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Next Debt Relief Topic : Repair Bad Credit Yourself - In March 2005, the U.S. financial services industry succeeded in hammering the first nail in their plan to overhaul the nation's bankruptcy system. Repairing bad credit yourself will be more necessary than ever. After contributing millions of dollars to elect Republican candidates sympathetic to their big money interests, banks, credit unions, cred...[ read more]
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Bankruptcy 101
Bankruptcy still remains a mystery in the eyes of many consumers. This article will review the facts of bankruptcy as per written law. Some of the information in this article refers to a manual called "Bankruptcy Basics" published by the Administrative Office of the United States Courts and written by Leonidas Ralph Mecham, Director. What, When and How Does a Debtor Discharge His or Her Debts through Bankruptcy ? A discharge of an individual's debt is a release of an individual's liability from certain specified types of debt. The discharge is a permanent order to the individual's creditors that they refrain from taking legal, collection, written or verbal communication with a debtor regarding the collection of unpaid dollars. This means that once allowed a creditor is to cease all collection activities that they would normally pursue against the debtor. If a Chapter 7 bankruptcy is filed the courts typically give four months for creditors to file a complaint that object the filing. In Chapter 13 cases the courts typically discharge the debt on an average of about 4 years from the date the repayment plan has been entered by the debtor. Without any litigation regarding objections to the discharge, the debtor will automatically receive a discharge once the four month period has expired for chapter 7 filing or after the average four year payback through Chapter 13. What Types of Debt are Discharged? Not all debt can be discharged through a Chapter 7 bankruptcy. For example public fines and debts due to an individual's misbehavior such as drunken driving are not allowed. Certain types of tax claims are exempt. Also child support and alimony are exempt. Guaranteed educational loans or debts for certain condominium or cooperative housing fees would be disallowed. An individual may be able to reorganize some of the debts listed if filing Chapter 13. Can a Creditor Object to a Debtor Attempting to Discharge His or Her Debts? Yes a creditor may object to the filing of chapter 7 bankruptcy. An individual does not have an absolute right to a discharge of their debt. Creditors receive a notice shortly after the case is filed. A creditor who wishes to object has until the time specified in the motion to dispute the individuals filing. In Chapter 13 bankruptcy cases the debtor is entitled to a discharge upon completion of all payments under the plan. Creditors may object to confirmation of the repayment, but can not object to the discharge if the debtor has completed all payments under the plan. How Often May an Individual file for Chapter 7 Bankruptcy? Chapter 7 bankruptcy may only be filed once every 7 years. Chapter 7 bankruptcy will also be denied if a debtor has filed a Chapter 12 or 13 within six years prior to the filing of Chapter 7. Richard is the Media Planner for Debt Reduction Services?a not for profit organization. You can check out more articles regarding debt or other financial advice at http://www.DebtReductionServices.com
Related Products For Download: Read Next : Repair Bad Credit YourselfIn March 2005, the U.S. financial services industry succeeded in hammering the first nail in their plan to overhaul the nation's bankruptcy system. Repairing bad credit yourself will be more necessary than ever. After contributing millions of dollars to elect Republican candidates sympathetic to their big money interests, banks, credit unions, cred...
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RELATED ARTICLES
Credit Counseling or Bankruptcy: Which is Best for You? People often get to a place where they simply can't pay their bills, especially in today's economy which is not particularly sympathetic toward the poor or even the middle class. Inflation has impacted nearly every facet of daily life including food, gas, rent, clothes, utility bills and more. At the same time, salaries, especially in the lower ranges, have utterly failed to keep pace. When you get to the place where you cannot pay your bills and have money left over for food and other necessities, there are some hard decisions that have to be faced. The options are credit counseling and debt management services, or bankruptcy. Both have their pros and cons, so which road to take depends largely on the individual and how severe his or her financial problems have grown. 5 Methods Toward Reducing Your Debt Decreasing your debt is paramount to having a good credit rating as well as giving you peace of mind. You want to get out of debt, but not all debt reduction options may be beneficial. Let's take a look at five debt reduction options which may help you in your quest to get out of debt. Reduce Your Debt With These 5 Tips It's never pleasant to realize that you're in financial hot water, but pretending the situation doesn't exist is NEVER the way to deal with the problem. If you're having trouble meeting monthly payments, find yourself borrowing or using credit cards to meet daily expenses, or have one or more of your credit accounts turned over to a collection agency, it's time for you to get proactive and bring your debts back under control. Below you'll find five ways to reduce your debt. Some take time, all take some level of commitment and effort - but it's worth putting in the time to start cleaning up your debt situation. The 7 Secrets to Getting?and Staying?Out of Debt As vice president of the American Credit Foundation, a nonprofit organization that helps individuals and families manage their debt, Mike Peterson knows firsthand how financial problems can wreak havoc in one's life. Each day, counselors at the Midvale, Utah-based foundation help desperate clients dig themselves out from under piles of unpaid bills, stern notices from collection agencies and ominous foreclosure threats. Debt and Your Dreams You may not realize what that credit card bill is doing to you? Should You Invest In Savings Or Payoff Your