Different Available Options During A Bankruptcy

When one has gone bankrupt, there is a bankruptcy process which is a legal process that can be undertaken. The process is mostly initiated by the debtor whose assets get evaluated. Debtor assets are used to repay part of the debts and after the proceedings are done, the debtor is relieved of any debts that were outstanding before filing for a bankruptcy.

Before filing, you should ensure that it is the only option left. It will affect your credit rating for many years to come. It will make it difficult for you to manage bank accounts and credit cards, can lead to the loss of the interest on your home or even make it difficult to contract a job. It is considered by most as a last resort after all other options like credit counseling, budgeting and any other options have failed.

In the U. S there are two bankruptcy options for individuals. They fall under chapter 7 and chapter 13 of the law of bankruptcy. According to chapter 7, if there are unsecured debts, they will be cancelled right away. Mostly it is called liquidation. The trustee to the debtor can sell assets belonging to the debtor to pay all the creditor claims. Alternatively one can admit to paring back the debts according to chapter 13. This has to be however approved by the court that will oversee the whole process.

The first step is contacting a credit counselor or a lawyer. The lawyer will ask you all relevant questions and help you complete a means test that ensures that there is a certain amount that your income does not exceed. He/she will help you decide the best steps to take and then file the appropriate papers to the court.

Once you retain a lawyer, the lawyer will then handle all your creditors. After your case is filed, no creditor should contact concerning your debts. You will now be protected by something known as an automatic stay and there may be a penalty to your creditors it they go against it.

A trustee is usually assigned once the process has started. His/her work is to make a follow up on the information submitted by the debtor. Then all asset involved in the case are collected and sold. Sales proceeds collected and used to cover the debts owed. This has to be done under the overview of the court.

A discharge can be made by the judge after it is confirmed that information given is true to the core. Creditors will have to be called meeting to confirm that what the debtor is saying it correct. One has to also meet the terms of the court to be able be issued with a discharge.

Types of Non-Bankruptcy Resolutions

If you’re considering filing bankruptcy, then you’re already in a tough spot. You’re facing mounting debts and pressure, time is low, and so is money. You need a solution, and bankruptcy offers that. However, there are also various non-bankruptcy solutions or bankruptcy alternatives which are available to you. It’s important to learn more about these and how they work, so that you have a good sense of what all of your different options are.

One resolution is a compromise or negotiation with a lender. In this case, you or a representative will try to work out a direct solution on a lender by lender basis. Is there a way to reduce the monthly payment threshold, or carve out some of the total obligation owed? What about the interest rate that you’re facing? This often applies directly to credit card companies and similar lenders.

This also though specifically applies to loans from financial institutions, regardless of the purpose you originally obtained the loan itself. In some cases, loans can be modified via negotiation or settlement. In others, a compromise based upon the original loan can be reached.

Consolidation of your debt is also an option, but it can be confusing to find a legitimate enterprise, as opposed to a consolidation scam. Having an advisor on your side is therefore key, so you can separate fact from fiction while actually producing the positive results which this course of action offers.

Keep in mind that the type of debt or obligation you’re facing will of course impact the range of potential non-bankruptcy resolutions you have at your disposal. Certain debts you cannot get rid of, even via bankruptcy, while others will be more difficult or perhaps impossible to change or negotiate.

Other debts are far easier to work with, in terms of both removing the obligation entirely via bankruptcy, as well as reaching non-bankruptcy resolutions. Keep in mind, that if a lender or creditor is faced with the prospect of getting nothing from you in return, i.e., bankruptcy, they will be willing to negotiate and compromise so they at least see something.

In all of these cases, that’s why it’s so essential to work with an experienced bankruptcy attorney who can guide you through the process, and has the skills and expertise to successfully maneuver these different debts, financial obligations, and the potential solutions which are available. This can make all of the difference between great financial relief without filing bankruptcy, versus filing bankruptcy. Before you take that plunge, speak with an attorney or legal representative in your local area who can provide you with some guidance.

Understanding Bankruptcy and Student Loan Debt

Soaring college costs have led millions of students across the United States to take out large loans to finance their educations. According to the College Board, the price of attending a public four-year college has risen 27% beyond inflation over the past five years. To further break it down, costs have gone up 24% at community colleges and 13% at private universities.

According to USA Today, student borrowing topped $100 billion four years ago for the first time, and, the following year, outstanding student loans exceeded $1 trillion for the first time and have remained at that astronomical level. Between 2004 and 2012, aggregate student loan balances almost tripled due to an increasing number of borrowers and higher balances per borrower. Sadly, almost 17% of borrowers are delinquent on student loan payments, according to the Federal Reserve Bank of New York.

While many college students successfully procure good-paying jobs after graduation and start paying off those student loans, others are unable to do so. While the economy has recovered some since the recession of 2008 and 2009, unemployment or underemployment is still a big problem. Weak job markets and stagnant incomes weight heavily on graduates. Often, student load debt is piled onto mortgage, credit card, medical or other debt. In some cases, the only way out from underneath that mountain of debt is to declare bankruptcy.

