Archive for May, 2010

Effects of the new bankruptcy law

Monday, May 24th, 2010

The bankruptcy reform legistation that took effect in 2005 is often referred to as the “new bankruptcy law.”  While there have been many changes to the bankruptcy laws, the truth is that most people will still be able to qualify for either a Chapter 7 bankruptcy or a Chapter 13 bankruptcy.  To determine the type of bankruptcy for which an individual or husband and wife may qualify, it is necessary to understand the requirements and qualifications that apply to each type of bankruptcy. Each person’s particular financial situation must be examined and analyzed to determine which type of bankruptcy is available.  Those that pass the “mean test” will, may be eligible to file a chapter 7 bankruptcy and those whose incomes exceed the median income for their state and who do not pass the “means test” may be eligible for a chapter 13 bankruptcy.  The means test, however, is only the beginning of the analysis because there may be other facts and circumstances that may make a chapter 13 filing the more desirable option. Rather than listening to all of the negative hype about the changes to the bankruptcy laws, it is better to meet with an experienced and knowledgeable bankruptcy lawyer to discuss your particular financial situation. Keep in mind that everyone’s financial situation is different and the only way to find out about your situation is to meet with a bankruptcy lawyer and discuss how the new bankruptcy law applies to your financial circumstances.

We are a debt relief agency.  We help people file for relief under the Bankruptcy Code.

If I file bankruptcy how will it affect my reputation?

Saturday, May 22nd, 2010

Despite the hype, filing a bankruptcy may not ruin a consumer’s reputation.  As a result of the down turn in the economy, filing bankruptcy has become a common event.  The primary reasons that cause people to file for bankruptcy protection are medical bills, loss of a job, divorce and, most recently, situations related to the mortgage and housing crisis. With more and more people filing bankruptcy, it has become a common event. Unless the person filing bankruptcy is a celebrity or is in some other way well known to the public, it is unlikely that anyone is going to learn about a bankruptcy filing unless the consumer tells someone that he or she filed for bankruptcy. While it is a major, and usually positive, life event it is not so remarkable that others are likely to pay any attention to it even if they were learn of the filing. The reason filing bankruptcy is a positive event is that it allows a person get his or her financial situation under control and make a fresh start.  Further, while a bankruptcy filing is a public record, very few people are likely to go through the trouble of searching through the public records to find out who has filed bankruptcy.

This blog is not intended to give legal advice nor does it do so.  The reading of this blog does not establish an attorney-client relationship.

We are a debt relief agency.  We help people file for relief under the Bankruptcy Code.

Credit concerns after bankruptcy

Saturday, May 15th, 2010

 In a modern society, there may always be credit concerns.  Once you have completed a bankruptcy, you should be careful to patiently and diligently work toward establishing excellent credit.  Just as it took time to get into serious financial trouble, it can take time to rebuild your credit.  Among the things you can do to better take control of your finances is as follows:

 Set a realistic budget and stick to it.  Make sure that you allocate some money for savings and an emergency fund.  Even if all you are setting aside for savings and the emergency fund is $5.00 to $10.00 each every month, the point is that you are getting into the habit of saving and planning for emergencies.  When the inevitable emergency does come along, you will have at least some money set aside to help meet the expense.

 Before making any purchase, ask, “is this something I need, or is it something I want?”  If it is something you need, ask if there is a less expensive alternative? Can the purchase wait until you have saved up enough money to cover the entire cost, or do you have no choice other than to make the purchase now?  Any time that you can safely and reasonably postpone a purchase gives you an opportunity to search out the best deal and to plan for the purchase by saving money to cover the cost.

 If the answer to the “need versus want” question is that the proposed purchase is a want, then you have the luxury of waiting and planning for the purchase.  You will have time to research the purchase, find the best product/brand, search out the best deal and of course, save up the necessary money to make the purchase. 

 Secure medical insurance if possible.  Medical bills are among the top reason that people file for bankruptcy.  If you have medical insurance and obtain timely medical care you may avoid more serious and more costly medical conditions from developing.  For example, timely medical care to diagnose and get high blood pressure under control may prevent more serious, and more costly, complications from developing.

 Avoid using credit cards unless absolutely necessary.  In general, DO NOT use credit cards to pay for your basic monthly expenses.  Keep in mind that until you are able to re-establish an excellent credit record, credit card companies may charge a high interest rate.  Paying a high rate of interest on every day expenses increases the cost of every day items enormously.

 Along with foregoing steps; you will want to obtain a new credit card account.  You may need to start with a secured credit card where you establish a savings account with a bank that offers a secured credit card.  The savings account acts as the security for the credit card.  The amount of available credit is generally equal to the amount of money you have on deposit in the savings account securing the card.  Using the credit card carefully—meaning not taking on more debt than you can handle, paying off the credit card balance in full over a period of two to three months, using the card to purchase an item you have already saved up the money to purchase and then using the saved up money to pay off the balance over two to three months will show prospective credit grantors that you can handle credit responsibly. 

 There are other steps that you can take that will further help you rebuild your credit.

We are a debt relief agency.  We help people file for relief under the Bankruptcy Code.