February 4, 2012

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Bankruptcy Statistics for the State of Arizona

February 3, 2012 By Leave a Comment

By Elle Wood -

Every state has been hit hard by financial difficulties over the past few years. The US has been going through a recession, the job market has been terrible, and the housing/mortgage crisis has impacted millions. Like other states, Arizona too, has seen its share of financial difficulties. As a matter of fact, Arizona has been hit a bit harder than many other states when it comes to financial issues.

In 2007, Arizona residents were doing okay, in relation to the rest of the country. The state ranked 40th in terms of bankruptcy claims. When you consider the fact that they country was already well into some serious financial difficulties at this point, being 40th out of 50 states was not a bad place to be.

Flash forward three years to 2010. Arizona is ranked 13th in bankruptcy filings for the US. This is a huge leap, and it reflects some of the serious unemployment, mortgage and general financial issues suffered by the people of Arizona. Jumping from 40th to 13th is a tangible indicator of just how bad things have been, financially, for the citizens of Arizona.

Though things seem to be improving for the nation’s economy, the effects of this upswing could take some time to reach Arizona, or any individual state for that matter. In the first quarter of 2010, there was no marked reduction in the number of bankruptcies filed in Arizona. In total, over 9,000 bankruptcies were filed during this time. This is still a significant amount of filings, so it appears that recovery may be very slow indeed.

Of the Arizona bankruptcy filings for that first quarter of 2010, 18% of them were for Chapter 13 bankruptcies, and a whopping 82% were for Chapter 7 bankruptcies.

The most recent trends on Wall Street do show that the economy will begin to improve more in the near future, but, again, these improvements are not going to be felt by everyone right away. Financial professionals in Arizona remain hopeful, though, that the bankruptcy filings in the state will begin to decline during the next calendar year.

Elle Wood recommends Dault Law if you are contemplating filing bankruptcy. Brian Dault offers Bankruptcy counseling and is one of the leading Phoenix bankruptcy lawyers in Arizona. The Dault Law Team focuses on providing quality legal services for consumers and small businesses at affordable prices

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Declaring Bankruptcy: Chapter 7 Vs Chapter 13

February 2, 2012 By Leave a Comment

By Ariel Pryor -

The collection agencies are hounding you relentlessly. The calls keep coming in at all hours, your making the best effort to meet the obligations of your various creditors, and you are scrambling to make ends meet. Despite your best efforts, your finances are simply upside down and you are considering declaring bankruptcy. You are aware that it can provide relief and allow you to restructure your debt and settle obligations with the bankers, but is it right for you?

When you are facing the decision to file for bankruptcy it can seem like financial weight of the world is lined up against you, and in some cases upside down obligations and high interest rate debt is. Going bankrupt, often first encountered in our youth after a hard fought session of Monopoly, is not the result anyone seeks after pouring so much blood sweat and tears into their fiscal endeavors, but going bankrupt can provide a second chance opportunity to press the reset button on your money matters.

What You Need To Know About Bankruptcy Before You File

Filing for bankruptcy has consequences. The acknowledgement that you can no longer pay your bills has an obvious impact on your credit reputation for years to come and can pre-disqualify you for future borrowing opportunities. I understand fully that in this present moment, crushed by debt, future borrowing is the last thing on your mind but bears taking a moments consideration. Going bankrupt is the single most damaging thing you can do to your credit history and will remain on your consumer credit reports for 7 to 10 years.

There are a variety of alternatives that should be explored before you decide to file to eliminate your debts. For example, there are often opportunities to restructure your debt through consolidation loans, negotiation with your creditors, or to get your finances back on their feet through downsizing and or asset restructuring. The credit impact is that serious, that you will want to be sure that you have explored every possible alternative to declaring bankruptcy.

Chapter 7 Bankruptcy

The Chapter 7 is the most common method of going bankrupt, as it can provide the fastest results and is open to be filed by individuals, corporations, married partners, and partnerships. A Chapter 7 is sometimes referred to as a straight bankruptcy and filing begins a court appointed asset managed liquidation proceeding.

After filing you, as the debtor, turn over all property to the court appointed trustee to liquidate into cash in order to pay off your lenders with the proceedings. Following the liquidation of your assets, you will receive a discharge of your debts, typically within a four month period. Following your debtors discharge you have been given a fiscal fresh start to proceed without the onerous fiscal obligations that were crushing you prior to filing. It is important to note that federal, or tax debts are not possible to discharge through bankruptcy.

