ComputerHunter.org |
|
|
|||
|
 |
Bankruptcy: What the New Law Means to You
On April 20 of this year, President Bush signed a bankruptcy reform law. When this law goes into effect in October of this year, it will be much more difficult for Americans to use Chapter 7 bankruptcy to get a fresh start on their financial lives. Under current law, you can choose to file either a Chapter 7 or Chapter 13 Bankruptcy. In a Chapter 7 proceeding, you are allowed to keep your exempt property, such as much of the equity in your home. Most of your other debts, such as money owed on credit cards, are discharged. In comparison, a Chapter 13 Bankruptcy is a reorganization bankruptcy. In this type of proceeding you agree to pay off your debts over a period of three to five years. The result of the new law is that fewer people will be able to file for Chapter 7 Bankruptcies and will be forced to file for Chapter 13 Bankruptcies, instead. Major Changes Possibly the biggest change to bankruptcy law is that there will now be a qualifying test. Under this two-part test, you will first be required to apply a formula that exempts certain expenses such as food, rent, etc., to see if you can afford to pay 25 percent of your "non-priority unsecured debt" (credit cards, medical bills and the like). Second, your income will be compared to your state's median income. If your income is above your state's median income, and if you can afford to pay 25 percent of your unsecured debt, you will not be allowed to file for a Chapter 7 Bankruptcy. You may be able to file for a Chapter 7 Bankruptcy if your income falls below your state's median income but you can pay 25 percent of your unsecured debt. However, if the court believes you would be abusing the system by filing a Chapter 7, you can be required to file for a Chapter 13 Bankruptcy, instead. More differences If you file a Chapter 7 Bankruptcy today, the court will determine what you can afford to pay based on what you and the court determines are reasonable and necessary living expenses. Under the new law, the court is required to apply living standards that are derived by the Internal Revenue Service to determine what is reasonable to pay for rent, food, etc., and how much you should then have left over to pay your debts. The IRS regulations are more stringent and if you want to contest them, you will need to ask for a hearing in front of the bankruptcy judge. This can easily mean more time and expense. Tougher exemptions When you declare bankruptcy today, your state may allow you to keep all or much of the equity you have in your home. However, the new law places tougher restrictions on this exemption. So before you file, be sure to discuss this with a knowledgeable bankruptcy attorney so that you will know exactly how much of your home's equity you can expect to protect. Credit counseling Here's another tough restriction. Under the new bankruptcy law, you must meet with a credit counselor in the six months before you apply for bankruptcy. You must also attend money management courses ? at your expense ? before your debts are discharged. Since the new law makes it so much tougher to declare a Chapter 7 Bankruptcy, you might think about filing now, before it goes into effect. Before you do anything, make sure you talk to a good bankruptcy attorney. Also, be sure to keep in mind that it takes a couple of weeks to file for bankruptcy. This means that if you want to take advantage of the current law, you should plan on filing at least by the beginning of September of this year. For FREE help with debt and credit, subscribe today to Douglas Hanna's free email newsletter "8 Simple Steps to Debt Relief" at http://www.all-in-one-info.com
Google News - Top Stories
|
|
|
|
RELATED ARTICLES
The Last Debt Solution Should Be Bankruptcy A debt solution like bankruptcy should really only be used as a last possible solution. The problem with this solution of debt problems is that it includes a lot more than simply eliminating debt. When someone declares them self bankrupted, all debt collection actions against that person are prevented. The court grants an "automatic stay", which - with a few exceptions means that creditors cannot come after the money owed to them. Assess Your Financial Attitude and Eliminate Your Debt Forever Want to know if your attitude towards your finances is helping you or damaging your future? Take this Quiz and find out... Debt Elimination 1 If you have multiple debts, you may well be wishing you had a debt elimination wand to wave and make all the debts disappear. You would probably wish even harder for that magic wand if you were falling behind with, or at least struggling hard to keep up with, the monthly payments on those debts. IVA Advice An IVA (individual voluntary arrangement) is an alternative to bankruptcy introduced by the government as part of the Insolvency Act 1986. This article provides an overview of IVAs and suggests what readers should watch out for when looking for IVA advice. Learn The Five Key Debt Reduction Steps You Must Take Immediately! Step 1. The purpose of this first step is to bring you back to reality. You must know exactly how much money you owe and to whom you owe it. The Credit Card Debt Termination Scam "Legally terminate credit card debt! You can be debt-free in 4-6 months!" Advertisements like this are for a new type of program that has spread via the Internet over the past few years. It's called "Credit Card Debt Termination," and victims are paying $1,000s for this bogus service. One victim I spoke with lost more than $15,000! In this article, I'll review the principles behind this program and explain exactly why it's a scam to be avoided. Bankruptcy As An Option If your financial worries are preventing you from sleeping at night, then you may have considered bankruptcy in hope of a little relief. Usually, consumers only turn to bankruptcy if there is no other hope for them to