Smart Bankruptcy Guide

Alternatives to Bankruptcy

As anyone who has seriously examined chapter 7 bankruptcy protection knows all too well, filing bankruptcy may be the absolute worst thing that borrowers can do to improve their financial position. For desperate folk suddenly realizing that there is little they can do on their own to achieve debt relief, bankruptcy might seem like an attractive possibility. After all, from our earliest memories, Americans are taught to respect bankruptcy as the (for whatever reason) dignified end to debt crises. Whether playing board games or watching cartoons, we’re taught that bankruptcy is just what is supposed to happen once any borrower has debts that they can no longer responsibly manage. In our culture, bankruptcy is simply expected to be the final debt solutions to personal economic strife. Even as the nature of consumer debt changes from hospital bills and department store accounts to the burdens of credit cards too easily granted and too quickly filled to their limits, bankruptcy maintains a mythic allure as an all-inclusive cleanser for financial woes. 

Much as the debt protection of bankruptcy may have seemed a godsend for the generations that came before, there are now any number of new bankruptcy alternatives available for those debtors who have faced financial misfortune. More to the point, once a consumer takes time to fully analyze the Chapter 7 bankruptcy program, they may very reasonably wonder whether or not bankruptcy would be the correct choice for any debtor regardless of their own situation. Successfully filed and discharged, bankruptcy protection could indeed offer consumers new beginnings. In the best scenario, the fortunate borrowers could even start their financial lives over from ground zero, but that is only after they have suffered a harrowing ordeal that risks the utter ruination of their credit rating as well as the potential loss and seizure of any even vaguely valuable possessions. 

The relief that people may feel when entering the bankruptcy program is understandable, really. Given that most borrowers seriously considering bankruptcy have already had to deal with (the sometimes hourly) harassment from bill collection agencies and watch their mailbox fill to bursting with past due notices from credit card companies, it is not that surprising that the average consumer – struggling to pay their credit cards and other debts – would jump at the chance to have a specialist take over their affairs. The very idea that debtors would no longer be held responsible for their actions alone comes as a sort of salvation that impels otherwise cautious heads of household to essentially hand over the reins of their economic futures. Certainly, the bankruptcy lawyers charging more and more outrageous fees are not going to argue against what may as well be thought of as their own product. Despite the amount of time the lawyers may spend with their clients (they are paid by the hour, as you probably know), very few attorneys will spend even five minutes counseling borrowers about exactly what they are getting themselves into. Eliminating unsecured debts (credit cards, primarily, as these things tend to go) should be a priority, but wise debtors must recognize the limitations of bankruptcy protection under the current statutes. Above all else, they should know not to trust their attorneys for advice beyond their specialty. 

From the moment that potential clients enter their lawyers’ offices for an initial consultation, the attorneys tend to assume that the bankruptcy has already started and begin to ask questions about the best way to proceed. Of all the ways to decide whether bankruptcy is the best solution to credit card debt elimination for a client and his or her family, expecting fair and balanced advice from the lawyer potentially paid to handle their case presents problems that should be obvious to all borrowers. It is not always the lawyers’ fault, exactly. Becoming a successful attorney requires the sort of mindset that tends to ignore or flatly disregard competing notions of financial stability and methods of resolution. If anything, this mentality should be what any borrower would want to look for in their attorney, and such presumptions force the real problem. At this late stage of the game, debtors should be more interested in finding a debt management specialist who can knowledgeably tackle all of their specific issues and questions – even the questions that borrowers aren’t even aware that they have. 

Thinking, as they tend to do, that they will be able to buck the odds and turn the system to their advantage, there are a number of elements to the modern bankruptcy that most attorneys are loathe to mention despite the overwhelming importance of those elements to the people planning to file. Chapter 7 bankruptcy protection, the debt elimination bankruptcy program that was once upon a time the only sort of bankruptcy, is now far more difficult to successfully enter. Congressional legislation from just a few years ago has irrevocably changed the rules concerning the Chapter 7 process. Nowadays, borrowers attempting to file for Chapter 7 must be able to prove that they earned less than the median income for their state of residence. For debtors living in lower income regions of typically high income states like New York or California or Massachusetts, this can be absolutely ruinous. Even worse, the filers’ incomes are determined by a relatively random period set months before they actually file. If someone attempting to declare bankruptcy depends upon a seasonal rise in business or a commission that effectively makes up a dramatic percentage of their annual income, the earnings extrapolated from that small sample size could be thoroughly skewed. 

More importantly, debtors who are denied access to the Chapter 7 program by court appointed trustees should understand that they do not simply get to start over and try another avenue toward debt reduction. Instead, these borrowers are automatically switched over to the Chapter 13 debt restructuring program. With Chapter 13, debts are not eliminated. In fact, under this type of bankruptcy, borrowers are effectively forced to repay their lenders as quickly as possibly under court assessed budgets compiled using Internal Revenue Service data. As with Chapter 7 bankruptcies, the incomes that the government calculates could still be completely inaccurate depending upon the earning period from which they determine their figures and also utterly unfair since the courts do not bother to look at the specific region in which the filer lives. Within Chapter 13 bankruptcies, though, things get even more convoluted because the budget under which the borrowers are expected to survive (giving all additional funds to the accumulated creditors, naturally) also depends upon their state of residence. Meaning, people filing for bankruptcy in Seattle will be expected to have no more than the average costs of living for the entire state of Washington. In this way, the newly bankrupt have been forced to take out second jobs, pull their kids out of private schools, or even, in some extreme circumstances, sell their homes in order to relocate. 

Of course, for many of those borrowers whose financial situations are so grave that they must first contemplate the bankruptcy so-called solution, they do not need further impetus to take on a second or even a third job. This is yet another of the, for lack of a better word, hidden expenses of bankruptcy. Most borrowers have already girded themselves for the costs of bankruptcy attorneys – though they are always, ALWAYS greater than even the most well prepared debtor could dream – and the miscellaneous costs that arrive whenever the government is involved. Even the actual filing of bankruptcy shall require hundreds of dollars up front (for some reason, neither the lawyers nor the courts will allow those seeking to file bankruptcy any amount of credit). There is also the cost of essentially purposeless debt management courses from government certified instructors that filers must successfully pass before first submitting paperwork and before their ultimate discharge could be processed. As you should now expect, these courses (far from cheap – since only a few ‘schools’ per region pass government certification, they have no reason to follow the market pricing) shall be paid solely at the borrower’s expense. 

Perhaps the greatest true cost, though, is the sheer amount of time spent compiling all necessary documents and verifying that all information given to your attorney and the bankruptcy trustee is accurate beyond a shadow of a doubt. Remember, no matter what your actual intentions may have been, inexact data given to the federal authorities could be judged as fraud in criminal proceedings. Forget one teensy portion in a step-brother’s mining operation? What about that great-uncle’s time share absently gifted? And are you really sure you recorded every single bit of your income from six months ago? Every single bit? So sure that you would risk imprisonment should things turn out to be accidentally falsified? This is what bankruptcy protection actually entails. Much as there may seem a temporary relief from stress once you have passed on your credit card debts to another source, there arises an entirely different crest of tension. The bills may have stopped, true, but what exactly was on those reports? What was and was not spelled out? Beware of any supposed solutions that involve budgetary conditions prescribed by the Internal Revenue Service and guarded by the ever more ambitious watchmen of the federal justice department. 

At the end of the day, for even the luckiest of those consumers filing for bankruptcy protection, Chapter 7 still cannot guarantee the elimination of all of their personal debt loads. Secured loans, those debts maintaining attachments to actual property like cars or homes, tend to demand said collateral before giving an inch toward debt resolution. Child support and alimony – as well, if needs be said, tax liens and those financial obligations resulting from criminal trials – are obviously not to be touched, and, after a late 80s legislative fiat, student loans are also out of bounds. The medical community and various health insurance political action committees have been trying for some time to make sure that hospital bills will also be rendered immune to Chapter 7 bankruptcy protection, and, make no mistake, the credit card companies are dancing as fast as they can to ensure every single credit account receives the same treatment. 

This is not to say that there is no point to bankruptcy as we currently understand the process. As long as there is a chance to eliminate credit card debt, certain types of borrowers profoundly unlucky in their own personal finances should do whatever is necessary to attempt to clear the registers. However, for most ordinary consumers, just cutting back on purchases and maintaining a reasonable household budget shall eventually have the same effect. Whenever there is even the slightest chance of fixing personal finances without resorting to professional help, the debtor must take every last attempt to manage their own obligations however seemingly severe the deprivations. The American economy is in trouble. We are entering a recession. Still, that does not mean every worker need presume the worst nor that they should give up – which, for all intensive purposes, bankruptcy suggests. Cutting costs will never be pleasurable, debtors will have to adjust to a different lifestyle, but, once consumers look closely at the bankruptcy option, they will almost always choose any other alternative for eliminating their credit card debts. 

Even beyond careful budgeting practices, there are other maneuvers that consumers may attempt. Many credit card companies or similar lenders will offer forbearance or a stay of payment due dates if borrowers can show some cause for the delay however vague or gliding upon the rim of truth. Sickness, unemployment, familial tragedies – any decent excuse when articulately and passionately explained to an understanding representative of a lending institution may well prove the difference between bankruptcy and a survivable program of debt repayment. After all, as long as people continue to go bankrupt (and, no matter how much the enlightened borrower shall try to avoid bankruptcy, there will exist a segment of America determined to declare bankruptcy as some fated penance), creditors shall worry. Lenders don’t want to force anyone into Chapter 7 protection. Consumer credit card debt elimination as vouchsafed by the government, however rare and dangerous, would be the absolute worst possible consequence for the banks involved. 

