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Why Personal Bankruptcy is a Wrong Option
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Getting Approved After Bankruptcy
If you plan to apply for a loan, you need to do some homework beforehand in order to increase your chances of getting approved. A bankruptcy on your credit report is really a drawback, however, some lenders are willing to approve loans even if you have gone through a bankruptcy as long as it has been discharged and you can prove that you are to be trusted. To prove such a thing you need to make su... Read bankruptcy article
Chapter 7 Bankruptcy Eligibility
Most people who file for bankruptcy choose Chapter 7 instead of Chapter 13 because it's fast, effective, easy to file, and doesn't require payments over time. Chapter 7 bankruptcy usually takes the least time to complete. The process is over in about 4 to 6 months, commonly requiring only one trip to the courthouse by the person filing for bankruptcy to emerge debt-free.
However not eve... Read bankruptcy article
Why Personal Bankruptcy is a Wrong Option
An increasing number of retired people are finding themselves faced with more debt than they can handle, and are faced with a decision: is bankruptcy a solution to their financial problems?
Many people find that when they retire their income decreases and they find themselves using credit cards and bank loans to pay their monthly expenses. On a fixed income it is difficult to make the payments on their debts, and then they find that they are getting calls from collection agents and bill collectors. It is very stressful, and they don't know what to do.
When retired or elderly people are faced with debt problems, they have a number of options.
First, they could try to repay the debts on their own. It may be possible to cut expenses to free up cash to service the debts. It may be possible to sell assets they no longer require, such as a car they no longer drive, or a house that is larger than they need.
Second, they could ask family members for help. This is a good option, but it is often embarrassing to go to your children to ask them for help.
Third, they could try to get a debt consolidation loan to consolidate their debts into one monthly payment. This is usually difficult, because on a fixed income it is difficult to make the payments.
Fourth, they could try a debt management plan through a not for profit credit counselor who will negotiate a repayment plan. Again, it is difficult to make large monthly payments on a fixed income.
The next option for residents of Canada would be to try a consumer proposal, or Americans could try a Chapter 13 Wage Earner Plan. This provides protection from your creditors, but also involves potentially difficult monthly payments.
The next option is personal bankruptcy. A bankruptcy eliminates the debts and provides protection from the creditors, but also carries various obligations, including payments as part of the bankruptcy process.
The final option is to do nothing. One of the main reasons for filing bankruptcy is to prevent your creditors from garnisheeing your wages or seizing assets. If you are retired and receiving pension income, you have no wages that can be seized, and if you don't own a fancy house or car, you may not have any assets that can be seized.
In other words, if you have nothing that needs protecting, you may not need bankruptcy protection.
You could open a new bank account at a new bank (to prevent your bank from helping themselves to unauthorized payments) and you could get a new, unlisted phone number (to prevent those annoying calls from collection agents).
Doing nothing is a stressful option, but for a lot of people it is the correct and least costly option.
Before deciding on any of these options you should consult a bankruptcy trustee, bankruptcy attorney, or other trusted financial advisor to review your options and determine which option is correct for you.
J. Douglas Hoyes is a chartered accountant, licensed trustee in bankruptcy, and co-founder of Hoyes, Michalos & Associates Inc., one of Ontario, Canada's largest personal insolvency firms helping people understand bankruptcy, and all of their bankruptcy alternatives. For information about bankruptcy in Canada visit http://www.bankruptcy-canada.ca, and see also information about bankruptcy and the retired people and bankruptcy in Ontario
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Loans and Bankruptcy
The word "Bankruptcy" has been one of the most hated and notorious word in lending business since the time lending business was started. But a surprising fact is that most of us do no know what a bankruptcy actually means, except a most common perception of the meaning of this word-that is in case of bankruptcy, the debtor is just unable to clear off his debt, that in such case his remaining properties are auctioned off to pay off his debtors. Infact, Bankruptcy is a legal proceeding whereby an individual or a business can declare an inability to pay back debts. Bankruptcy allows individuals or businesses to either restructure their debt and pays it back within a payment plan, or have most of their debts absolved completely.