The Chapter 7 bankruptcy code also provides for a number of asset exemptions that are deemed ‘exempt’ under Federal and State exemption laws, meaning that you get to keep these assets. Don’t be confused, if you owe any money for these assets, like your primary car, your primary home, or other assets that your particular state deems exempt, you will still be obliged to make the payments if you choose to accept the exemption.

The assets that are exempted vary from state to state, so check your local laws to confirm what will potentially be protected from your Chapter 7 Bankruptcy.

Chapter 13 Bankruptcy

A different declaring option that is available is the Chapter 13, known as the reorganization bankruptcy. In this case the filer has wishes to pay off their indebted obligations over a period of three to five years. This is an ideal solution for people declaring bankruptcy who wish to protect non-exempt properties while providing opportunity to restructure the terms of obligations that cannot be met as contracted. A Chapter 13 is typically an option chosen by people with a predictable revenue that will allow them the financing flexibility in the coming years to pay off their debts.

Do I Qualify To Go Bankrupt?

There are a few qualifications that must be met in order to file to go bankrupt. Firstly, if you have declared Chapter 7 bankruptcy previously, within the last 8 years, you are prevented from refiling until that period is exceeded. In the case that you had filed for Chapter 7 within the last 8 years but are in dire need of debt relief again, you can file for the more stringent Chapter 13.

The following debts are not available to be discharged and so, if they are the primary reason for your considering filing, dissuade you:

  • debt for trust fund taxes
  • Criminal restitution
  • taxes for returns that were never filed or filed late (within 2 years of the petition date)
  • domestic support payments
  • taxes for which the debtor made a fraudulent return or evaded taxes;
  • Student loans
  • Drunk driving injuries
  • Civil restitutions or damages awarded for willful or malicious personal actions causing personal injury or death

Rebuilding Your Credit After Bankruptcy

Following a successful discharge of your debts through a bankruptcy filing, you can rebuild. In fact, the federal code that allows you to go bankrupt is intended to provide you a second chance, financially speaking, after being entangled in unmanageable debts. Filing for bankruptcy, and the subsequent successful discharge of your fiscal obligations gives you an opportunity to gain lasting debt relief within a 3 to 5 month period and say goodbye to the harassment of credit collection agencies for good.

With time your credit score will improve, bankers will begin to work with you again, and borrowing is not ruled out forever. Get your financial house in order, and re-enter the marketplace with all the additional experience and fiscal wisdom having suffered through a bankruptcy can provide.

If you’re serious about eliminating your debt and ending the spiral of endless bill payments and struggling to make ends meet. If you are sick of the same routine of bill arrives, panic, scramble to find money, only for the next bill to hit you square in the gut… then you found the right person. I’ll make eliminating debt and making money easy and enjoyable for you… AND NOT BORING!

First, click declaring bankruptcy to get the powerful help you need to deal with your debts now. This will get you the immediate relief you need now.

Second, look around my website as there are a number of other resources to help, including personal loans, debt consolidation, and credit repair offers as well as do-it-yourself action plans if you prefer just to know how.

Third, with my advice you can stop the bill collectors, eliminate your money troubles, and get yourself back to feeling the pride and assurance in knowing you can pay your bills without difficulty. You’ve heard it all before… I get it. But we’ve helped 10′s of thousands already, and know all the ‘tricks’ in the book to help you get the relief you need.

Fourth, there is no fourth. Simply enjoy the resources we compiled for your benefit, take action, and live the life that you deserve! If you don’t find a solution to your right now emergency… I’d be amazingly surprised!

http://www.reallybadcreditoffers.com

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I’m Filing Chapter 7 Bankruptcy, Does the My Spouse Have To File Also?

February 1, 2012 By Leave a Comment

By Lisa Michelle Jones -

Many people filing for bankruptcy wonder if their spouse has to file also. In today’s society, many people enter a marriage or even second marriage with debts from their past. In some cases, one will be virtually debt-free and the other spouse will be buried under past debts with no way out. The liability of debt only belongs to the person that incurred it. So if an individual had $50,000 in credit card debt prior to getting married, the spouse is not obligated to pay any of it. In fact, the other spouse might have stellar credit and being included in the bankruptcy filing will give them a big scarlet B. on their credit report and drag them down because of their spouse. When filing Chapter 7 bankruptcy only the debtor that incurred the debt needs to be on the bankruptcy petition. The only way a couple would want to file jointly is that they have debt they accumulated during their marriage and it can’t be paid because of financial troubles.

