Sunday, September 7, 2008

Debt And The Risk Of Bankruptcy

There may be other alternatives to going bankrupt which can also help people in serious debt to make a fresh start. If your debt situation has not yet reached a point of no return, credit counseling and debt management may be the best option for you.

If it has even been in the back of your mind, you should take the steps to avoid bankruptcy. You will have to avoid missing records and bad checks to keep from adding to the bill. Knowing some important aspects of bankruptcy can help make your debt burden much easier to manage and can help you avoid hassles in the near future. How can you avoid bankruptcy.

Hopefully, the new law will come into effect by mid-March. Although it was a little bit frightening at first, the new bankruptcy law was not that much of a hassle. The new law requires clients wishing to file for bankruptcy to undergo a six-month credit counseling. Texas bankruptcy law for example protects you, as a consumer, from falling into financial turmoil and is put in a situation where you can be abused by creditors.

Creditors

The moment your petition is filed an automatic stay is in place that means your creditors listed in the petition must stop their collection procedures during your bankruptcy proceeding. The United States Bankruptcy Code provides the debtor an opportunity to pay back their creditors over a period of time of up to five years. The creditors are required by law to follow strictly the terms of the repayment plan.

However, as long as you have the funds, you will still be required to pay all your creditors based on a schedule determined by the bankruptcy court.

Loans

An auto loan after bankruptcy does not mean you have to have a co-signer or collateral. One option is to get an auto loan through a dealership. If you need a new automobile, obtaining a new car loan is perfect for rebuilding credit. Because the loan is secured by the vehicle, most lenders are willing to give loans to people with a bankruptcy. You can apply for Loan with High Risk Lenders. In fact, several lenders specialize in offering loan programs to individuals who have recently filed bankruptcy.

Interest

Financially the person is haunted with higher interest rates, higher down payments, and outright rejections for many years to come. Compare fees and interest rates, as well as, repayment options and customer service. Then, when the high interest rates are added in, people find themselves in a situation where repayment is often impossible.

They rightly point out that bankruptcy costs the credit card companies billions of dollars each year and that those costs are passed on to consumers in the form of higher interest rates.

Lawyers

Be honest with your lawyer and do not withhold any information that is relevant to your case. Do not be afraid to interview a lawyer and leave without retaining one if you are not satisfied. When all hope is lost, a new beginning can be created with the help of a good lawyer specializing in bankruptcy, by making use of the provision of the Bankruptcy Code. Look for a certified specialist or a lawyer with significant experience in bankruptcy. Ask your lawyer questions if you do not understand something.

Trustee

In a court-supervised procedure, a court appoints a trustee who liquidates the non-exempt assets of the debtor 's estate and makes distributions to creditors. Most people will pass through a bankruptcy case and keep everything they have, says John Hargrave, a bankruptcy trustee in New Jersey. Trustee within 180 days of the date of the filing of a bankruptcy case.
Although the debtor files a schedule C form for property claimed as exempt, the property is not exempt until the trustee files the property exemption report which actually divides the property as exempt or non-exempt. In an orderly, court-supervised procedure, a court appointed trustee liquidates the non-exempt assets of the debtor 's estate and makes distributions to creditors.


1 comments:

valrossie September 29, 2008 at 3:50 PM  

This is a big deal, and will no doubt strike real fear in the hearts of stated-income lenders everywhere. Our own Uncle Festus sent me this decision, in which Judge Leslie Tchaikovsky ruled that a National City HELOC that had been "foreclosed out" would be discharged in the debtors' Chapter 7 bankruptcy. Nat City had argued that the debt should be non-dischargeable because the debtors made material false representations (namely, lying about their income) on which Nat City relied when it made the loan. The court agreed that the debtors had in fact lied to the bank, but it held that the bank did not "reasonably rely" on the misrepresentations.
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valrossie
http://www.shepelskylaw.com

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