Get Out Of Debt

If you’re living from paycheck to paycheck rest assured you’re not alone. Many folks barely make ends meet on a week to week basis. Sadly many people can’t even remember where they spend their money. They only thing they know is that it’s all spent before their next paycheck. This lack of financial wisdom is causing many consumers to file for bankruptcy as a means of relieving themselves from their high debt and financial obligations. What many folks don’t know is that this method of erasing your debts also destroys your credit rating and any hope for having a good financial status. Instead there may be another alternative – A debt consolidation refinance may be just what the doctor ordered to fix your current financial disarray.

The main reason anyone would and should consider utilizing a debt consolidation refinance is because it usually can help eliminate the harassing phone calls from your creditors and the debt collectors they employ. It’s also designed to consolidate all of your bills into one monthly payment that is slightly lower then what you previously paid in order to help alleviate some of your financially induced stress. Another benefit is the ability for a debt consolidation refinance to keep you from filing bankruptcy allowing you to stay recognized as a credit worthy consumer.

So when should you consider seeking out a debt consolidation loan or refinance? Typically, you should consider a debt relief loan as soon as your monthly bills become difficult or near impossible to pay. This early intervention through the use of a debt refinance loan will prevent you from having to pay outrageous interest rates, late payment fees and charges which will only complicate your already shaky financial status. Another good indicator of when to seek out a debt relief loan is when you only make the minimum payment amount due every month and when all of your credit balances continue to remain the same even after your monthly payments.

Homeowners have a big advantage over non-homeowners because they have the option of applying for a debt refinance using the equity in their home or house. Using this method requires the discipline to pay off your consolidate bills monthly and to avoid incurring any new bills. Don’t use your home as collateral unless you intend to make the payments on your new debt consolidation loan.

Always make sure to do your research online in order to find a reputable debt refinance and Consolidation Company. Many of these companies appear to be the real deal on the outside but in all actuality may only really be a loan shark in disguise. These establishments need to be avoided at all costs as they will place you under strict monthly payment terms and charge a much higher rate when compared to a real lender. One of the better debt refinance companies include several non-profit lenders who will be able to give you the best options when it comes to refinancing your current debt.

As you can see proper research will allow you to find a good debt refinance company which has the potential to help lower your current monthly payment total, keep you from filing bankruptcy, prevent you from paying higher interest rates and allow you to maintain your credit worthiness ranking.

You see, making a decision about which path to pursue depends on your evaluation of your individual situation.

Bankruptcy:

Pros:

o Chapter 7 Eliminates Debt and allows you to keep any equity in your home. If your problem is primarily consumer debt, this may be the best option for you – if you qualify.

o Chapter 13 restructures debt allowing you to pay off the amount in a way that makes sense for your family.

o Filing for bankruptcy stops the foreclosure action on your home.

o If you lose the home during bankruptcy, you will be able to qualify for a new mortgage in as little as two years as long as you keep your credit clean after discharge.

o Many people find that their credit scores actually rise slightly after bankruptcy because there is new money available for purchases.

Cons:

o Many people who file for Chapter 13 fall out of bankruptcy and lose the court protection provided. This means that they often not only have the bankruptcy on their record, they also face foreclosure proceedings once again.

o If you abuse the system – doing a “face filing” bankruptcy for the sole purpose of delaying the foreclosure, you may face fines from the court.

o Bankruptcy stays on your credit report for ten full years – longer than just about any other negative credit mark.

Foreclosure:

Pros:

o Stays on your record for just 7 years

o Won’t risk falling out of foreclosure and having both a bankruptcy and foreclosure on your record

Cons:

o You lose your home and any equity in it

o Generally cannot get a new mortgage for at least 4 years.

o Possibility of a deficiency judgment against you which will require a bankruptcy filing anyway

The bankruptcy code in the United States of America has been designed to protect the rights of debtors and creditors. There are various chapters, rules, and clauses in the US code. Some laws are in favor of the debtors, while others are in favor of the creditors. Time to time, new laws are also added to this system, in order to fill the loopholes, if any. The liquidation laws in America is some of the strongest laws in the world, where there is very little or no possibility to commit frauds. However, the code has also made enough provisions to save the financial life of the debtor, if his or her case is genuine.

Bankruptcy Code Is Divided In Various Chapters

There can be various types of bankruptcy cases. In order to deal with specific cases, things have been categorized in the bankruptcy code under the various chapters. For example, the chapter 7 bankruptcy deals with straight filing bankruptcy. The debtors who are in the worst phase of their financial life and whose income is not even enough to pay off the necessities of the life, can use this chapter. This chapter takes everything from the debtor other than the legally exempted assets and properties. The money thus collected by selling off the unexpected assets is then used to settle the creditors’ claims. On the other hand, a chapter 13 deals with individual or businesses that have mismanaged their finances, but have not yet lost all hopes. If they get some time and a little favorable situation, they might get their business back on the path of profit. The chapter 13 rules allow them to do just that. There are several chapters as well, such as chapter 11, 17, 20 etc.