When a person is filing for bankruptcy to stop a foreclosure, it sometimes can get complicated and that’s why it’s best to use a bankruptcy attorney to deal with these issues. The only person that technically needs to file for bankruptcy is the one that owns the house. Once the bankruptcy is filed, the automatic stay goes into effect and the foreclosure sale of the home will stop. When one spouse files and they jointly own the property, only 50% of the property has to be protected by bankruptcy exemption laws. In fact, when the individual is filling out the bankruptcy petition and listing their property, when they value it, they will value the property at half because their spouse technically owns the other half.

There are different cases that will benefit a couple filing bankruptcy jointly and it usually involves the protection of assets. The bankruptcy attorney will usually figure it out both ways and give the couple the pros and cons of filing Chapter 7 bankruptcy single and jointly. Basically, it depends on how intertwined the couple’s finances are. The more intertwined with new credit since the marriage, the more chance for bankruptcy attorney will think a joint bankruptcy filing would be best.

Back in 2005, Congress changed the bankruptcy code and made it tougher to file Chapter 7 bankruptcy. Included in the changes was the addition of the means test which requires individuals filing Chapter 7 to qualify. The individual filing bankruptcy needs to make less than the median income for their state to qualify to file Chapter 7. The median income is based on the household income of the individual and needs to include the spouse’s income if both are working. Nowadays, many people come into marriage with a lot of baggage and debts. The individual will decide to file for bankruptcy and wipe out all their past to get a fresh start with their new spouse. This is where the trouble begins, if the new spouse makes a generous amount of money to contribute to the household, the individual might no longer qualify to file Chapter 7. Many times, in this situation if the debtor had only gone and got advice from a bankruptcy attorney prior to getting married they would’ve found out that they should have filed for bankruptcy prior to getting married.

The author is a professional that formed FilingBankruptcyNow.Com which provides information for debtors considering filing bankruptcy under Chapter 7 and Chapter 13 bankruptcy and helps individuals stop foreclosure and eliminate their debt by putting them in touch with a local bankruptcy attorney.

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Bankruptcy Lawyers Can Help Decide If Bankruptcy is the Right Decision

January 31, 2012 By Leave a Comment

By Benjamin L. Dodge

An Arizona Bankruptcy Lawyer can help most Arizonans that have been suffering with the burden of debt. Many people in Arizona are struggling with their monthly bills and feel they are drowning in debt, for Arizona has certainly been affected by the current suffering economy. Not since 1974 has the US suffered such a huge loss of jobs and since late 2007, 3.6 million Americans have become unemployed.

A lot of people in Arizona, from all aspects of life, are equally finding themselves in trouble financially. Many have never before in their lives gone through such a hardship and some even feel embarrassed by their situation. They don’t stop to think that they are just one of many going through this unfortunate situation and that others truly understand and know how they feel. An Arizona Bankruptcy Lawyer can put an end to all of these financial problems and help these people to get back on their feet.

A good Bankruptcy Lawyer can help someone to determine if filing for bankruptcy is the best decision or if maybe another route to freeing their self of the burden of debt would be a better choice. People residing in Arizona that are looking for debt relief should contact a reputable Bankruptcy Lawyer from their state, for taking it all on alone can be overwhelming.

Many Arizona citizens have chosen to file bankruptcy to eliminate un-affordable debt and/or to stop foreclosure on their home. Along with stress, worry and the constant harassing phone calls from creditors, financial freedom is just a step away with the help of an Arizona Bankruptcy Lawyer.

Benjamin Dodge is an attorney for Dodge & Vega, PLC. He invites you to visit his website http://www.dodgevegalaw.com for more in-depth information about bankruptcy in Arizona. While you’re there be sure to fill out the bankruptcy case evaluation.

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Arizona Foreclosure – How Bankruptcy Can Help You

January 30, 2012 By Leave a Comment

By Kirk Guinn -

If you’re like thousands of other Arizonans, you’re in danger of losing your home to a bank foreclosure. Fortunately, many are discovering the solution in what may seem the unlikeliest of places – bankruptcy. Losing everything you own is just one of many Arizona bankruptcy myths encountered by Arizona Bankruptcy Now legal counsel over the past 15 years. In fact, with the help of an experienced Arizona bankruptcy lawyer who understands the law, you’ll likely keep your home, as well as your vehicle and other prized possessions too!

