Category Archives: Bankruptcy

Debt Settlement Or Bankruptcy – A Financial Comparison

The financial implication of debt settlement as compared with bankruptcy is very different despite the fact that both these solutions are considered debt relief options. Once you get a debt settlement deal finalized, your debts will come down by a fixed percentage as determined between you and your lender.

This means that the total amount owed will come down and only the balance amount needs to be repaid. As far as bankruptcy is concerned, the actual amount that shall be waived off is never fixed. It all depends on the total value of your assets and the value that the court official is in a position to recover by liquidating the same.

The only guarantee that you enjoy is that the debt shall be discharged no matter what the value of the assets are. Another significant difference between settlement and bankruptcy is the impact on your finances. Bankruptcy involves starting from scratch.

If you do not have a job, you will find it difficult to get another job with a bankruptcy in your credit report. On the other hand, a settlement is a very simple process and you just need to continue your existing job.

If you go in for a new job, you need not specify that you have discharged your debts with the help of debt settlement. Mentioning that you have opted for bankruptcy in the past is mandatory as far as the law is concerned. No such compulsion exists as far as settlement is concerned.

As far as financial benefits are concerned, there is no doubt that settlement is much better. This is because you will be permitted to retain your financial life style and you just will be required to repay the balance amount payable after the waiver has been finalized. In case of a bankruptcy, you need to start from scratch.

You will lose control of all your assets apart from the exempt assets. Further, if you are ordered by the court to go in for a Chapter 13 bankruptcy, you will have to spend at least twelve to eighteen months trying to finalize the debt repayment program and spend another three to four years repaying all the debts.

As far as expenses are concerned, you can be certain that the cost of a debt settlement will not exceed fifteen to twenty percent of the total amount owed. On the other hand, the cost of bankruptcy will involve court fees as well as the fees of various bankruptcy professionals that you employ.

If you are over $10k in unsecured debt it would be financially prudent for you to consider a debt settlement. There are organizations that exist called “Free Debt Relief Networks” that are a great place to start in locating legitimate debt settlement companies in your region. They provide free debt help and know where to locate the top performing debt settlement firms. To get free debt help check out the link below:

What You Must Consider When Filing For Bankruptcy

Many people think that bankruptcy will be the easiest way to relieve them of their debt problems, and they jump into it without considering everything that comes along with it. Yes, it may well relieve the debt problem, but it is not always easy, and it should certainly be used only as a last resort.

Even though the filing itself is relatively easy, the whole process – just like any other legal proceeding – could be a little painful. The reason is because you will have to convince a judge that your filing was absolutely necessary and you will have to expose all your financial history, leaving it wide open to objections by your creditors. And do not expect your creditors to just settle for 10 cents on the dollar, even though it may happen.

Filing for bankruptcy is a drastic step, and you have to consider very carefully the long term impacts it will have in your life.

You will lose any credit cards that have outstanding balances, and those that you have no balance on may choose to close your accounts. You will also find it near impossible to get a home loan or other types of loan. And if a loan is to be approved, it will be at an incredibly high interest rate.

Keep in mind, for example, that many debts are not covered when you file for bankruptcy protection. For example student loans, back taxes within the past three years and other debts are generally exempt and not covered by bankruptcy protection.

This situation will last for ten years, and during these ten years you will need to maintain an excellent credit record if you want to regain the banks trust. All interest rates will be higher since a bankruptcy is always regarded as the most negative criterion on a credit report. This applies for a new car loan (expect to pay thousands more during the life of the loan), department store cards (if they issue you one) and even a secure credit card.

Not only will you suffer financially, but you may also be required to forfeit real assets like jewelry, boat or Recreational Vehicle, depending on when they were acquired. Some states however make an exception for your car and your primary residence. If you own rentals, they may not be protected.

And you also have to consider that the process can get very expensive, more so if you use an attorney. The procedure is not free: the fees that Courts charge have gone up in the last few years.

On the upside, you will get relief from the stress caused by your debt, and your creditor’s phone calls will stop once they are notified. Your wages will not be garnished and any foreclosure action will be stopped. By taking action sooner rather than later, you will start to build a new credit history that can be better than the past one.

And this can be an advantage since you won’t have access to credit cards. It is of utmost importance that you change your habits and be extremely careful next time.

Even though people file for bankruptcy for different reasons (many of which are unpredictable i.e. loss of job, medical bills, etc) it can be a wakeup call to change any bad money management habits we may have.

Buying A Car With Bankruptcy Without Giving Up Your Dignity

There are special financing car dealerships and auto brokers who can work with you to get you into your next vehicle, despite a recent bankruptcy. Here are a few things to help you know that you are working with a quality special financing dealership when buying a car with bankruptcy.

