Debt Clear Direct

by marsmet47

Chapter 7 Personal Bankruptcy Overview

No doubt if you are encountering financial hardship and your debt is just rising by the month, you must have comtemplated filing for bankruptcy protection. The most “popular” alternative is to file for Chapter 7 bankruptcy. Chapter 7 bankruptcy is named such bacause it is chapter 7 under the bankruptcy law. Chapter 7 bankruptcy is also known as the liquidation bankruptcy. It is also named liquidation bankruptcy because your assets can be repossessed and sold off to satisfy the debt obligation to the creditors. So what exactly is involved with filing Chapter 7 bankruptcy?

Hire a bankruptcy lawyer to represent you

Since bankruptcy is so complex, it should not be taken lightly. Bankruptcy is not an everyday event and therefore should be handled with care and should be left up to the certified bankruptcy lawyer. Filing for bankruptcy yourself is doable especially with the help of software assisted bankruptcy like 1clickbankruptcy.com. But do you want to take the chance and miss filing something crucial? What if you forget to include one asset in your filing and ended up losing it to the creditors in the process? Instead of jeopardizing your bankruptcy filing, a bankruptcy attorney can help you keep your assets and help you get a fresh start in life.

Obtain credit counseling

The bankruptcy law has required you to attend credit counseling classes if you were to file for bankruptcy. Many state approved credit counseling outfits have classroom training or online sessions. Bankruptcy law setup this credit counseling requirement to educate the consumers on the importance of money management so as not to fall into any financial difficulty at any time. The credit counseling as mandated by the bankruptcy law, is comprised of 2 sessions, which should be taken in the pre-bankruptcy and the post bankruptcy phase. It is the intention of the bankruptcy law that through the education of the credit counseling course, you will never have to face bankruptcy since you are now better informed of the importance of money management.

File bankruptcy petition

The bankruptcy process officially begins with you apply your petition with the bankruptcy court of the state that you are in. The petition has a lot of bankruptcy specific forms and supporting documents such as tax return, pay stubs, bank statements, credit card statements and more.

Be granted automatic stay

Your creditors will be notified of your intention for default once you have filed your petition with the bankruptcy court. Automatic stay is given to a bankruptcy filer once the petition is filed. With automatic stay, the creditors will have to cease all pending lawsuits or collection efforts against you.

Attend 341 meeting

Meeting with the creditors is another name for 341 meeting. In this meeting, the attendees includes the filer, a bankruptcy trustee, and creditors if they choose to attend. The purpose of the 341 meeting is to verify the bankruptcy petition that has been presented to the bankruptcy court. The bankruptcy trustee will ask you questions to check the validity and accuracy of your bankruptcy documents. The creditors you have listed in your bankruptcy petition do not have appear in the 341 meeting. If the creditor objects to the debt being discharge, the creditor can submit in writing to the bankruptcy court.

Receive your final bankruptcy discharge

This is the last stage of your Chapter 7 bankruptcy process. If and when you receive your bankruptcy discharge paperwork, it means that you have successfully completed the bankruptcy petition. In the case of your unsecured debt, the bankruptcy discharge papers effectively eliminated the debt, and the creditors cannot pursue you in the future for the repayment. In the case of secured debt, the bankruptcy discharge may or may not eliminate this debt because it all depends if the underlying assets are exempt or not.

In summary, filing for bankruptcy is not an easy task. Chapter 7 bankruptcy is not something that you can just pick up along the way, it requires a lot of knowledge to achieve a successful filing. Since it is so complicated and involved, you definitely need a certified bankruptcy lawyer to assist you with the entire process through and through. Just like you would not go to a family doctor for your eyesight issue, you should not attempt to file for bankruptcy by yourself. Bankruptcy is not something you should just try and see if you can get it to work.

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by dbking

A closer look at Credit Counseling

Are you finding it hard to manage several debts within your tight monthly budget? A large portion of your income goes into making your debt payments and you find it hard to make ends meet in the middle of the month. How you wish you could do something about it and enjoy a debt-free life. Well if this is what you are going through, then a credit counseling session may click in your favor.

Where to look for credit counseling?
Simply put, credit counseling refers to getting educated about how to avoid getting into debts that you possibly cannot pay off though any debt management option. Several debt relief companies offer credit counseling services as a part of their debt relief curriculum. Besides that, credit counseling is also offered online and on phone by individual credit counselors. You can enroll with any such company or go online to get a debt counseling done.