In most cases, homeowners facing potential Arizona foreclosure have been hard hit by adjustable rate loans. They started out with low payments they can afford, only to see the cost of their monthly mortgage rise beyond their reach. For many, the problem is multiplied by credit card debt and medical bills. Once they’ve exhausted all their options, hundreds of hardworking Arizonans just like you come to the same conclusion every single month – they need the help of an Arizona bankruptcy attorney.

The bankruptcy process can be complicated and stressful. That’s why it’s imperative you seek the counsel of an experienced bankruptcy attorney who’s done it countless times – not just anywhere, but here in Arizona where you live, as bankruptcy laws vary by state.

First, your attorney will help you decide which form of bankruptcy may be right for you. Chapter 7 eliminates much of your debt, including credit card and medical bills, freeing up extra money for you to make your monthly mortgage and car payments. Chapter 13 requires you to pay back what you owe over a specified period of time. It may also eliminate more types of debt than Chapter 7. Only an experienced bankruptcy attorney will know which option is best for your unique situation.

When it comes time to file your bankruptcy petition with the court, your lawyer is equally essential as paperwork errors mean revision and resubmission. It is critical to provide the court with a schedule of your assets and liabilities within 15 days of filing the petition. Miss this deadline, and the court dismisses the case.

If you are already in the middle of a bank foreclosure on your home, be sure to file your petition with the court before the foreclosure sale date on your property. That means consulting with an attorney as soon possible to allow enough time for preparation.

When it comes to keeping the home you’ve worked so hard for, your toughest decision could also be your smartest. Within months of your bankruptcy’s completion, you can start rebuilding your credit again. You can get the fresh start that bankruptcy law is intended to provide. To find out which form of bankruptcy may be right for you, contact an experienced bankruptcy lawyer for a free consultation.

Attorney Kirk Guinn advises and assists individuals and families statewide in Arizona with legal questions and concerns relating only to bankruptcy and real estate. He answers all questions and knowledgeably explains the tough questions that exist about bankruptcy and the new laws associated with it.

Article Source: http://EzineArticles.com/?expert=Kirk_Guinn

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Why Avoid Filing Bankruptcy?

January 16, 2012 By Leave a Comment

By Bob P Jones -

When looking at things you should avoid, people typically try and avoid things that will hurt you like, poison ivy, the flu, a cold, hepatitis and AIDS. But why would Americans be so dead set against filing for bankruptcy and do everything they can to avoid the process, even to the point of causing further financial damage. When you think about it, the idea really makes no sense. People in financial trouble do the right thing and go see a bankruptcy attorney to discuss filing bankruptcy. The bankruptcy attorney tells them that filing Chapter 7 bankruptcy will eliminate all their credit card debts and send them on their way to a bright and happy future. The individual leaves the appointment and pride sets in. The questions start popping up in their head, “How will I be able to live without a credit card?”, “What will my friends say?”, “If I file for bankruptcy I will ruin my credit and I never will be able to buy anything on credit again”. These are all worries with no factual basis attached. After talking themselves out of filing Chapter 7 they will continue on robbing Peter to pay Paul, while barely making minimum payments on all their debts.

Usually this type of debtor will start searching the web for alternatives to filing bankruptcy. They will end up calling debt settlement companies and possibly even discussing a debt settlement with their creditors on their own. After unsuccessfully trying to settle their debts with creditors individuals usually go back to making minimum payments and hanging on until one small disaster strikes and their whole world goes upside down. If only they had listened to the bankruptcy attorney in the first place, all of this would have been a thing of the past and a small disaster would’ve been no big deal.

That brings me back to my point, why would a bankruptcy attorney tell a person that may need to file bankruptcy if they could settle their debts by negotiating something with their creditors? The answer is simple, they wouldn’t. If someone walks into a bankruptcy attorney’s office and says they have $5000 in debt and would like to file bankruptcy, the bankruptcy attorney would advise the client to try and offer a debt settlement to their creditors. In this case, the cost of filing bankruptcy would be as much as an individual could settle with their creditors for $.50 on the dollar. A bankruptcy attorney won’t stake their reputation and law degree on filing a frivolous bankruptcy. If they say someone needs to file for bankruptcy, they probably need to file. After the changes to the bankruptcy code in 2005, filing Chapter 7 bankruptcy has taken on a new complexity. Now a person filing needs to qualify for Chapter 7 bankruptcy by taking a means test. Basically, the means test wants to make sure that they individual filing bankruptcy has no more than $150 disposable income left over at the end of the month after paying their living expenses. This does not include the bills that the Chapter 7 bankruptcy would discharge. After reviewing a debtor’s situation, a bankruptcy lawyer will have a good idea if a person qualifies to file Chapter 7 or in certain situations file Chapter 13. At this point, if they individual questions the opinion of the bankruptcy lawyer, for fun they should just go consult another one and see what they have to say. If both have the same opinion it’s probably a good idea to heed to the warning and proceed filing bankruptcy.