Individuals can file for bankruptcy under two chapters of the Bankruptcy Code. Chapter 7 is known as liquidation and involves the sale of all assets to help repay money owed to creditors. Chapter 13 is known as reorganization and involves creating a plan to repay creditors.

While declaring bankruptcy can help wipe the slate clean for many debtors, student load debt is different. The Bankruptcy Code lumps student loan debt with other types of debt that can’t be discharged such as child support and criminal fines.

Up until 1976, all education loans could be discharged through bankruptcy. That year the Bankruptcy Code was changed, which disallowed college loans to be discharged during the first five years of repayment. After five years of repayment, the loans could be discharged through bankruptcy or if “undue hardship” was being experienced by the borrower.

In 2005, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act, which gave further protections to federal and private student loans from bankruptcy protection. However, if the borrower could demonstrate to the court that repayment of the student loan would cause an “undue hardship,” the court could rule the need for bankruptcy protection justified and allowable.

The court uses a three-part test to determine hardship:

• It would be a hardship if you are forced to repay the loan but unable to maintain a minimal standard of living for yourself and your dependents.

• There is evidence that this hardship will continue for a significant portion of the loan repayment period.

• You made good-faith efforts to repay the load before filing for bankruptcy. This usually means you have been repaying it for a minimum of five years.

While you are in bankruptcy, you’re protected from collection activities on your student loans. However, during the bankruptcy process, your loans will continue to accrue interest, which will increase your loan balance if no payments are made.

Simple Tips to Save Money On Groceries

A very important aspect of your financial plan should be to save money on groceries, as they tend to be one of the biggest expenditures of any family. All of us were already worried about recession and with inflation also on the rise it becomes very difficult to keep the budget under control. Your debt is already causing sleepless nights and the grocery bills add to the misery. Most families are shocked to see their grocery bills rising. What do you do? Is there a way you can win over inflation? Is there a financial plan to control the ever increasing prices? You are not alone, in this battle and we will help you get a plan in action to create a win-win situation. Here we go!

Don’t shop when you are hungry – Hungry and grocery shopping! Never do your groceries shopping when you are hungry as you tend to buy things that you don’t need. You will indulge in a lot of impulsive shopping.
Plan your meals – You should have a definite plan; you should know what you need and what you don’t. If you walk around the shop aimlessly, thinking about your meals, you will grab whatever you see. Try to do grocery shopping for the entire week.
Hunt for deals – Most grocery shops announce deals once every week and this could be advertised in the local newspaper. You could get very good deals on a specific day and this will help keep the cost down.
Store brands – Most customers are apprehensive of the store brands against reputed brands. Surprise! You will get better quality products of store brands and the prices are also very cheap.
Multiple item sales – Five items for just $30.00! It is one of the best marketing strategies available where a combination of products or multiple items are offered for sale. Most of us fall for this. Be careful and chose the deal wisely.
Coupons – You will be surprised to know that you can save money on groceries by cutting the coupons that are available in newspapers. Somehow not many of us do it nowadays. Maybe we tend to think of it as cheap. But every time you use these coupons you will save some dollars.
Discounts and frequent shoppers – There are a number of grocery chains that offer discounts to customers who are loyal to the chain and you can avail of such discounts and save valuable money.

“Little drops of water make the mighty ocean”. Every cent you save will add to your overall saving and using this money you can also slowly take care of your debt. You can trim the fat of your bill and save money on groceries if you plan it right.

Practical Ways to Save Money

Your budget is very tight and you will have to come up with practical ways to save money so that you do not get into a debt trap. How does one save money when you have to tackle recession, inflation, rising prices, unemployment and debts? Is there a solution? Can you get out of the mess? Can you really save in such tough conditions? Well, the answer is a resounding YES. All you need is a plan of action and you are on the path of success. You will be surprised to see simple changes to your lifestyle make a big difference to your finances. Well, here is the plan;

Eat at home instead of eating out. If you buy lunch every day, start taking it from home.
Make your own coffee instead of buying Starbucks daily.
Buy the groceries in bulk as this will help you save money. Do not indulge in impulsive shopping. Carry a list while shopping for groceries. Shop once a week and never when you are hungry.
Save electricity by switching off lights, fans and TV.
Restrict your credit card use.
Rent a movie instead of going to the theater.
Discounts, rebates, coupons. Use them all and save plenty of money.
Use carpool and try walking to the office or the grocery chain if it is within two blocks from where you stay. You will save on money and gain in health.
Consolidate your debt and pay it off as early as possible. You can also transfer the debt to a new credit card. Interest free balance transfers are a good way to get rid of debt effectively.
Get rid of expensive membership fees. If you are paying for the gym that you hardly use, stop. Go for a walk in the park instead. You may also be able to make new friends.
Try and do things yourself. Wash your car, manicure your lawn and paint the house. You not just save money but also get fit as you are getting rid of your sedentary lifestyle.

All these tips are genuine practical ways to save money but only if implemented wholeheartedly. You would need to involve your family, right from framing a plan of action and putting it to use. Make your kids understand the benefits of saving every dollar. Involve your family and friends in the money saving efforts and reap the benefits for the rest of your life.