We do understand that severe financial mishaps may necessitate governmental intervention. There is a reason that the United States originally offered such protection. However, most of the personal bankruptcies filed in America could be dealt with by other means far less damaging to the debtors’ credit and pocketbooks. Even beyond simply following disciplined household budgets and talking over the potential for re-structuring debt payments with creditor representatives, there are entire businesses that have grown up to assist consumers in their struggles with personal debt loads. Most everyone is at least familiar with the Consumer Credit Counseling program thanks to the industry’s non-stop marketing campaign, but, with increasing analysis from watchdog groups, it turns out that many of these companies are funded by the credit card conglomerates independently from whatever fees they charge their supposed clients. More to the point, the repercussions upon credit and the cost out of pocket are not much different than what borrowers could expect from bankruptcy proceedings. 

Debt settlement companies, on the other hand, though they are far less publicized (and, a new industry, exponentially less well known than bankruptcy protection by most Americans) negotiate with the credit card companies on behalf of their clients in order to reduce the total balances of the assorted debts that have accrued. Considering that – so long as bankruptcy remains a danger to their supposed holdings – lenders are more than willing to agree to something around fifty percent of the debtor’s actual obligation in exchange for virtually guaranteed payments from the debt settlement company, there is an obvious benefit for every borrower that would qualify for the settlement program. It’s not for every debtor, of course. A handful of lenders still stubbornly refuse to bargain regardless of the cause or value of the specific account. However, every debtor should at least inform themselves about the debt settlement option and take advantage of free initial consultations whenever they are available. 

As with any financial predicament, there is no way for a short article such as this to fully explain all the myriad possibilities and potentials a debtor may come across when attempting to eliminate his or her debts. Every debt scenario is different, after all, and there is no way for the borrower to come to a full understanding of what lies ahead without personal investigation. Credit card debts and unsecured floating obligations may cripple budgets temporarily, but, leaving aside the stresses unfulfilled payments may engender among heads of household, there are generally several different alternatives beyond Chapter 7 bankruptcy with which debtors may avail themselves. Look around. Cast your net around the varied solutions and see how they would best fit your particular circumstance. For an unfortunate few, bankruptcy may indeed be the only decision that makes sense, but, arduous as that choice may be, there’s a certainty that knowledge brings. Fiduciary protection (for, once again, unsecured debts; largely credit card accounts) from the federal government will always be there for the most desperate sort of borrower, the books will be balanced, but, with any luck, some chapters may not be closed.

John Chase
http://www.articlesbase.com/personal-finance-articles/alternatives-to-bankruptcy-723421.html

Errors and Omissions Insurance: a Vital Component in Protecting Against the Unexpected

Many business owners have taken proper steps to insure against property loss and injury claims, the more traditional forms of commercial insurance coverage. However, they may have overlooked protecting themselves against claims of professional negligence.

Errors and Omissions (E&O) insurance, also known as Professional Liability insurance, protects organizations or individuals against claims of financial loss due to negligence in the delivery of professional services. Professional liability related to errors or omissions, whether actual or merely perceived are not covered by General Liability insurance. (General Liability essentially covers claims of bodily injury or property damage.)

As the business climate grows more complex, so do the insurance needs of business owners, regardless of whether they employ hundreds of consultants or operate as a sole proprietorship out of their home. Errors and omissions insurance coverage is critical and it protects businesses in two vital areas: legal defense fees and settlement expenses.

Most E&O policies will cover defense costs, which, even if the allegations are found invalid, can cost tens of thousands of dollars. For many small businesses and individuals, high legal defense costs could lead to serious financial strain or even bankruptcy.

Who’s at risk?

Professionals who most commonly need E&O insurance include doctors, lawyers, engineers and consultants. However, there are a handful of businesses in which E&O coverage is often overlooked, these include advertising agencies, Web hosting companies, service providers, Web and graphic designers, and other Internet-based service companies. Nearly every organization that provides a professional service to a client for a fee has E&O exposure, and because professional requirements are typically undefined in legal terms, Professional Liability insurance shields businesses from the unforeseen.

In some cases, subcontractors may be required by the client to provide proof of General and Professional Liability insurance. Any business that provides specialized service or performs work on a project that is critically important to the client’s business, will want to insure themselves against E&O claims. This risk opens the contracted business to potential litigation. If a client perceives a task was not carried out as promised, they can file claims on several issues, including:

* Software or system failures that cause a client to lose profits
* Failure to perform duties
* Loss of client data
* Copyright infringement on Web site and software development
* Failure to meet pre-determined benchmarks on specific projects

While quality control can reduce the risk of errors and omissions, no company has complete immunity to it. Even with the best and brightest employees serving on the frontline, mistakes will happen and if the client feels the service was not completed as promised, if it costs the client money, or damages their reputation, then the company could be at risk of E&O litigation.

Ensuring the policy meets the company’s needs

Costs for errors and omissions insurance coverage vary significantly. Many factors are taken into account such as, the type of business, the type of services provided, the location, claim history, and size of the business. The competition among insurance providers, however, works to the business owner’s advantage, and the process for receiving an E&O insurance quote, cost comparison and detailed policy information should be fairly simple.