The author started DebtFreeBankruptcyAttorney.Com which is a website that helps individuals with debt problems by putting them in touch with a local bankruptcy attorney that specializes in filing bankruptcy under Chapter 7 and Chapter 13 bankruptcy. Check our website for more answers to bankruptcy questions and ideas on how to have a debt free future.

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Arizona Foreclosure – How Bankruptcy Can Help You

January 12, 2012 By Leave a Comment

By Kirk Guinn

If you’re like thousands of other Arizonans, you’re in danger of losing your home to a bank foreclosure. Fortunately, many are discovering the solution in what may seem the unlikeliest of places – bankruptcy. Losing everything you own is just one of many Arizona bankruptcy myths encountered by Arizona Bankruptcy Now legal counsel over the past 15 years. In fact, with the help of an experienced Arizona bankruptcy lawyer who understands the law, you’ll likely keep your home, as well as your vehicle and other prized possessions too!

In most cases, homeowners facing potential Arizona foreclosure have been hard hit by adjustable rate loans. They started out with low payments they can afford, only to see the cost of their monthly mortgage rise beyond their reach. For many, the problem is multiplied by credit card debt and medical bills. Once they’ve exhausted all their options, hundreds of hardworking Arizonans just like you come to the same conclusion every single month – they need the help of an Arizona bankruptcy attorney.

The bankruptcy process can be complicated and stressful. That’s why it’s imperative you seek the counsel of an experienced bankruptcy attorney who’s done it countless times – not just anywhere, but here in Arizona where you live, as bankruptcy laws vary by state.

First, your attorney will help you decide which form of bankruptcy may be right for you. Chapter 7 eliminates much of your debt, including credit card and medical bills, freeing up extra money for you to make your monthly mortgage and car payments. Chapter 13 requires you to pay back what you owe over a specified period of time. It may also eliminate more types of debt than Chapter 7. Only an experienced bankruptcy attorney will know which option is best for your unique situation.

When it comes time to file your bankruptcy petition with the court, your lawyer is equally essential as paperwork errors mean revision and resubmission. It is critical to provide the court with a schedule of your assets and liabilities within 15 days of filing the petition. Miss this deadline, and the court dismisses the case.

If you are already in the middle of a bank foreclosure on your home, be sure to file your petition with the court before the foreclosure sale date on your property. That means consulting with an attorney as soon possible to allow enough time for preparation.

When it comes to keeping the home you’ve worked so hard for, your toughest decision could also be your smartest. Within months of your bankruptcy’s completion, you can start rebuilding your credit again. You can get the fresh start that bankruptcy law is intended to provide. To find out which form of bankruptcy may be right for you, contact an experienced bankruptcy lawyer for a free consultation.

Attorney Kirk Guinn advises and assists individuals and families statewide in Arizona with legal questions and concerns relating only to bankruptcy and real estate. He answers all questions and knowledgeably explains the tough questions that exist about bankruptcy and the new laws associated with it.

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Does The Bankruptcy Attorney Have To Include All My Debts?

January 11, 2012 By Leave a Comment

By Lisa Michelle Jones -

Most people that are filing bankruptcy usually have a large number of credit cards in addition to their other debts. In many cases, the interest from credit card debt is what pushed them over the edge into the bankruptcy filing. People that are addicted to using their credit cards usually have one favorite credit card that they try to keep a lower balance so they don’t lose the ability to charge on that account. All the other ones are maxed out and they’ve come to a point where they could no longer afford to live while making the minimum payments on these credit card balances. Many times, an individual will try and set aside and not list in the bankruptcy filing that special credit card that they never used or still has available credit on it. Although, in theory it all sounds good, but when the bankruptcy attorney tells their client to list all their debts, they mean all. The last thing a bankruptcy attorney wants is to be blindsided at the meeting of creditors by the bankruptcy trustee asking why this account was not disclosed. It’s embarrassing for the bankruptcy attorney and could have ramifications on how the bankruptcy filing proceeds from there.

