Personal Bankruptcy

According to the US constitution, you could relieve your debts partly or fully if you fail to meet your obligations to your creditors. There are two major types of personal Bankruptcy which can be applied to the consumers. These are Chapter 7 Bankruptcy and Chapter 13 bankruptcy.

What is Chapter 7 Bankruptcy?

All or some part of your debt are discharged under Chapter 7 Bankruptcy, when you use your liquid assets to repay some of your debt.

What is Liquid Asset?

You can make your liquid asset from your possessions. Your checking and savings accounts can quickly be converted into cash. Courts distribute your liquid assets among your creditors as a partial repayment. These are the type of assets which can not be used for the repayment to your creditors. These type of assets are called non-exempt assets. Your state recognizes which liquid assets come under exempt and which come under non-exempt. After that you neither will be liable for any discharge from debt any more nor your creditors will have the right to collect those debts from you.

How would you qualify?

You have to pass a means test where you will have to prove that your income is less than the required income for your family size in your state. If you pass, you will qualify but if you fail then you won’t be able to file Chapter 7. Then you can rather file Chapter 13. There you must get a credit counseling from any approved credit counseling agency.

What is Chapter 13 Bankruptcy?

According to Chapter 13 plan, you have to repay your debt totally or partly through a 3 - 5 year plan. While making the bankruptcy filing you also need to submit a repayment plan to the court. when you submit the plan, you need to start making payments to the court, then court will pay the amount to your creditors. After a few weeks, there would be a hearing in the court to approve the plans of your payment. Once your plan gets approved, you can start making payments to the court. Once you complete your chapter 13 repayment plan, you won’t be liable for any discharged debts any more.

Why would you file Personal Bankruptcy?

Personal bankruptcy laws are too complex. So it is better to have an advise from a bankruptcy attorney before you file for the bankruptcy. And this is the best way because they would settle your paper work accurately and completely

Avoid Credit Card Debt

Anybody who is having a Credit Card, always has the risk of getting himself involved in Credit Card debt. If something happens that then life becomes hell. So here I am going give you some tips regarding the good uses of your Credit Card to avoid any type of botheration.

1. Always maintain an emergency fund: This is the main reason of coming into debt. You should always maintain an alternative fund to avoid a sudden expense such as a medical fee or a major vehicle repair. If you don’t have such an option then you need to use your credit card and suddenly you find yourself into debt. an emergency fund helps you to avoid any kind harassment under such circumstances.

2. Use the card in limitations: You should never use your card to buy something which you can not afford. If you purchase only those things by card which you can purchase by cash too, then you will never involve yourself in debt.

3. Don’t transfer your balance: Don’t transfer your balance just to transfer. Do it only when you need it desperately like if you are getting low interest offer on a shopping by another card. Otherwise it will increase your balance due to transfer of money.

4. Make credit card payments on time: You should always make your credit card payments on time every month to avoid credit card debt. An on time payment will make you always feel happy. You won’t have to be worried about the problems and tensions of late payment or increment of debt.

5. Know the symptoms of credit card debt: You should always be well aware of the signs of debt. many people don’t realize when they have come into a debt. You are aware of the warnings of the credit card debt, then you would be able to avoid the debt.

6. Don’t hand over your card to others: This is the most important part of this article. You should never give your card to any body. They might say that they will make the payments of your card bill in lieu of the uses that they will make. But think for a while, if a credit card company does not give them a card then why do you give yours?

7. Don’t increase the no. of credit cards: It does not matter what command you have on yourself but the problem is, if you have some credit cards, you would not be able to keep the control on you. And the more number of cards you have, the more risk will be there to come into debt. So always have minimum number of cards to avoid any harassment.

Avoid Bankrutcy; Avoid Shame

I don’t think there should be any doubt to any one that what ever may be the suggestion or idea given, but going bankrupt is a real threat to all of us. It is a shame to all of us and that makes us more worried. But if we give a little bit of effort then we can avoid bankruptcy though it’s a debatable topic that whether it can be prevented or not. In many of the cases I have seen it getting worse.

We all know that we cannot take any actions against the debt collecting activity. The idea of bankruptcy is to keep away from a decision being obtained adjacent to the debtor demanding that they pay back the due balance in full. This helps the creditors to decorate the debtor’s pay. But it is the fact that if the debtor doesn’t have any thing to give not even a property then they become judgment attestation. In that case there is no option for the creditors to take any action as they know that nothing can be collected. I can suggest you this is a good option and perhaps the best situation otherwise you may perhaps discover that you are unexpectedly pursued in a more hands-on manner.

Debt management can be the other way out. This can be in various ways- a person can obtain the down to business move toward their returns and expenses and can recognize where they can cut expenses and boost profits, liberation up more cash to examine their arrears and get out of the swamp more rapidly. It is possible to discuss with your creditors to lower your monthly payments temporarily. Imagine if you don’t have to pay the interest rate then with every amount of money you are paying makes the sense of balance. This can only be achieved by some one by consulting with a debt management company, and it will recover your credit merit.