While the process will vary, some insurance company underwriters will ask for copies of contracts and descriptions of quality control procedures, while other underwriters may simply request an application be completed. When searching for an E&O insurance quote or reviewing a policy there are several key features to be mindful of:

* Coverage should include legal defense costs.

* Both W2 employees and 1099 subcontractors should be covered – the company should be protected against claims from work performed by 1099 subcontractors on the company’s behalf. In many cases, however, 1099 personnel are not covered and would need their own errors and omissions insurance coverage.

* Optional coverage for allegations of copyright and intellectual property infringement – this protects the company from claims alleging copyright infraction. Intellectual property infringement coverage is particularly important for software, systems or processes, as they are the most widely known “intellectual properties.”

* Personal injury coverage such as claims of libel, slander and invasion of privacy

* Worldwide coverage – this covers incidents regardless of where they originate.

Defending a claim

In the event a claim is filed, E&O insurance will adequately prepare the company to defend its case. It will pay for a strong legal defense and potentially save a small business or individual from severe debt. Unfortunately, laws and legal precedents that govern the technology industry are still under development, which often puts IT professionals in unknown legal territory.

However, while mistakes are bound to happen, there are a few steps businesses can take to mitigate claims:

* Have a written contract detailing what service will be provided, what is not included and the fees for delivering that service

* Communicate throughout the entire job; give the client realistic expectations upfront and provide regular status updates

* Implement quality control procedures, and regularly conduct audits to ensure the procedures are being adequately executed

Once the contract is written, be sure it contains very specific information, including:

* Limits of liability – the dollar amount per occurrence of liability

* A section detailing the services the company will be providing

A written contract is one way businesses and individuals can protect themselves, however E&O insurance will provide an extra layer of protection against the unknown and unexpected. Defending a claim is costly and time consuming. Regardless of whether a suit is deemed unreasonable, attorney fees will still need to be paid. In some instances, costs for defending a case can exceed the cost of a resulting settlement. E&O insurance covers attorney fees, any settlement costs that may result, and allows the business owner to continue operating without fear of potentially having to face bankruptcy or a mountain of debt.

James Cochran
http://www.articlesbase.com/insurance-articles/errors-and-omissions-insurance-a-vital-component-in-protecting-against-the-unexpected-635197.html

Military Personnel and Families and Identity Theft

As a member of the U.S. Military and away from your usual posting, you should consider placing an “Active Duty Alert” on your credit report.  This alert will help to minimize your risk of identity theft while your deployed.  A persons credit report contains the most vital personal information, including your home address, how you pay your bills, whether you have been sued, arrested or filed for bankruptcy.  It is routine for banks, insurers, employers, utility companies and businesses to use the information in your credit report to evaluate your application for a mortgage, credit card, car loan, cell phone and much more.  With you away, perhaps on the other side of the world, identity thieves have a perfect opportunity to use your personal information to open new accounts in your name.  The thieves will most probably not pay the bills and the delinquent accounts show up in your personal credit report. 

 

Fraudulent and inaccurate information may affect your ability to get a loan, rental housing, car insurance or credit card when you return to the U.S. or long after your return.  This is why we suggest you place an active duty alert because according to the Federal Trade Commission, the alert requires creditors and businesses to verify your identity before issuing credit or opening an account in your name.  The active duty alert makes it much more difficult for the identity thief to use your personal information in an illegal way.  The active duty alert will last for one year unless you ask to have it removed sooner.  If your deployment exceeds one year you may place another alert.

 

Amendments to the Fair Crediting Reporting Act allow you to place the active duty alert.  To place the alert or remove it, just call the toll free number of one of the nationwide consumer reporting companies, and they are Equifax, Experian, or Trans Union.  These reporting companies will ask for meaningful proof of identity and could include your Social Security number, your name, address and other identifying information.

• Equifax: 1-800-525-6285; quifax dot com
• Experian: 1-888-EXPERIAN (397-3742); experian dot com
• TransUnion: 1-800-680-7289; transunion dot com

 

 

You only need to contact one of the above companies to place your alert because the company you call is required to contact the other two.  The other two will now place their own alerts on their version of your credit report.  Contact information could change before your alert expires and then you would have to update it.  When the active duty alert is in place, your name gets removed from the nationwide consumer reporting companies’ marketing lists for pre-screened or preapproved offers of credit and insurance, for two years. 

You may ask to have your name placed on the lists, if you want, before deployment.  Please realize that your friends and family know for quite some time that your going to be deployed and one of them could, without knowing it, say something that gets back to an identity thief.  Imagine what the thief could do with your identity while you’re gone for an entire year.  Protect your identity, because identity theft is real and growing in America.

