With sweeping changes in credit law, consumers find themselves scrambling for solutions. Should I get credit counseling? Should I declare bankruptcy? Can I declare bankruptcy? Where do I start? These are pressing questions facing many people today. In this brief article I will outline some steps to consider when developing your debt consolidation plan.
Debt consolidation is simply a step towards bringing your debt into a manageable state. The process as a whole may involve debt settlement, debt restructuring or more drastic measures like declaring bankruptcy. If you have concluded that the latter (bankruptcy) is your best course of action there is one important change in the law that you must comply with. New bankruptcy law requires that consumers seek ‘consumer counseling’ assistance prior to being eligible for bankruptcy. If the stress is mounting and financial doom looming I suggest you begin the counseling process right away.
Credit Counseling is a relatively painless process of evaluation and consultation. You will normally be able to reduce your debt payments by around 50% by allowing the credit counseling organization to represent you. This process will have an adverse effect on your credit but at this point it may not matter to you. If after you make an effort to utilize credit counseling and it proves to-little-to-late, bankruptcy becomes an available option.
As a credit specialist my recommendation would be to think long and hard before considering either credit counseling or bankruptcy. You can remedy most situations yourself with the right plan. Obtaining the right debt settlement software could help turn things around in as little as a few hours. A challenge I often see is caused by the chaotic state of mind that usually surrounds financial hardship. This dynamic may adversely affect your consistency. You know yourself. If you can dig in and fight for your financial solvency then you will save thousands of dollars and potentially save your credit rating. If you don’t have time, or the do-it-yourself road just isn’t for you, credit counseling or bankruptcy may be imminent…and that is ok. Hard times happen to good people.
In my opinion, the most important thing you can do to get ahead of this situation is take action. It is easy to avoid issues in hopes that they will just go away…it is human nature to do so. After all, who wants to speak to a rude collection agent or attorney after all? Unfortunately you will only be compounding the problems if you avoid them. Be brave. Either get a system for managing a debt consolidation campaign or contact a credit counselor for advice. Just because you talk to a counselor does not mean you are obligated in any way to use the service. As a matter of fact, I recommend taking advantage of their free expertise. I have reviewed and recommended both software and credit counselor’s for these endeavors. I have included a link below for your convenience.
Recovering from financial hardship is challenging but there is a light at the end of the tunnel. Remember the things that enrich your life. Your children, family, friendship, pets, good food and Mother Nature are reminders of what life is about. Take time out to enjoy yourself while taking equal steps toward solutions. Concentrate on the solutions and they will begin to manifest themselves in the form of growing security and peace-of-mind in your life.
Copyright December 2005, yourcreditcures.com, USA
Tag: Debt Restructuring
Bankruptcy and Debt Consolidation Options
Chapter 12 Bankruptcy Requirements
Chapter 12 is one of the less talked-about chapters in the US bankruptcy code, largely because it is more niche and more specific than the more universal Chapters 7, 11, and 13. While these other forms of bankruptcy declaration are used by the vast majority of Americans and American businesses seeking debt protection under the US Government, Chapter 12 is specifically for Americans working in the agricultural fields.
The basic structure of Chapter 12 bankruptcy is very similar to Chapter 13. Like Chapter 13, Chapter 12 allows for an individual to take on a financial reorganization process. The government’s goal in both chapters is to allow a debtor to restructure his or her debts in a court-ordained process. They both offer immediate, complete relief once the courts accept your application. However, while Chapter 13 is meant for the average individual American or family going through the debt restructuring process, Chapter 12 bankruptcy is meant specifically for farmers and fishers.
Provisions
The modern section of the bankruptcy code protecting family farmers and fishers was created under the Bankruptcy Judges, United States Trustees, and Family Farmer Bankruptcy Act of 1986. While originally meant as a temporary stop-gap until more permanent legislation could be passed (designed to lapse by 1993), the act was extended several times until it was made permanent in 2005.
Basically this form of bankruptcy allows farmers and fishers who meet the requirements listed in the Act to take advantage of higher debt ceilings, and a number of additional exemptions not allowed in other circumstances under Chapter 13.
Requirements
For a farmer or fisher and his or her family to qualify to file for Chapter 12 bankruptcy, he or she must meet the following four requirements: