all your debts and you are going to still be responsible for alimony, child support, student loans, you are most recent back taxes, payment for purchases of a lot more than $550 purchased inside 90 days of filing, fraudulent debts, money advances of $825 or much more within 70 days of filing, and fines or penalties imposed by government agencies.

 

The Hawaii bankruptcy laws allow the consumer to file for bankruptcy under Straight Bankruptcy or Chapter 7 which wipe out all debts except those listed above to give the consumer a fresh begin, or a Wage Earner Bankruptcy under Chapter 13 which allows the filer to draw up a repayment plan over numerous years to pay his debts.

 

Liquidation is the other term for Chapter 7.  It is obtainable to individuals, partnerships, married couples and corporations and is often a straightforward and fast approach to apply for bankruptcy.  Your non-exempt property is gathered by a court-appointed trustee who sells the property and pays your creditors from the proceeds.  It really is probable that there will be no property to gather and sell as chapter 7 circumstances are typically no-asset circumstances.

 

A means test supplied under the Federal bankruptcy laws will decide your eligibility to file for a Chapter 7 bankruptcy.  You are going to be eligible under Chapter 7 if your income is below the family members median income in your state based on the The State Meridian Family members Income by Family members Size information. The test is meant to limit eligibility for Chapter 7 filing to people who are not truly capable to repay their debts.

 

You are going to need to file under Chapter 13 bankruptcy in case you don’t qualify for Chapter 7 bankruptcy.  Your monthly average income much less your mortgage and car payments and some required expenses is your monthly disposable income.  Your disposable monthly income will be multiplied by 60 and this can be the amount you may be able to pay over 5 years.

 

You need to consult your Hawaii bankruptcy lawyer for immediate and sound advice on your debt issues.

Get Collectors To Verify Debt Before You Pay

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debt collectors aren’t your friend if you’re drowning in debt. They want money, and they’ll bend or break the rules to get it. Knowing this, a consumer would be wise to demand proof of the debt in writing prior to proceeding. Post resource – Demand that debt collectors verify your debt before paying by MoneyBlogNewz.

What takes place in bankruptcy with debt

Bankrate.com provides a useful example of a situation in which somebody should request that a debt collector validate a debt. The mortgage on a home is in both names of a couple. The woman has $30,000 in credit card debt in just her name in collections. She is considering filing for Chapter 13 bankruptcy, however the couple is concerned about losing the house in the deal. Bankrate explains that a home is usually okay in both a Chapter 13 and Chapter 7 bankruptcy although there are other potential complications that an attorney might be needed for.

Debt collectors could be scared of you

Whenever you have a debt collector to deal with, anything needs to be on paper. Keep away from handing your bank account information out. This is supposed to be done even if they are hoping to get automatic payments out of you. You are able to typically get a fax number or address out of a debt collector. Then, debt validation can be done. Then, you may consider disputing the debt. This may help a lot. You should do debt verification. This is so that the collector proves the original account, that they have the legal right to collect and that you owe the money. You should dispute the debt to stay ahead. This is important if it isn’t a real debt or the information is not accessible from the collector. Few things are as fruitless as giving money to a collection company that might not even own your account.

Know your legal rights

There is the Fair Debt Collection Practices Act to protect consumers. This means collectors have to validate debt if asked to do so. If debt collectors do not do this, they cannot any longer ask for payments from the consumer, in accordance with Price Law Group’s attorney Tom Martin. If the collector continues, the consumer may even be entitled to monetary damages. But that’s not all:

“If a debt collector receives a dispute from a consumer, and the debt collector has been reporting the consumer’s account to the credit bureaus, the collector must also start reporting the account as disputed,” Martin reminds.

As a final note, the “get it in writing” directive must also apply to the consumer. If you pay a debt, make sure you get a receipt. Get everything on paper.

Articles cited

Bankrate

bankrate.com/finance/debt/demand-debt-verification-before-bankruptcy.aspx

Fair Debt Collection Practices Act

ftc.gov/bcp/edu/pubs/consumer/credit/cre27.pdf

Lawyers.com

lawyers.com/Bankruptcy/browse-by-location.html

U.S. Courts

uscourts.gov/FederalCourts/Bankruptcy/BankruptcyBasics/Chapter13.aspx

What happens when you’re drowning in debt?

youtube.com/watch?v=GTudZEujvIo