Bankruptcy basically means ''broken+bench'. In past, when a borrower was not able to pay back loans, the debtors' men used to break the workbench of borrower into two, as a mark of punishment for not paying his loans. Now, it has become a legal jargon and a tool to help an individual or business discharge its burden of debts without been swallowed up by it. It is now a legal term, meaning that an individual cannot, within reason, pay off his various debts and has allowed the court system to take over his finances for the purpose of easing off his debts.
Now bankruptcy laws have been enacted to protect both lenders' and borrowers' interest. It was legislated to provide equal and fair measures to satisfy the objectives of all parties. The primary purpose of the bankruptcy lwas were that if a borrower is not able to pay off his debts due to reasons beyond his control, his loans may be waived off. Second, to help a debtor get back his money to the extent the borrower has property available for payment.
Several studies over the years have shown that the primary cause of personal bankruptcy is uncontrollable levels of consumer debt which in most cases is coupled with an unexpected event, such as a major medical expense not covered by insurance, the loss of a job, divorce or death of a spouse. According to economists' surveys, the classic bankruptcy filer is a blue collar, high school graduate who is the head of a household in the lower middle-income class with heavy use of credit.
Different types of bankruptcy exist in different localities and countries, defined by legal codes for certain purposes. The exact types of bankruptcy available differ from one country to the next, in the United Kingdom for example; bankruptcy can only legally be applied to individuals and partnerships, whereas in the United States and Canada, it can be applied to businesses as well.
Despite the serious short term and long-term effects associated with filing bankruptcy, the number of people filing bankruptcy lately has been on the increase. It is estimated that 5.4 people out of 1000 filed for bankruptcy last year and that this rate has been growing at an average of 7%. The alarming ease with which people file for bankruptcy is a growing cause of concern for governments and financial organizations.
Bankruptcy has long been a big question mark in the eyes of the consumer. More often than not, a person's view of bankruptcy is developed by his immediate environment such as his parents or close relatives' personal views or based on what they see as far as ads etc. regarding bankruptcy. Too often these ads are simply put together by bankruptcy attorneys that want your business. Bankruptcy is big business. With 1,597,462 personal bankruptcy filings being made during the calendar year in 2004 you can see that there is a lot of money to be made by bankruptcy attorneys. While not all bankruptcy attorneys are in it for the money it is apparent by the plethora of advertisements online or on TV that make claims such as you'll be on your way to good credit it no time, or claims that it's easy to file that there are bankruptcy attorneys with their own personal gains at the top of their mind.
Here is a list of myths or untrue statements regarding bankruptcy:
All debts are waived off in case you file for Chapter 7 Bankruptcy Protection.
Your credit rating will be improved if you file for bankruptcy
Bankruptcy is an easy process
While bankruptcy may be unavoidable for some individuals due to hardships that they may be experiencing, bankruptcy is not for everyone. Bankruptcy attorneys should try to find other solutions for you before recommending their own help. Review your options before making your decision, as this may have a long term impact and not provide the quick fix some look for when choosing bankruptcy protection.
If you feel you may enter into mesh of bankruptcy, prior to taking any step, you must think and answer yourself two questions:
Should I go for bankruptcy?
Bankruptcy is fully a personal decision and must not be taken under influence of vested interest. You must evaluate your debt level, your capacity to repay, risk factors, advantages and disadvantages of filling bankruptcy, affect on ypur social status, expense on filling bankruptcy etc.
What is the level of risk for bankruptcy?
In case you are thinking of bankruptcy, the first step is to evaluate the risk factor on the basis of record of late payments, overspending, capability to pay minimum amount monthly, etc-If answer to all these is "yes" then you are at risk for bankruptcy and must get some expert advice.
Steve Clark can tell you how to look better, live better and breathe better by giving you tips to improve your finances. He writes on loans. His ideas can help you rejuvenate your money. To find Personal loan UK, secured loans, unsecured loans visit http://www.ezpersonalloansuk.co.uk
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Why Personal Bankruptcy is a Wrong Option
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