Chapter 7 Bankruptcy – What is It?

First – What is a Bankruptcy?

A Bankruptcy is a legal proceeding which is filed in the US Bankruptcy Court system that allows entities (people and corporations) to obtain a discharge of financial obligations of certain debts.

Now what is a Chapter 7 Bankruptcy?

The Debtor (you) must cooperate with a Trustee of the court and comply with the provisions of the Code to receive a discharge. Under Chapter 7 of the Bankruptcy Code, a Trustee is appointed to sell or liquidate any of the debtor’s “non-exempt” assets or property in order to raise cash to pay creditors.

Chapter 7 Bankruptcy is a relatively quick process. It is suggested you find a lawyer to complete the paperwork and do the filing for you. The lawyer will give you some “homework” to do which involves creating a paperwork file of all of your monetary events. Things such as bank statements, credit card statements, several years of tax filings and most anything dealing with money and your life. It is actually a good time to get organized so that you do not get yourself into this kind of trouble again.

You then have a meeting with your lawyer, present all your homework and then they will go over it to make sure every t is crossed and i dotted. After that the lawyer will file with the US Bankruptcy court for you. In out 30 to 45 days, you will get a case number and a hearing date. It is at this time your creditors have the capability to put their claim in on what can be raised and liquidated by the trustee. If they do not claim anything, too bad. If there is not enough to cover their claim, too bad.

In about another 45 days, everything is discharged and you are released from those current debts. Done.

Now why doesn’t everyone do this? There are a lot of reasons. Not everyone will qualify for a Chapter 7 and may end up filing for a Chapter 13 Bankruptcy. Leave the Chapter 11 to the big corporations. Here is a list of Consequences of filing Bankruptcy:

• Loss of Property
• Impact on Credit History
• Availability of Future Credit
• Impact on reputation
• Impact on Employment
• Impact on housing and mortgages
• Impact on the availability of utilities and other services
• Impact on future financial options

I will address these factors and Chapter 13 bankruptcy in future articles.

Are there alternatives to bankruptcy, yes several. Here is a partial list of some alternatives:

• Repayment Plan – Arranged by you with your creditors
• Debt Solver Plan – Arranged by a company and your creditors
• Negotiated Settlement – lump-sum payment to each creditor arranged by you
• Debt consolidation loan
• Home Equity or Refinance loan
• Increase your Income

Please, however be careful of credit “repair” organization, a lot of them just repair your credit report and do not actually work with dealing with your creditors in negotiating a viable solution. Really be careful of the “Payday” loans companies. I have seen their intrests rate work out to over 300% on a compounded yearly basis. And of course, what has gotten into all this mess, do not go for a “sub-prime” loan. it will cost you in the end.

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I want to consolodate my credit card debt so I can pay it off, but dont want it to hurt my credit. I cant get a HELOC, but I need solutions….Is there a company out there that will consolodate the cards and have it not put a blemish on your credit?

The best consolidation company is yourself. You can do everything one of those places can with the right information and everything you need to repair your credit is at:
http://www.thecreditrepairmanual.com

Best of Luck to you!

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If you have less than perfect credit and want help to repair it back to a positive state, you may want to enlist the help of a credit repair counselor.

What is a credit repair counselor?  I call it my father since he’s anal with budgets and money.  But for you, a professional credit repair counselor is someone who will take a look at where you are financially, and then help you go through your credit reports and identify areas where you can make changes to restore your credit rating and your credit score.

Getting Help with your credit is getting easier everyday. Credit repair counselors are everywhere in this economy downturn.  It’s big business since many Americans are finding themselves deeper and deeper in debt.  In fact, over 90 million citizens carry an average debt of about $20,000 not including mortgages.  That’s a lot and is growing every day!  Most of it is credit card debt and is ballooning out of control before most people even realize they’re in trouble and need to get help with their credit.

A credit repair counselor will help you work with your creditors to make payment arrangements or even obtain a debt consolidation loan to help pay them off.  The counselor can help obtain better rates for you and even lower the interest rate you are paying on your outstanding balance.  They’ll work with your creditors and help you with establishing a better relationship with them in the long run.

Once you have developed a plan with your credit repair counselor, they will help you develop a long-term plan that will help keep you from getting into the same situation you were in when you first contacted them.  That means setting up a budget and then learning ways to stick to that budget.  You will likely have monthly meetings with the credit repair counselor initially to address any issues that might arise in your financial dealings.  They will give you tools to help you stick to your budget and stay out of trouble.