Many people in the process of filing bankruptcy don’t realize that most creditors continuously search the bankruptcy filings than cross reference the names with their own database. When a name pops up the check for social security number and if it matches the account will be closed anyways. So someone that thinks they can be sneaky and hang on to one credit card while discharging all their other debt is foolish. Technology has made this virtually impossible for the debtor to get away with. Once you get caught failing to disclose debts on your bankruptcy petition, the bankruptcy trustee will take a much closer look at all the schedules including an individual’s assets and the bankruptcy exemptions that protect them. The bankruptcy attorney will be on the defense digging themselves out of a hole with a bankruptcy trustee.

The court wants individuals that are filing bankruptcy to be totally honest if they plan on receiving this discharge of debt. Once that trust is broken, the court will question everything else in the bankruptcy petition. It also breaks the trust of the bankruptcy attorney with their client. First of all, if the bankruptcy attorney learns about the hidden credit card at the 341 meeting, they won’t know what else their client is hiding from them. When that trust is broken, the bankruptcy attorney might even drop them as a client.

This is important for an individual filing for bankruptcy if they want to be successful. Include all the information and let the bankruptcy attorney decide whether or not it’s important or if there is a legal way around the situation. Many times there is a solution that the client would not even know about and would avoid the embarrassment of getting caught in a lie.

The author is a professional that formed FilingBankruptcyNow.Com which provides information for debtors considering a bankruptcy filing under Chapter 7 and Chapter 13 bankruptcy and helps individuals stop foreclosure and eliminate their debt by putting them in touch with a local bankruptcy attorney.

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The Pros And Cons of Bankruptcy And Debt Consolidation

January 10, 2012 By Leave a Comment

By Samuel J Warden -

There are a lot of options out there for getting some relief from your debt. Listen to the radio long enough or watch some television and there inevitably will be a debt consolidation company offering to settle your debts for less and consolidate them together into an easy payment. You also will hear from the bankruptcy attorneys, who offer to help you maximize how much debt you can discharge and how much property you can keep in a bankruptcy filing. So what to do, both offer to take care of your debt, and who really wants to file for bankruptcy? Here is a short examination of the pros and cons of each, Bankruptcy and Debt Consolidation.

First debt consolidation. Lets start with the pros.

1) No bankruptcy. You are not filing bankruptcy. Lets face it, bankruptcy has its cons which will be examined below, and there is a strong social stigma associated with it. People are embarrassed to file bankruptcy. Beyond the social reasons not to file are the financial. There is a benefit to your short term future credit if you avoid bankruptcy. So for many individuals just avoiding a bankruptcy is reason enough to go with debt consolidation. If it works.

2) Keeping property. This is important depending on what you own and how nice it is. Many people filing chapter 7 bankruptcies are what is considered no asset cases. Meaning that with bankruptcy exemptions and other timing options of filing the bankruptcy petition they keep ALL their property and do not lose a thing in a bankruptcy filing. Lets face it though many of these people do not have much which is why they get to keep it all, but you might be surprised as to how much you can keep in a bankruptcy. If you have a lot of nice things though, filing bankruptcy might mean getting rid of them, and that, for some, is unthinkable.

3) Your credit score. That all important credit score now affects everything from how much you pay for car insurance to whether or not you get offered that great job you went out for. Avoiding bankruptcy, especially in the short term will do wonders here. However, many people considering a debt consolidation already have terrible credit, a bankruptcy might not be able to worsen it.

4) Could be wonderful. When it works, it can work great. You get a great deal from the creditors, you pay off the debt for less than it is worth, you are free and clear and have avoided bankruptcy, and the future credit problems that bankruptcy can bring.

And now the cons to debt consolidation.

1) Taxes!! I put this first because many people do not realize this, but any amount of debt you are forgiven in the debt consolidation process is considered taxable income. That is right, prepare for the possibility of a big tax bill at the end of the year.

2) The price. Debt consolidation can be costly, many times much more than a bankruptcy attorney would charge to represent you in a bankruptcy. This does not mean that it is not worth it sometimes, but that will depend on all the factors of an individual case. How much exactly is being saved versus the costs of going through the process.