Do you want to learn about Identity Theft Prevention & Identity Theft Protection. Stop Identity Theft with LifeLock. LifeLock can guarantee identity theft never happens to you. To see how lifelock identity theft protection works

 

Randy Vezina
http://www.articlesbase.com/insurance-articles/military-personnel-and-families-and-identity-theft-493905.html

Lawyer Can’t Stop Practicing, Even After the Judges Tell Him to Stop

From: New York attorney Gary E. Rosenberg (personal injury and accident attorney and lawyer; serving Brooklyn Queens Bronx; Queens Injury Lawyer)

In Re: Bertram Brown

Please pay attention to this timeline:

December 15, 1954 – Bertram Brown is admitted to the practice of law in the State of New York.

On May 5, 2004 – a complaint was made by Lucia Santiago that Bertram Brown had represented the Santiago family in the sale of real property in Richmond Hill that netted proceeds of $61,498.35. Bertram Brown allegedly put the money into his personal bank account and spent some.

July 21, 2004 – a complaint was made that Bertram Brown took $74,000 of client funds, which he denies. A judge makes this complaint against him. Allegedly he sold a property for an estate (of a dead person) and kept the money from the sale, depositing it into his personal bank account, which money was supposed to go to the deceased’s heirs.

December 8, 2004 – a complaint was made by Janice Ryan who hired Bertram Brown to represent her in a foreclosure proceeding and to get her mortgage with Chase Manhattan Bank reinstated. The mortgage was $85,000 in arrears at that time. In order to facilitate the reinstatement, Ryan entrusted Bertram Brown with $73,069.00. After the bank rejected the application for reinstatement of the mortgage, Bertram Brown advised Ryan to file for chapter 13 bankbankruptcy protection. Bertram Brown also suggested he retain the money to hide it for the duration of the bankruptcy proceedings (which is bankruptcy fraud). Once Ryan demanded the return of the funds, however, Bertram Brown repaid only $7,500.00, and only after repeated demands. The checks totaling the $7,500.00 were drawn from Bertram Brown’s private account.

September 27, 2005 – Bertram Brown is immediately suspended from the practice of law, even before the charges against him are finally decided. This is to protect the public.

Further proceedings are held.

The Court notes:

“This Court’s order of suspension was entered on September 27, 2005, and was served via overnight mail on [Bertram Brown's] then counsel in the afternoon of September 28th. On September 30th, [Bertram Brown] appeared before New York Civil Court Judge Jeffrey Oing, on behalf of his client Third Avenue Wireless, Inc. According to an affidavit from [Bertram Brown's] adversary, [Bertram Brown] appeared that day and made an application for an adjournment so that he could prepare and submit opposition papers to a motion, and entered into a stipulation adjourning the motion for that purpose.

On October 3, 2005, the adversary telephoned [Bertram Brown] asking him if he was suspended. [Bertram Brown] initially did not admit to it, indicating that the Committee was only looking into allegations, but when pressed, finally admitted he was indeed suspended. On or about October 17, 2005, [Bertram Brown] served the Committee with his affidavit of compliance with the order of suspension as required by 22 NYCRR 603.14(a)(I), swearing therein that he had fully complied with the provisions of the suspension order and the rules.

Nevertheless, two days later, on October 19, 2005, [Bertram Brown] again appeared in court on behalf of a client, Virginia Khublall, this time before Queens Supreme Court Justice Allan B. Weiss. Prior to the call of the calender, [Bertram Brown] engaged in negotiations with his opponent. [Bertram Brown] then appeared on behalf of the plaintiff never alerting the court or his adversary to the fact that he was interimly suspended. While [Bertram Brown] eventually advised opposing counsel that he had to be substituted because of a disciplinary “problem”, he did not do so until Friday, October 21, during a settlement discussion. To date, [Bertram Brown] has never advised counsel that he has been suspended.”

October 25, 2005 – Bertram Brown is questioned under oath anjd denies that he practiced law

in the Khublall matter because he had informed his client that he had been suspended before the court appearance and only appeared in court to obtain an adjournment.

November 2, 2005 – a complaint was made by Andrea Conyers alleging that Bertram Brown, among other things, had been holding a real estate buyer’s down payment in the amount of $30,000 since November 2004. Bertram Brown claims the money is preserved intact and had been returned ott he buyer’s attorneys, but his bank records reflect that from October 14 through November 7, 2005 (after the effective date of his suspension), he made six withdrawals to himself totaling $24,000, causing the balance in his account to fall below the amount required to be maintained on behalf of that third-party buyer.

April 13, 2006 – Bertram Brown is disbarred (loses his law license) for good.

You would think this would be the end of this matter, but it’s not.

January 2007 – Bertram Brown is caught representing a client in The Bronx while using the name and credentials of a former associate, then again in Queens in September using the same alias. Both times, he is punished only with probation.

January 2009 – Bertram Brown, 81 years-old, surrenders to Brooklyn prosecutors for allegedly using a phony name to represent a client in a housing-court case. He was caught representing a Brooklyn landlord in a suit brought against him by a tenant. He faces mandatory jail time if he’s convicted of another felony.

Comment: Does anyone think to check if he’s mentally competent?

