Debt reduction and Bankruptcy

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Debt management services
If you are filled up to your head of bills you probably need to utilize one or a few of the debt management services that are available either on the internet or offline. There can be lots of reasons why you are over your head in debt and need a debt recovery; for instance a hospitalization, unemployment, a family emergency and other accidents that have escalated your costs to a high extent.
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Bad credit - Create a payment plan
Bad credit can happen to the best of us. A series of financial events can take place to hinder our ability to pay our debt. A loss of a job or several high paying emergencies, whether it be health related or due to car and house repairs, can put one behind in making payments. Many times people will ignore their late due payment notices for loans which can be the worst possible thing to ... Read debt consolidation article



Debt reduction and Bankruptcy
If you are a product of the 70's or earlier, chances are high that you don't believe in filing for bankruptcy, regardless the financial situation you are in. A friend of mine who started his own business a few years ago is now struggling to keep afloat as debts pile up around him. Despite the advise of friends and family, he refuses to file for bankruptcy, stating he is too proud and wants to avoid the humiliation he feels he would experienced if he declares bankruptcy.

I can understand. We are both the same age, in our late 50's and a product of the 1950's. We both grew up poor and enjoyed financial success after graduating from college. While growing up in rural areas, we were both taught that a real man never gives up and never declares bankruptcy, for to declare bankruptcy is to admit failure. More importantly to people like us who grew up in small towns, we were also told by our folks that when people declare bankruptcy it is published in the local legal news and newspapers, bringing shame to one's entire family.

My father has struggled with financial problems all his life. I know of at least 3 occasions when he should have declared bankruptcy. But no matter how bad things got, he somehow managed to tough it out and is a proud man for it. The price, however, has been enormous. He and my Mom have lived behind the 8-ball all their lives, with every pay check being already spent before it arrived, needed to pay minimum balances on credit cards and loans that had enormous rates.

On at least 3 occasions I've tried to bail them out. They are proud folks and hate accepting money from their son. But each time I pay off bills for them, they only create new bills. In their late 70's now, life has reversed itself and they have become my children every bit as much as my own children, needing me to help them in many ways.

If you are considering bankruptcy as a means of solving your financial problems, you should be aware that a new bankruptcy law was passed in 2005 that makes it much more difficult for U.S. citizens to apply for bankruptcy.

All debtors will now need to get credit counseling before they can file for bankruptcy. They must also receive additional credit counseling on debt management and budgeting before their debts can be erased. Some filers with high incomes will no longer be allowed to use Chapter 7, but instead will have to pay at least part of their debt under Chapter 13.

The new bankruptcy law also imposes new requirements on lawyers, making it more difficult to find an attorney to handle a bankruptcy case (or so lawmakers claim). I'll believe the latter when I see it.

After your bankruptcy case is completed, you will be required to undergo more counseling, learning personal financial management. Only after you can demonstrate to the court that you have completed all counseling requirements can you receive a bankruptcy discharge wiping out your debts.

The net result of the new law is that filing for bankruptcy is no longer an easy matter. If you were not among the tens of thousands who filed before the new law recently came into effect, you may have waited too long. If you're from the old school like my friend and my parents, you may not really care. But those who truly understood the virtues of the old bankruptcy law and the ease of starting life anew with a clean financial slate, would likely tell you that you've missed a golden opportunity.

Craig Whitley is a freelance writer covering consumer products, services and trends, and is a contributing editor to All-Bankruptcy-Data.info He frequently writes topical reviews on good-content websites that provide consumers with useful information.

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Simple Steps To Becoming Debt Free

Getting into Debt is easy.

When you leave school, you can start building a credit record for yourself. The only way to do this is to go into Debt. You think you can handle it: paying off your credit cards every month, staying up to date with all your other monthly payments. You're earning an income, living the high life and you can handle anything that life throws at you.

Then Disaster Strikes - the car breaks down or someone in the family gets ill, and you rapidly realize that you're getting over your head. When the curve balls come your way, getting into debt can sometimes be the only way to cope.

All to soon, the Money coming in just doesn't cover your monthly expenses; you find yourself going deeper and deeper into debt just to make ends meet. And everybody who was so nice about giving you the credit in the first place, suddenly turns nasty and starts making demands.

Nobody likes to find themselves in this situation, yet it happens more often than you realize. It not only affects you emotionaly; it has an impact on everybody around you as well. Nobody like owing money and nobody likes losing sleep over Debt. But what can you do to get out of the downward spiral - so often a feeling of total despair hits you.

Eight Simple Step to get out of Debt.

Well here are 8 steps to actively follow to get the ball rolling and help get you out of debt quicker than you think.

Step 1: The first thing you have to do is to admit to yourself that there is a problem. It's amazing how many people would rather ignore it, and just hope that it goes away. So, admit it, just say: "I'm in big trouble". This step actually forces you to start looking at your problems.

Step 2: Stop making Debt! Right Now.

Step 3: Create yourself a Budget for every month and determine what you're spending where. Look at your income and your expenses and determine how much you can spend on debt repayments.

Step 4: Now comes the hard part. Make a list of all your short-term debts and the full amount that is outstanding on each and every one of them. These include your credit-cards, clothing accounts and even the monthle contract with the video store. Anything that you have to make a monthly payment on where you've received credit. Don't worry about your big debts like your Mortgage and Car Payments. We'll get to those later.

Step 5: Input all of these debts into a spreadsheet and add them up. You'll find this a big eye opener. Now, you have the real picture of what you truly owe. Only now will you be able to actively start attacking your debts. Sort your debts from the smallest debt to the biggest debt. The key is to start with paying the smallest debt off first and then the next in line and so on.

Step 6: Now you need to determine how much extra you can pay every month over and above what you are already paying in monthly repayments. Look at your Budget that you created in Step 3 and see if you have a bit of extra money available from you monthy income after all your expenses have been deducted. If you do - great. If not, see where you can make cuts, such as luxury items on your grocery bill. We're not looking for a big amount, just that little extra.

Step 7: Start paying the extra money you created in Step 6 towards your smallest debt (in addition to the normal monthly repayment) and continue doing this every month until it's paid off. Once that smallest debt is paid off, you'll have some extra money available. Don't spend it! Use he money freed up to pay off the next debt in your list of debts (once again, in addition to the normal monthly fees) until this one is also paid off. What you have here is the snowball effect : Every time you pay a debt off, you'll have bigger and bigger chunks of money available to pay the next one off quickly

Step 8: You've paid off all your small debts and should have quite a pile of extra cash available every month. I know it's tempting to spend it, but the best place for that money to go is into your Mortgage - So invest your money into your own property. Why? Your mortgage is probably the biggest long term debt you will ever sign up for. For every bit of extra cash you pay into your bond in addition to your monthly payment, is offset against the capital amount of the loan. The less capital outstanding on your bond, the lower the monthly interest you have to pay over. And the added benefit is that you'll pay the mortgage loan of faster. It can make upto 3 or 5 years difference. I'm not saying use all of it, but a big chunk of that money needs to go there.

These eight steps will help you get out of debt pretty quickly - It's NOT easy, and requires you to become disciplined with your money. You can get out of the situation, but the only person who can help you out of the hole is You.

Take control. Follow these 8 simple steps. You will be on your way to become debt free in no time at all.

If you have serious problems getting out of debt, consider Debt Consolidation which can give you some breathing space to help you get out of debt

Gerard Korsten runs the website http://www.debtconsolidationweb.info/ to help people get out of the great silent killer - Debt. For more information, please visit the website.


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Debt reduction and Bankruptcy
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