3) The time. The debt consolidation process can take awhile. Just think it through, you or your debt consolidation team must get all your creditors to the table, or at least most of them to make it worth it. Then they are all going to have to agree to some sort of deal where they may take less money in exchange for fast and guaranteed payment. This can be difficult or maybe impossible depending on how many creditors there are and how disposed they might be to making or not making any sort of deal. The timing here is important, especially for people who may be facing imminent foreclosures, repossessions, or garnishments. While negotiations drag on, property you depend on to make those future payments may be being taken from you, like your car.

4) Could go badly. The result of a debt consolidation might be to leave you burdened with a lot of debt that still has to be paid back over a significant period of time. Depending on your situation, debt consolidation might be one of the big steps on your way to a bankruptcy. This does happen and is unfortunate because all that money paid to the debt consolidation company is money not well spent. Remember that the creditors in this situation have no obligation to accept the debt consolidation plan. The plan really only is as valuable as the creditors allow it to be.

Now, lets look at some of the pros as far as a bankruptcy is concerned.

1) The fresh start. You get all the debt taken care of, and you are setup with a fresh start and opportunity to remake your financial life. There really is nothing else like it, not even close. Being able to walk away from all that bad luck, or those not so good decisions is powerful stuff. There is no tax burden for the unpaid debts, there is nothing you have to look back on.

2) Very quick relief. Although you may not get your discharge for a few months in a chapter 7 and a few years in a chapter 13, the automatic stay arises immediately and forces your creditors to wait, stop all collection efforts, all lawsuits against you, all garnishments, repossessions, or foreclosures. This is very powerful and again there is nothing else like it. You can even prevent your utilities from getting turned off, or get your utilities turned back on. Immediate, quick relief, can be very important.

3) Relatively cheap. Costs to hire a bankruptcy attorney can vary widely and every case is different and some more expensive than others. That being said many are surprised to hear that while not cheap in and of itself, relative to other options bankruptcy is fairly affordable. You will have to check the prices in your are and with the particular attorney you want to hire. Again prices are going to vary.

4) Very reliable. Bankruptcy just works, it is the law, and it is used often. A competent bankruptcy attorney can minimize the property loss to their client while maximizing the debt discharged, and if bankruptcy cannot help you they will be able to tell you, and not waste your time and money. Compared to a debt consolidation agency, who may or may not be able to make that great deal happen between you and your creditors, bankruptcy is a reliable option.

Now the Cons to bankruptcy.

1) The stigma. There is a social cost to filing bankruptcy, no getting around it. People may think lower of you because of filing. These are people who do not understand, and may never, because they will never struggle at all financially. Unfortunately, or fortunately, these people are everywhere and you may have to put up with their attitudes about your bankruptcy.

2) The property loss. You may have to lose property. For some that property might be significant either in dollar value or sentiment. Many bankruptcy filers do not have to part with any property, and there is always a chapter 13 for those who qualify, but not everyone qualifies for a reorganization under a chapter 13. Remember though, the property that is exempt from being taken in a bankruptcy is significant, check your applicable exemptions to find out more.

3) The credit score. Your credit will get worse if it is possible for it to get worse. In a chapter 7 the bankruptcy will be on your record for 10 years, for a chapter 13, it will be 7 years. You will probably be able to get credit, but you will not get great terms and it may take some persistence on your part. This is definitely one of the bigger prices you pay for getting rid of all that debt.

4) Availability. Bankruptcy is complex and is a specialized area of legal practice. Some individuals try and do it on their own. This is not recommended. There are many pitfalls that can ruin your chances for a discharge, and could even hurt you further. Even with an attorney, filing bankruptcy takes a bit of work. You have to go through your entire financial life and past. There is a lot of financial documentation that has to be collected and filed correctly, and while an attorney can help with that, there is still a burden on the person filing to dig that info up. Then there are the people who just, for one reason or another, cannot file bankruptcy. Filing a bankruptcy petition is not available to everyone, whether it is a recent past bankruptcy, or some other reason that makes filing impossible, there are many who would benefit but cannot be helped by bankruptcy.

So there you have it, not a comprehensive analysis by any means, but there is a list of some of the more pressing issues regarding the differences between Bankruptcy and Debt Consolidation and some pros and cons of each.

DISCLAIMERS: Ohio law governing attorneys and attorney advertisements require me to advise that this article is an “ADVERTISEMENT ONLY” and is not legal advice, is intended for general informational purposes only, is directed to the general public, and is not directed at any particular person, group of persons, or entity.

By an act of Congress I have been designated a debt relief agency, and I help people file for bankruptcy under the bankruptcy code.