Gary E Rosenberg
http://www.articlesbase.com/law-articles/lawyer-cant-stop-practicing-even-after-the-judges-tell-him-to-stop-754452.html

Consolidate Credit To Stop Getting Turned Down

If you ave been applying for credit and always being turned down, that is because your credit report has negative information on it. Time to do something about that! Your credit file is the information kept by credit reporting agencies concerning your record of payments to creditors. There are three major credit reporting agencies who perform these services for companies who are interested in finding out how good or bad a risk you are. Whenever you apply for a loan, try to rent an apartment and even apply for a job, you can be sure your credit report is being looked at. Time to do something about your personal finances if you have a bad credit report and you get declined for any of these.

Your credit file is built up over the years by the credit reporting agencies who keep track of all of your bills and your bill paying habits. If you have been in the habit of missing payments, being late, or just forgetting to pay, that will all be in your credit file as marks against your credit. These will result in lower credit scores, and lower credit scores mean you will not have a very good chance of getting a loan, or some other things you might be interested in, such as an apartment or a job. The opposite will also happen: if you are consistently a good payer, you can be sure you will be able to get a car loan, mortgage, credit card line or just about anything else from a lender.

With so many people filing bankruptcy these days, or using debt management programs, the lending companies lose money. So they want to avoid risks with people who may end up in bankruptcy. A bankruptcy ruling will stay on your credit record for ten or fifteen years. Debt management companies help you temporarily, but you are extending your debt and paying more fees, so it is harder to get out of debt.

You do have some protection under the law, but if you have bad credit, you will never really breathe easy until you can completely clean it up. In addition to a negative credit report and low credit number, we are also going to be facing judgements, foreclosures on a home, or repossession of goods, and even perhaps lawsuits. No one wants to risk being homeless and penniless. You know you have to find a way out.

What if you are in a situation where you cannot make a living, such as if you are on welfare or on disability? Look at any option you can to repair your credit. If you car is too expensive, find a cheaper one. If your home is too expensive, you may have to size down to one you can afford. Once these big expenses are eliminated, you can start to pay down debt and get your credit report back on track. This is the only way you will stop being turned down for credit.

Jack K. Blacksmith
http://www.articlesbase.com/finance-articles/consolidate-credit-to-stop-getting-turned-down-97732.html

What You Should Know About Credit Cards

This interesting article addresses some of the key issues regarding credit,credit card,zerocredit,how to get credit. A careful reading of this material could make a big difference in how you think about credit,credit card,zerocredit,how to get credit.

Practically everyone in the United States has credit cards. From teenagers to retirees, almost everyone has at least one credit card. Everywhere we go we see ads – in the television, radio, newspapers, billboard advertisements – on credit cards. Some credit cards are even mailed directly to our homes. But what are credit cards, why should you have one and what are some of the risks involved?

Simply stated, a credit card is a financial arrangement between you, the consumer or the card holder, and an institution such as a bank. The arrangement specifies that you borrow money from the lending institution with the promise that you will pay them back in the future. The institution agrees that it will provide the money you need and in-turn you are expected to return payment over a certain period of time. Your payment will include not just the amount of money you borrowed, but also an additional charge based on a pre-defined rate of interest.

Credit can provide various services, making it an indispensable tool for today’s consumers. These include:

Convenience. You saw this wonderful dress in a shop. Perfect for tonight’s party, you thought. But you don’t have money right now. Thanks to your card, you can buy anything you want right now. Credit cards give you that wonderful allowance not to bring that much cash and to order goods from catalogs. In addition, many of the online-based shops and stores, such as Amazon.com, mainly accept payment using credit.

Emergency Protection. For emergency situation, credit cards can be an extremely helpful tool that could be your friend that could pay for your emergency needs, like when your car conked out in the road, or your mother gets hospitalized, or any emergency situations that you need money but can’t get it from the usual means.

Putting you in the right budget. Want to keep a detailed record of your expenditures? Credit cards can do that.

Security. In today’s world, carrying large cash has become a problem. If your cash gets lost, there’s no way you can retrieve it. Compared with credit cards, money cannot be returned back when it got lost or stolen. If your card, for example, got broken or it got lost or someone stole it from you, you can always ask for a credit card termination or cancellation. You will have another card, a new one that will replace it in a few days.

Traveling. If you’re quite a traveler, whether across the town or country, or outside the US, it is relatively easier to travel with a credit card.

When used responsibly, credit cards can help improve our daily lives. With credit cards, life can be much easier. However, the joy of using credit cards can quickly change to a curse!

Are you starting to get notices from creditors to pay or “else”? Are you worried that you might lose your properties like your house because of credit debt? Chin up: Dealing with credit card debt is not as hard as you may think.

And, if there’s any consolation, you’re not the only one facing such situations. At some point, many people like you face financial crises with credit card debt.

Sometimes the most important aspects of a subject are not immediately obvious. Keep reading to get the complete picture.