When you enroll for credit counseling, you are asked to attend a credit counseling session with the company’s credit counselor. Here the counselor works on your debt issues by reviewing your debts and finances, suggests methods you can use to manage your debts, creates a budget for you, formulates a customized debt management plan and helps you learn ways to avoid debt.

What you should look for in a credit counselor?
A credit counselor has a key role to play in a successful credit counseling session. So, before you enroll for a credit counseling session, do take some time to evaluate the person who will be counseling you. Here are the things that you must check out:

Firstly, make sure the credit counselor is licensed to practice in your state.
Then, find out if the counselor is trained in consumer credit, debt and money management and budgeting, and is certified by relevant authorities or not. The counselor must have passed a third party counselor certification examination.
Finally, check with the Better Business Bureau and other pro-consumer groups if any consumer complaint is lodged against the counselor.

If your credit counselor meets all the criteria as stated above, then go ahead, otherwise look for some other reputable credit counselor in your state. Also do not expect legal advice from a credit counselor. Credit counselors are only trained to provide you with financial solutions; your legal queries are to be answered by legal practitioners only.

Credit Counseling and Credit Score
You can use credit counseling for a variety of services. Its impact on your credit score will depend on the combination of services that you opt for. If you use credit counseling simply to manage your debts and budget, then it will not affect your credit score. But if you use it for the purpose of debt negotiation, then your score is likely to get affected.

Advantages of Credit Counseling
There are several advantages of using credit counseling:

You learn about proper ways of budgeting and effective debt management plans.
You are relieved of creditor harassment.
Since your credit counselor tackles your creditors, you are spared the hassle of handling your debt issues directly.
Your interest rates are lowered and penalties are wiped off through debt negotiation by the counselor.
It paves way to a good credit score for you.

So, if all of that sounds promising and you have decided to go for a credit counseling session, then enroll with a reputable credit counselor and take your first smart step towards a secure future for yourself and your loved ones!

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Debt relief can be any financial product or process that provides liberation from debt or aid in the process of eliminating it. Lets see which alternatives in the financial industry provide debt relief:

As explained, there is no unique financial product or process that provides debt relief. There are many alternative solutions to debt problems that are more or less efficient according to the nature of the debts involved. Some of the solutions available are: Credit Counseling, Consolidation Loans, Debt Settlement, Money Management and last but not means least: Bankruptcy.

Credit Counseling

Credit Counseling is probably the first option that you should consider when seeking debt relief. Credit counseling is advice provided by professionals with expertise in the financial field given to inform consumers about how to responsibly use credit and financial products so as to keep debt at bay and get out of serious debt problems when your repayment capacity is reduced. There are non-profit organizations that will provide this advice for free, but there are others that will charge a small fee.

Consolidation Loans

Consolidation loans are a form of debt relief because the money obtained from a consolidation loan is used to repay outstanding debt. What consolidation loans help you obtain is a reduction of your debt exposure by postponing the repayment of your debt and by reducing the amount of money you spend on interests and principal every month. With a consolidation loan you replace expensive debt with a single loan that features lower and affordable monthly payments.

Debt Settlement

Debt settlement is a process with which the debtor obtains aid from an agent or professional negotiator that agrees with his creditors new repayment programs, cuts on the particular debts and better terms so as to make debt more affordable and easier to pay off. The process puts the debtors financial life in order but restricts the ability to obtain finance even with credit cards or personal loan products for a short period of time. Once debt is settled the debtors credit score will start recovering slowly but uninterruptedly.

Money Management

Money management are a series of techniques that are thought to the debtor so as to aid him in effectively manage his income and expenses. These techniques tend to reduce the clients debt exposure and income to debt ratio so as to make payments more affordable but also help him to budget all spending and manage money more efficiently so as to avoid late or missed payments.

Bankruptcy

Last (and we should say least), bankruptcy is also an option to bring debt relief to your finances. There are two separate processes but the main idea is to resort to a legal debt elimination system where the debtors assets are sold and the creditors collect their money up to the available limit and almost all debts are then cancelled. If at all possible, a repayment alternative with debt reductions is agreed so creditors can collect a higher amount by offering a longer and affordable repayment plan. Otherwise, they have to agree to receive whatever is available and lose the rest of their credit balance.

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