The Bankruptcy Code Is Same In All the States

Some people have the misconception that insolvency code changes from state to state, which is not the case. It the bankruptcy laws and not the code that varies from state to state. It is important for you to understand that the new laws are not different things. They are just parts of the impoverishment system. However, as far as the laws variation in state is concerned, the major difference lies in the way the various property exemptions have been interpreted in various states. Some states have been very liberal in allowing exemptions for the debtors, while some other states are very rigid and they are more concerned towards the rights of the creditors.

You should note that the bankruptcy code is all the same all the states. If a modification is done in the code, the change will come into affect in all the fifty states of America.

In this age of living on credit cards it is not surprising to find that more and more people are filing for bankruptcy. In order to prevent the misuse of bankruptcy claim a new law called the “Bankruptcy Abuse and Consumer Protection Act,” was passed in 2005. If you are in a serious and genuine financial problem, the right thing to do is file for bankruptcy. But before you do that you would have to find yourself a cheap bankruptcy lawyer who can explain to you all the finer points of the new law and can get you a good deal.

Where to Find a Bankruptcy Lawyer

Your quest for finding cheap bankruptcy lawyers can start with your family and friends. Those who have gone through the bankruptcy experience can recommend some names. You will get an insight into how competent the lawyer is. If you know an attorney, he/she might be able to refer you to some good lawyer.

Bankruptcy is a complex legal process; therefore, it is essential to have a lawyer who can put forward legal methods to either wipe out the debt by liquidating your assets and distributing them amongst your creditors, or develop a repayment plan. Usually the first consultation with a bankruptcy lawyer is free, so make sure you put forward your real financial situation before him/her. Once you have hired a lawyer, provide him/her with a list of all the debts that you carry. This would include credit cards, medical bills, loans, cars, etc. Make sure you have your bankruptcy lawyer explain to you all the details of the new law. If you have any questions, do not hesitate to ask.

Choosing a Good Bankruptcy Lawyer

A good bankruptcy lawyer will give you expert advice on how to get your financial situation back on track. A good lawyer will help you with repayment plans and debt management. Before you finalize your choice make sure you share a comfort level with your bankruptcy lawyer.

You want a lawyer who understands the system and will do a good job to represent you. It may cost you a little more but you get what you pay for. Your local bar association can probably help you decide whether a proposed fee is fair with the local standard. You can also browse online to compare some services to get an idea how much it would cost you to hire a lawyer.

In some ways, credit cards have made the holidays easier. You don’t have to have the cash in your hands to spend on Christmas gifts. At the same time, credit cards have made it harder for us to avoid over spending. After all, putting your gifts on plastic keeps the amount you’ve spent “out of sight and out of mind.” Well, it does until at least January. The post-holiday bills are often a shock to us-and our bank accounts. If you’re thinking, “I should just file bankruptcy after Christmas and erase all my credit card debt,” an experienced St. Louis Missouri and Illinois bankruptcy attorney might tell you to start on Plan B.

One of the many benefits of Missouri chapter 7 bankruptcy is that you can find a credit card debt solution. But, if you have incurred a lot of credit card debt right before filing, your creditors might become suspicious. Spending money with no intention or repayment right before filing bankruptcy is considered fraud-and your creditors can sue you to repay the debts after the discharge of your bankruptcy.

That doesn’t mean that, when you are wondering when to file bankruptcy, you need to cross late December off your list but it does mean that you shouldn’t spend money on your credit cards like it’s money in your bank account. To truly get credit card debt help for 2010 from Chapter 7 bankruptcy, you should probably put away your credit cards and only spend what you’ve got.

So, how will you be able to afford Christmas this year? There are a few short cuts you can take that may save you some cash. First, remember not to go overboard on decorations. Buying four new plastic santas is often an unneeded expense and can be avoided by simply using last year’s. Second, if you are traveling, try and find the last minute deals on flights or consider driving. Lastly, consider a gift exchange. If you’ve got 57 first cousins, buying gifts for all of them will certainly be a headache. Save the trouble and some cash by doing a “Secret Santa” exchange.

Once you’ve taken the necessary precautions, you can start looking at your fresh start for 2010 with Missouri or Illinois Chapter 7 bankruptcy. Where can you start looking? Look for a Missouri or Illinois bankruptcy lawyer who offers you free information before you even step foot in his or her office. The best bankruptcy attorneys in your area should have articles, blogs, and publications to offer you at no charge.