Samuel Warden is a Bankruptcy Attorney, practicing in Dayton Ohio. You can visit his Miamisburg Bankruptcy Lawyer website, or read his Mason Bankruptcy Lawyer Blog for more information on Ohio bankruptcy.

Article Source: http://EzineArticles.com/?expert=Samuel_J_Warden
http://EzineArticles.com/?The-Pros-And-Cons-of-Bankruptcy-And-Debt-Consolidation&id=6791122

 

 

Filed Under: Bankruptcy Attorney

Today, Filing Bankruptcy Might Be A Great Investment

January 9, 2012 By Leave a Comment

By Lisa Michelle Jones -

Spending money to file for bankruptcy almost sounds counterproductive, but it could be the best investment your family ever made. In today’s economy, banks are only paying barely 1% for money in one’s savings account. The volatility of the stock market makes it a terrible investment for anyone that needs a long-term return. Today, most Americans are buried under a mountain of credit card debt and are continuing on making the minimum payments just to keep those accounts open. Most people think that taking money out of a savings account to pay off credit card debt is off the table even though they are probably paying 26% interest on a credit card and receiving 1% interest on the savings account. Most people understand the whole concept of protecting what assets you have for a rainy day. That’s why, if there is no way out of debt, filing bankruptcy should be considered.

Back in 2010, the Wall Street Journal reported that the average American household had approximately $40,000 in personal debt. This is a substantial amount of debt that is next to impossible to pay off considering the interest rates being charged. An easy test for a person to take is to add up all their credit card bills and budget a monthly amount that is affordable to pay on the debt. If the debt cannot be paid off in six years if there are no more charges to the account, a bankruptcy filing should be considered. Filing bankruptcy can be a way to regain control of an individual’s life and pocketbook. Doing nothing, might seem tolerable and safe, will keep the individual in bondage to those debts for life. Most people have to weigh the positives against the negatives before deciding to file for bankruptcy. The easiest way to do this is to drop in on a bankruptcy attorney and have them take a look at the individual’s financial situation. The other way is to just do some research on the Internet.

If someone is on the fence and having trouble deciding on filing bankruptcy here are a few things that might sway their decision.

    1. Right now is a good time to file for bankruptcy because the economy is down and the value of the individual’s property is much lower making it easier for the bankruptcy attorney to protect more property with the bankruptcy exemption laws.

 

    1. Eliminating the stress is probably the best reason but usually not considered in the beginning. Stopping the creditors from constantly calling and threatening an individual can ruin a person’s health and marriage. Protecting one’s health should be at the top of the list.

 

    1. Not filing bankruptcy because you’re worried about your credit report is foolish. Usually when a person gets to the place where bankruptcy filing is on the table, the person’s debt ratios and late pays have probably already destroyed their FICO score. After the bankruptcy discharge, the individual can quickly start rebuilding their credit putting the bankruptcy far behind in the rearview mirror.

 

    1. Depending on the age of the individual filing for bankruptcy, a person should not wait until they are ready to retire. Facing bankruptcy head-on will allow the person to recover before retirement.

 

    1. With the large number of families facing foreclosure, filing bankruptcy will eliminate any liability on a piece of property that the individual might want to surrender back to the creditor. It also can help an individual avoid foreclosure by eliminating all the unsecured debts that in many cases will free up enough money to make the mortgage affordable.

 

  1. Filing bankruptcy will stop foreclosure. Filing Chapter 7 bankruptcy will stop foreclosure at least temporarily. Depending on the situation, the creditor has the right to file a relief of stay allowing them to restart the foreclosure process. Filing Chapter 13 bankruptcy is a better option when the individual is filing for bankruptcy for the reason of protecting a piece of property. All individual’s situations are different and should be discussed with a bankruptcy attorney as the results very.

For those in debt, inaction or pecking away at it slowly will solve the problem. People in this situation should consider discussing the matter with a bankruptcy attorney to see if filing bankruptcy will work for their situation. Many people find out that the facts they thought they knew about bankruptcy are more based on myths than understanding.

The author is a professional that formed FilingBankruptcyNow.Com which provides information for debtors considering filing bankruptcy under Chapter 7 and Chapter 13 bankruptcy and helps individuals stop foreclosure and eliminate their debt by putting them in touch with a local bankruptcy attorney.

Article Source: http://EzineArticles.com/?expert=Lisa_Michelle_Jones
http://EzineArticles.com/?Today,-Filing-Bankruptcy-Might-Be-A-Great-Investment&id=6737297

 

 

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