Here are some simple tips to help you cope with your credit card debt:

Make a Budget.
If you want to have a grab of your financial situation before you lose everything, making a budget is what you should do first. Assess how much do you get from your income or other means and your expenditures. For example, if getting that posh apartment means you have to limit your meals to once a day, then it is not a great and sound budgeting decision. Your goal is ensure that you can answer for all the basic necessities: food, housing, clothes, health-related costs, among others.

Contact Your Creditors.
Remember: Running away from your creditors is not the answer. It is not a solution, and may in fact lead you to bigger problems. If you are having trouble paying off your debts, address this immediately with your creditors. State to them sincerely and fully the reason why it has become hard for you to pay these debts, and check if they could give you a revised payment arrangement that will put you at ease on your payment terms. Do not let creditors turn over your situation to someone or an agency to do the collecting for them, as this means that they have given up on you.

Address Debt Collectors.
There is a law that gives certain conditions for debt collectors as to when and how they should ask you to pay. The federal law, Fair Debt Collection Practices Act, clearly states that those collecting debts may not bug you, give false assertions, or do practices that are not fair when they are getting to collect money from you.

Get Credit Counseling.
You could also consider getting the aid of groups or institutions that will help you in your problems. If you managed to have an improved payment arrangement of your debt with a good credit counseling organization, creditors may approve of your proposition and accept your modified arrangement plan..

Bankruptcy.
Generally, personal bankruptcy is known as the last choice to fix your ballooning credit debt. A bankruptcy unfortunately stays on your financial information report for years. Getting additional credit, buying a house, sometimes even getting a job might be hard for you. Technically, however, it is a legal way of addressing your credit debt.

Enjoy the use of credit to make your life easier. . .BUT don’t let it become a nightmare! Learn to use your credit responsibly.

Hopefully the sections above have contributed to your understanding of credit,credit card,zerocredit,how to get credit. Share your new understanding about credit,credit card,zerocredit,how to get credit with others. They’ll thank you for it.

Michael Hehn
http://www.articlesbase.com/non-fiction-articles/what-you-should-know-about-credit-cards-86799.html

What happens to common stock now that CIT has filed for chapter 11 bankruptcy protection?

They are not going out of business. They filed for protection from their creditors, basically asking the court to allow them to stop paying their bills, while they reorganize and look for additional financing.

The stock will continue to trade on the exchange exactly as it always did. The stock may become worthless or may simply drop further in price depending on what they negotiate with the court and their creditors. They have assets to sell and depending on how much they can sell them for they might be able to remain in business but the company will be worth less and the stock will reflect that. They may also issue more stock giving their creditors a larger ownership share of the company which leaves less for the common stockholders and the stock will reflect that.

After filing Chapter 11 Bankruptcy, do I continue paying rent while under bankruptcy protection?

I own a small bakery at a mall under an LLC and thinking of filing for chapter 11 protection because I am behind rent and my landlord would not renegotiate the lease. My question is, after filing, does the court grant a stay in sending rent to my landlord? If so, until when?

Reread your chapter 13 filing – you must give all your assets to the court to decide who and how much to pay. What would the court gain by delaying your rent payment?

How long does it take for a company to emerge from bankruptcy protection?

How long does it usually take for a company to emerge from bankruptcy protection?

It used to take 6 months to 1 year. Some would drag on for 3 years. Now it can be faster. General Motors and Chrysler were finished in less than 2 months.

Caught in a Riptide of Mortgage Debt With Rising Monthly Payments

When the nightly main stream television news leads with stories regarding mortgage foreclosures and down turning markets a viewer knows a trend has arrived. This is all backed up with data indicating the surge of properties for sale on the market with mortgage foreclosures trending up as well. Various areas are experiencing more downside moves than others. However, the overall housing trend is down at the current moment. Two years ago, if a buyer or seller breached the subject of a Short Sale, where the lender settles less than what is owed, the response would have been “What are you nuts?” “We’ll just put it on the market and it will be gone in two weeks.” Moving forward, if a seller is setting on a mountain of debt and just happened to have an ARM mortgage with negative amortization building up to 115% of the original mortgage this could be a bad thing. Then simultaneously the property values have dipped then the owners may find themselves upside down in the property where the mortgage is larger than the value. Some areas have had employment downturns as well to further complicate the affected family’s financial stability. This is all with a backdrop of a rising economy that gives hope in the long-term scope of things. Historically, real estate, much like other investments rolls out in cycles. Right now, there is some question whether the bottom is in sight. Lower priced properties will spur some activity along with seller concessions. Buyers are now enjoying the comfortable shoes and benefits of seller’s past. Interest rates are still at a reasonable level compared with say 20 to 30 years ago. Thus a good price with terms and concessions will garner interest from buyers. Enter the lender-stage right.