On a side note, from personal experience, you must also realize that you need to change when making this step in your life.  It is great that you are taking the step to get help with your credit, but you need to go further and also change your mindset or you will end up in the exact same place or maybe even further in trouble. Change not only your ways, but your thinking. (more on this later)

When looking for a credit repair counselor, do your homework before you sign on the dotted line.  Check out their reputation with the Better Business Bureau and even your local Chamber of Commerce if they are local.  Ask questions and pay close attention to the paperwork they are supposed to present you with.

A reputable credit repair counselor will advise you of your rights as a consumer, disclose the fees for their services in writing, and outline what will be happening during the time they will be working for you.  If they seem to be making outlandish promises that seem too good to be true, don’t hire them and keep looking.  A good credit repair counselor can be a great help toward making you more financially solvent and less stressed about your debts.

And remember, nothing happens until you take the first step!

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Repair Loans with a Consolidation Loan

If you find yourself struggling with bad credit and want to repair it, you may want to look into obtaining a debt consolidation loan.  But if you have bad credit, how in the world will you be able to get a loan?  Well, that’s what debt consolidation loans are for – to help you repair bad credit and eventually get yourself back on the road toward a positive credit score and a solid credit history.

Basically, debt consolidation loans work to repair your bad credit by giving you an amount of money so that you can pay off your individual creditors – which will help repair your credit in and of itself – and then you make one payment each month to the debt consolidation company instead of the individual creditors. These loans are given specifically to people with bad or less than perfect credit to help them repair their credit.

Most debt consolidation loans are at a lower interest rate than that which you might be paying on high interest credit cards, so you will be better off right away just from that point of view.  However, you will be charged a higher interest rate than a regular loan simply because you do have bad credit.  Still, if you can obtain a debt consolidation loan at 9 percent as opposed to paying a credit card 20 percent, it will save money in the long run and get you on the road to credit repair.

There are companies who will help you get a debt consolidation loan to help you repair your bad credit, but they charge a fee for their services and you can easily – well maybe not all that easily – but still you can do it on your own with a little leg work.  Debt consolidation loans are meant specifically for people with bad credit who desperately want to repair that credit and become financially sound again.

Look for a loan with an attractive interest rate – as low as you can possibly get it.  That might mean getting quotes from several different companies, but it’ll be worth it if you get a quote from one company for a 15 percent loan and another company for an 8 percent loan.  Doing your homework can really pay off if you are patient and look at all available options.

Once you get your debt consolidation loan to repair your bad credit, it is essential that you are sure you can make the monthly payments and that you are able to make them ON TIME!  Your goal with a debt consolidation loan is to repair your bad credit and nothing can ruin it quicker than a late or missed payment.  So approach the loan knowing that your payments can be made on time.

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Repair Credit With A Consolidation Loan

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Debt Consolidation Debt Management Credit Repair

When you find yourself in a situation where you need to make serious repair to your credit, a debt consolidation loan or a debt management program may be the way to go.  Credit repair isn’t easy and going it on your own can be difficult, although not impossible.  That’s where debt consolidation companies and debt management companies can be invaluable when it comes to credit repair.

A debt consolidation company can help you repair your credit by obtaining a lower-interest loan that will pay off your creditors and allow you to make just one payment to one company instead of several payments to several companies.  They can also contact your creditors to get a lower payoff amount so that the final amount of the debt consolidation loan you’ll need to repair your credit could be lower.

A debt management company does much the same as a debt consolidation company when it comes to credit repair.  They also obtain a loan to help consolidate your debts, but they also provide counseling services that will help you manage your debt and get you well on your way towards repairing your credit.

When you are looking for a debt consolidation or debt management company to help you repair your credit, there are a lot of things you need to look for.  First, check out their references and make sure they are on the “up and up”.  Their reputation can say volumes about their true abilities to help you repair your credit.  Check with the Better Business Bureau and see if they are registered with them and if any complaints have been filed against them.

Do extensive research when it comes to finding a debt consolidation or debt management company.  Credit repair is very important to you and your life.  Your credit score can mean the difference between getting a reliable vehicle or even owning your own home.  That’s where these companies can help as making repair to your credit can be an overwhelming procedure.

What a debt consolidation and debt management company will do is walk you through the credit repair process step by step and take some of the pressure off of you when it gets to be too much for you to handle.  They will charge a fee for their services, but it is usually quite reasonable, and they will often work with you to make that payment over a period of time if you are in severe financial trouble.

You can always find more information about credit repair at http://www.EzCreditRepair750.com and to get your free E-course on Credit repair please visit http://EasyCreditRepair750.com 

Now go out there and make it a great day!

David Budlong

http://www.davidbudlong.com

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