Bankruptcy and all of the emotions that go with the process of filing can leave you feeling hopeless and defeated. Begin by realizing these are simply thoughts of where you are right now. This is not a permanent situation. A different approach may be to look at this as a fresh new beginning. Your financial slate has been wiped clean. There are quality special financing dealerships that are eager to help you buy a car after bankruptcy.

Here are some tips on how to spot a special finance dealership or auto broker that will gratefully assist you with your fresh new beginning.

Begin by asking friends and relatives if they know of anyone that helps people buy a car with bankruptcy. This may be your best resource. You can also check online for dealers in your area.

After locating a couple resources, pay a visit to the dealership and ask to speak with the special finance department. Notice how the person who greeted you has treated you. Did you feel welcome, even after speaking the term “special financing”?

You should feel as if you have been treated with respect and dignity right from the start. If instead you are feeling as if the dealership personnel are looking down on you, or if you feel that you are being ignored, don’t be afraid to walk away and find another dealership that treats you better.

There are quality special finance departments available and this will make for a much more pleasant experience. In addition, this will help ease your concerns. You can then feel confident that you will get the best deal while buying a car with bankruptcy.

Once you feel comfortable with the dealer, ask the special finance salesperson to see some of the vehicles that would be available with your circumstances. You want to see that the dealership is putting you in a quality used car rather than an old, run down jalopy. Make sure the car has been safety inspected and get the history report for the vehicle. Feeling confident that the car will remain in good condition through the length of the loan is an important step.

Once you have seen the quality of the cars, sit down with the dealership and provide them with the information they need to begin working a deal to help you when buying a car with bankruptcy. They will want to see check stubs to prove that you have a steady income. In addition they will want to see proof of residency and bringing along a couple utility bills will provide this proof. You will need a current driver’s license along with proof of insurance. In addition, they may ask for references.

Now, watch the dealership work their magic. A quality special finance dealership can get you pre-qualified to help make the process go smoothly and more quickly. Once you are pre-qualified, you should be in a new vehicle within about 2 hour’s time!

When buying a car while in bankruptcy, finding a quality special finance dealership will relieve stress and give you the greatest chance at a fresh new beginning.

Advice for Those Recovering From Bankruptcy

A bankruptcy can be a hard pill to swallow when it comes to your future finances. Bankruptcies do their fair share of fighting off creditors for you, but they also make it publicly known that you are in the midst of a bankruptcy. When your bankruptcy is over and it is time to recover, you may find yourself still living under that strict budget, trying to make paychecks last until you receive your next one, and it will also be incredibly difficult to get good interest rates when financing for things you need, such as a car or even a home.

The steps to recovering from this financial nightmare are simple, and with a few deep breaths you should be back on your feet within no time. First, obtain copies of all your credit reports to review what debts are still showing. You can dispute any debts that you find still showing because of the bankruptcy, and this will help to remove some of those “red flags” that lenders look at. Someone fresh out of a bankruptcy may not even want to think about their credit report, much less obtain a physical copy of it and go through the hassle of disputing, but this is very important to do. Remember that even some jobs will check your credit history to see if you would be considered a potential risk of stealing from them. A credit score of zero is most ideal when coming out of bankruptcy versus owing thousands of dollars to unpaid creditors.

If all information on your credit report is true and accurate, or if you have already completed the first initial step, you can begin to rebuild your credit history. Without too much work and with the help of your financial adviser, this can be done within the next few years following your bankruptcy. You would do this in the same way you did when you first started out, get your first credit card. Because your credit is so poor at this point, you may have to go with a prepaid credit card, but one that will still report to your credit each month. Another method used is to attempt getting a loan from your local bank or credit union. Ask someone you trust to be the cosigner of this loan so that you can get approved, then hold on to that loan amount in order to repay the loan each month. As long as you do not spend this money, you should have no problems paying off the loan each month on time.

Remember what the bankruptcy did for you. Some of the methods learned by those who are struggling are the most valuable. If you clipped coupons to save on groceries, if you eliminated wasting gas or other tiny aspects that helped you save money should still be used until you feel comfortable enough to start spending again. However, there was a reason you had to file for bankruptcy and it should be a lesson learned, not a lesson forgotten.

Additionally, bankruptcies are not always a bad thing. They can actually be considered very good things when the right light is thrown upon them. For example, a bankruptcy has now cleared all of your debt and given you a fresh start to grow again. You now have a chance to improve your credit better than it ever was before. You also probably have a better understanding of how your bills work and how much you need to survive each month, more so than those who have not gone through a bankruptcy. Use these experiences to your advantage to help you succeed in the future.