Debts? I have faced this financial question 8 years ago and recently I have friends asked me this same question. I think I should write it up so that it may help some of you that having the same situation. Is Independence Overrated? Happy Independence Day from The Money Motivator! Is It Possible to Be Sued For My Debts? It is possible for creditors and third-party collection agencies to use legal means as a way to collect debts. The likelihood of being sued or having your wages garnished depends largely on the creditor that is owed money. It has been my experience that certain creditors are more prone to legal action than others. Free Quick and Easy Money Saving Tips ? Part 1 With the high cost of gasoline and the amount of money needed to lead a comfortable life slowly increasing many consumers may be worried about how to make ends meet. Fortunately there are lots of ways to save money in a variety of areas. Using any of the 5 tips outlined below will leave a little something extra in your bank account at the end of month and eventually could influence the quality of lifestyle you lead. Debt Settlement What is debt settlement? Senate Passes New Bankruptcy Law The United States Senate passed a law on March 10, 2005 that changes the bankruptcy laws in America. It is expected that the House of Representatives will look to pass the same bill in April, which will send it to President Bush for his signature. Since it is well known that President Bush will sign the bill into law, a new bankrupcty law is just one step away from ratification. This law makes it much harder for Americans to file Chapter 7 bankruptcy. So for those of you trying to decide whether to file bankruptcy in the next few weeks, realize you may not have the same options in a couple of months time. Mandatory Credit Counseling for Those Considering Bankruptcy Most Americans are aware of the sweeping changes in U.S. bankruptcy law that were made by Congress recently. These changes, strongly supported by the credit card industry, were designed to make it more difficult for Americans to file for bankruptcy under Chapter 7 of the Federal bankruptcy code. Chapter 7 allows consumers to essentially have all of their debts wiped away by the court. While many people will still be able to file under Chapter 7, many more will have to file under Chapter 13, which requires the establishment of a repayment plan. A less publicized provision of the bankruptcy bill is the one that requires debtors who are considering filing for bankruptcy to first undergo credit counseling. What does this mean for consumers? Taking The Plunge Into Bankruptcy Bankruptcy is one of the most difficult things a person has to do. The decision to file bankruptcy is a hard one. Is it moral to wipe your slate clean through bankruptcy? Is there any way for you to avoid bankruptcy? While everyone has their own opinion on bankruptcy, bankruptcy is often the only option some people and families have. So, what do you do when you are in the midst of being bankrupt? What are your options at this bankruptcy point? A Debt Elimination Process Must Be Initiated From You. The first and maybe most important step in a debt elimination process, is to acknowledge there's a problem and realize that something has to be done with your situation. Some do it before it is too late, though an asthonishing number of people seem to act as if this is not their situation at all. They know that the need to seek advice from a debt consolidator, but they do not. The paradox is that many people are willing to use many years and spend a whole lot of extra money to get out of debt. Don't do like these people. Credit Card Debt & the Unfairness of the Universal Default Clause Let's look at a real world example: A woman purchased a new $4,000 large screen TV a few months ago based on the knowledge her monthly payment was going to be $175, and based on the 9% interest rate charged by her credit card company. For five months straight she made all her payments on time, but in the fifth month she was late paying her mortgage bill, for reasons unknown. She found out a month or two later that her credit card company doubled her interest rate to 18%, thus increasing the payment for the TV to about $190 per month. Even though she was never late on any other payments, she found most of her other credit cards raised their interest rates as well. Even her car insurance company raised their rates. The net effect was she ended up paying nearly $200 per month more because she was late on a single mortgage payment. How to Get Triple A Credit in 25 Days Good credit is everyone's dream. A wise use of credit can go a long way. It certainly makes certain goals in life (like acquiring business loan from bank) easily attainable. Benefits and Drawbacks of Bankruptcy Outlined below are some of the benefits and drawbacks of bankruptcy. It should be noted that bankruptcy is not to be entered into without first having sought professional advice. Credit Card Debt Freedom is Possible Credit card debt have you drowning financially? You're not alone. The average American household carries $9,205 in credit card debt, according to CardWeb, an online industry tracker. Not managed properly, this debt can come to eat up all of your disposable income leaving little or nothing for bare necessities. Some people in this situation respond by charging more but that will only get you further in trouble. Repair Bad Credit Yourself In March 2005, the U.S. financial services industry succeeded in hammering the first nail in their plan to overhaul the nation's bankruptcy system. Repairing bad credit yourself will be more necessary than ever. After contributing millions of dollars to elect Republican candidates sympathetic to their big money interests, banks, credit unions, credit card companies and major retailers have succeeded in making it more difficult to file for bankruptcy relief. About half of those filing do so due to medical catastrophe. You can still get help and repair bad credit yourself. Debt Settlement -- Why the Critics Are Wrong After October 17, 2005, a lot of people are going to become interested in debt settlement as an alternative to bankruptcy. That's the date the new bankruptcy law goes into effect, and it means a rude awakening for many consumers seeking a fresh start in bankruptcy court.
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