get out of debt. Many have been to credit counseling and even consolidated their debt into lower monthly payments before they finalize their financial ruin in bankruptcy court. How to Choose a Debt Settlement Company As consumer debt continues to spiral out of control, debt relief is fast becoming a major concern for many American's. In 1999, American's made $1.1 Trillion worth of credit card purchases. In 2001, American credit card debt hovered around $690 billion. Unfortunately, in today's unstable economic conditions, many American's are being forced to turn to credit cards as a way to extend their income. Consumer debt is at an all-time high and American's need to know what they can do to get out of debt. Often, consumers are seeking the services of professional debt settlement companies to help regain control of their finances. However, prior to making such an important decision, it is important to fully understand who you are doing business with. Debt Negotiation and Debt Settlement Debt negotiation and settlement can give you a drastic reduction in the amount of debt you owe and allow you to repay your debts in a much shorter time. Resolving your debts is important to your well-being and financial stability. Debt negotiation is a way out of debt without filing bankruptcy. Paying your debts off at a much lower interest rate and lowering your monthly payments will have a better long-term outcome than bankruptcy or simply not paying them at all. Your credit standing can be restored in much less time than it takes for a bankruptcy or delinquent accounts to be removed from your credit report. Bankruptcy - The Easy Option? Incredibly, since the changes in the bankruptcy law in April 2004, debtors are more likely to petition for their own bankruptcy rather than their creditors! You would think that most people who have been threatened with the prospect of being made Bankrupt would be riddled with fear of the possibility. It is more widely referred to as the "Big B" rather than the dreaded word itself. However, is this a thing of the past? Since the changes in The Enterprise Act 2002 took place in April 2004 it would appear a lot more people are inclined to petition for their own bankruptcy as a solution to their debt problems. Taking The Plunge Into Bankruptcy Bankruptcy is one of the most difficult things a person has to do. The decision to file bankruptcy is a hard one. Is it moral to wipe your slate clean through bankruptcy? Is there any way for you to avoid bankruptcy? While everyone has their own opinion on bankruptcy, bankruptcy is often the only option some people and families have. So, what do you do when you are in the midst of being bankrupt? What are your options at this bankruptcy point? Worried About Debts? Having trouble paying your bills? Getting dunning notices from creditors? Are your accounts being turned over to debt collectors? Are you worried about losing your home or your car? Budget the Luxuries First! Strictly speaking, his advice was preceded by another Heinlein maxim as well. "Sovereign ingredient for a happy marriage: Pay cash or do without. Interest charges not only eat up a household budget; awareness of debt eats up domestic felicity." Today, that advice gets abused eight ways to Sunday, as the average household is currently carrying credit card debt to the tune of over $10,000. Assuming an interest rate of 18%, this works out to about 150 bucks a month going to the credit card company. That's money NOT available for things like fresh flowers on your desk... new skis... upgrading to gourmet coffees and wines for daily consumption, or dinner out (including tips and babysitter). Debt Consolidation and Personal Finances: Learn the Truth! An inability to manage credit, growing debt and bankruptcy are all major problems today. On an average day, over 8,000 people file bankruptcy in the United States alone. The Internet is rife with companies that promise help and salvation; to the uninitiated, their words and assurances prey upon those wanting a painless solution. Establish Money Saving Goals For Added Success Having something tangible to strive towards can work wonders for your money-saving efforts. To those of you that have already been actively implementing money-saving tips in order to lower your monthly bills, for added inspiration, establish a meaningful goal along with a specific dollar amount. Debt Help and Advice for the UK At some time or another during our lives most of us will overspend and get into debt. Sometimes we can get our finances back on an even keel by cutting down on a few luxuries. Turning Bad Debts into Good Debts through Investing Fundamentals If you've ever earned enough money to put some aside, like most people you've probably invested it with an eye toward security ? since, perhaps, you can't imagine yourself ever getting rich. Life After Debt ? Strategies for Dealing with Problem Debt Honorably and ethically rid yourself of burdensome debts using the little known Negotiation Strategy, without having to experience the loss of control and privacy associated with filing for bankruptcy, consolidation, or credit counseling. How to Deal with Bill Collectors So you've screwed up. You're drowning in debt. Maybe the credit card was burning a hole in your pocket and you just had to get the HDTV. Or maybe you or a family member had a medical emergency while you we laid off. It doesn't matter to your creditors; they lent you the money and now they want it back. What Is A FICO Score? Your FICO score or credit score as it's commonly called is a very important calculation that can control whether or not you are eligible to receive credit and if eligible the terms you can receive credit under. Failure to understand the impact this score can have on you future purchasing power and lifestyle can be disastrous. This article will break down all the information you need to know regarding your FICO score.
|
|
|
|
|