The phone was ringing night and day with bill collectors. The power had been shut off recently, now back on. The latest notice of payment increase from the lender had been received and the payments were going to go up $300/month on their Adjustable Rate Mortgage (that has a negative amortization feature) starting in two weeks. Terry and Lynne were up against it. With three children the family budget was in the process of blowing up. Three years ago, while competing against five other buyers, Terry and Lynne bid $15,000.00 above the list price to get an accepted offer. Now the prices in the neighborhood have fallen back. If they were to sell using a Realtor plus other costs there would not be enough to cover the mortgage, they would have to bring money to the closing table in order to close the deal. This was not a good prospect. With savings tapped out there just wasn’t any cash available. Terry and Lynne quickly recognized that they had to do something immediately or their home would be falling into foreclosure. In the short term, they got rid of their cars along with the big payments and bought some high mile but reliable automobiles for transportation. That was still not enough. To keep things going, all the credit cards had been maxed out and there just wasn’t one extra dollar to pay the minimum payments. Macaroni and cheese was getting pretty old.

Terry and Lynne decided to sell the house and move into something smaller and less expensive. Recently the taxes and insurance had gone up as well on the property. Hits were coming from all sides. Terry and Lynne contacted the Realtor who had sold them the house. They had been getting her monthly newsletters since they had bought the home. In a recent newsletter, there was an article regarding a Short Sale. Terry called Nancy, the Realtor, to find out if that might work for them. Nancy explained with a bona fide contract on the table and a financing approval letter for the buyer, the lender MIGHT consider a Short Sale. Comparables were pulled at it looked like the value was about $30,000 less than what was owed. Terry and Lynne gave Nancy a Signed Authorization to discuss the mortgage status and the possibility of lender assistance. Nancy made the contact to the lender and discussed the fact that Terry and Lynne had to move as they were out of cash. It turns out that even at the lower payment before adjustment, Terry and Lynne had been 30 days or more late every month called in the mortgage trade a rolling thirty. The lender was aware of their struggles at least as far as their mortgage pay history was concerned. This was one of the top lenders of the country and this was not unusual with their current portfolio to hear the same recurring story. Times were tough. If a foreclosure was to take place over a six-month period, the losses could be in the $50,000 to $60,000 range or more per trade numbers. Nancy explained that the lender had the right to go after a Deficiency Judgement against Terry and Lynne for any monies not satisfied at closing and that they should consult an attorney for legal advice. There likewise could be taxable income to Terry and Lynne for the shortfall amount. An accountant needed to be consulted. The attorney shared that they could do a Deed In Lieu Of Foreclosure, but it would be on their credit. The Short Sale may save the lender some money over going to a full foreclosure. Terry and Lynne decided to give the sale aspect a shot. At the same time, the attorney explained the benefits of seeking some protection through a Chapter 13 Wage Earner Bankruptcy Plan. A plan would be submitted to the Bankruptcy court and if the creditors agreed their overall payments could be reduced by at least a $1,000/month. This was the kind of relief Terry and Lynne were looking for.

It took three months to get an offer where the seller was being asked to pay $9,000.00 of the closing costs and prepaids. The offer was subject to lender approval on the Short Sale. The offer, pre-approval letter on the buyer together with the seller concessions and all addendum together with the facts that Terry and Lynne had filed a Chapter 13 and had excluded and exempted the mortgage from the petition was all shared with the mortgage holder. It was unclear whether the Bankruptcy Trustee was required to approve the sale. Their attorney was to follow up. Bottom line, the lender was being asked to take a $43,000.00 hit at closing. The lender took a week to answer. The contract was structured to allow for time on a lender answer. The phone rang and Terry picked up the phone. It was Nancy, the lender had accepted the terms on the condition that they received zero money at closing. They would take their furniture and turn over the keys and that was it.

Terry and Lynne felt like a boxcar had been lifted off their shoulders. After closing, they vowed to did out of this hole and take some family budget course and set on a strong savings regimen. With the monthly housing savings, Terry and Lynne were able to put a first and last months rent down on a large three-bedroom townhouse rental in the kids same school district and were now considerably below their former housing payment by $900/month. With the savings from the Chapter 13 Wage Earner Repayment Plan Terry and Lynne were now able to breathe and maintain a family budget with savings. With on time payments of the Chapter 13 Repayment Plan, over time, their credit should improve. The once per year free credit reports from the three bureaus will help track their progress. They planned now to accelerate the payback plan by $400/month and reduce the pay out term to 36 months. Terry and Lynne could see the light at the end of the tunnel and it was not an oncoming train.

In this case, the Short Sale was the answer for this couple. It’s not for everyone. Some lenders will not even consider it. It is a tool that can be used to solve an otherwise impossible situation.

Many lenders do not pursue the Deficiency Judgement, some do. It would be prudent to determine the lender’s intentions. An attorney at the ready is a good idea to work out a plan.

Dale Rogers

www.BrokenCredit.com

www.sellerhelpsbuyer.com

All rights reserved. Article may be reprinted as long as the content remains intact, unchanged, and all links remain active.

Dale Rogers
http://www.articlesbase.com/mortgage-articles/caught-in-a-riptide-of-mortgage-debt-with-rising-monthly-payments-102822.html