How to Avoid Bankruptcy With Debt Management

Debt is an every-increasing problem for millions of Americans. And getting into debt has never been easier. With extra home mortgages, high-interest loans, and numerous credit card offers, it’s no wonder so many people fall into debt.

Further, as the economy continues to be weak, many people find themselves unable to pay their bills and they file for bankruptcy.

Bankruptcy is perhaps the easiest way to find relief from unbearable amounts of debt; however, it can also come with severe consequences. Whenever possible, a person should take a variety of other measures before turning to bankruptcy for relief. Bankruptcy, first of all, prevents a person from obtaining any credit. People cannot file for loans, and if you want to buy a home, it takes two years before you can qualify for home loan.

If you file for bankruptcy, you may even lose your assets, including your home, cars, and property. And recovering from bankruptcy is a long, drawn-out process. For at least three years, part of your income must go to pay your creditors, and you will have a blight on your credit report for seven to ten years. So even when you do qualify for credit again, it can still be difficult to purchase a loan or mortgage. And even if you are able to successfully take out a loan, your former bankruptcy means that you will have to pay higher interest rates than you would have had to otherwise.

Bankruptcy also makes it more difficult to save for things that are really important, including children’s education and retirement.

Bankruptcy can even damage future career opportunities. By filing for a bankruptcy a person becomes ineligible to become a director of a business or to hold other community and professional offices. Further, other people’s trust and confidence in you could be damaged, making it difficult to progress in your career.

Of course, sometimes bankruptcy is the only option available to some people in excessive debt. But it should not be seen as an easy way out. The consequences are anything but easy to deal with; rather, bankruptcy should be viewed as a last resort. The trick is to not let your debts become so unmanageable that bankruptcy becomes your only option.

If you find yourself falling further into debt, stop and take action now to better manage your debts. The following paragraphs include a few suggestions for those in debt on how to avoid bankruptcy and better manage your finances.

Of course, the first thing you need to do when managing debt is to stop purchasing things on credit. Further, if you have services or products you can live without, do so. Downgrade your car or cell phone plan. These products and services may seem like necessities, but once you’ve managed your debt, you will be able to have these things again, and this time without worry or stress about debt.

The best program for helping people get out of debt is an accelerated debt reduction plan. With an accelerated reduction plan, you organize all of your debts and make the minimum payment on all of them except one. You completely pay off one of your debts, usually the smallest one, by paying more money on it each month. When you’ve paid off that one debt, you move on to the next one, adding the money you were using to pay off the first one to the second one. And the cycle continues. Near the end, you should be paying a good chunk of money on just one debt until you become completely debt free. Accelerated debt reduction plans have been proven to be extremely effective behaviorally and are probably the best programs to implement when managing your debt.

When paying off your debts, many financial advisors suggest that you pay off the higher interest debts first. That way you spend less money on interest fees in the long run. Also, don’t borrow money for short-term purchases. Not only can small loans lead to major interest fees, but they also encourage the mentality that borrowing money for anything is acceptable when it is not.

Debt consolidation plans can also be effective if used properly. If you decided to consolidate your debts, you should make sure that all of your debts aren’t just swept into one big pile, and that you really are reducing your interest rates and number of payments.

Sticking to debt management plans can be difficult, and it’s easy to falter every once in a while and splurge on something you shouldn’t. Debt management takes discipline and motivation, and sometimes people need a support group to help them to stick to their debt management goals. Which is why Christian debt management services are often helpful. Aside from providing financial advice and helping clients develop a debt management plan that’s right for them, a Christian debt management service can also provide the extra bit of motivation a person needs to stick to his or her debt management goals.

Motivation is provided by structuring the debt management plan around common beliefs–in this case, Christian beliefs.

As debt is clearly taught against in the Bible, Christian debt management services will often provide daily reminders that help people keep their focus on the big picture. Their staff members will also help counsel, guide, and advise their clients according to the tenets of their beliefs. Of course, Christian debt management services are only one type of specialized debt management service, albeit the most popular. Finding support groups for people who are also trying to manage their debt wisely is another option to help you find the motivation you need to stick to your goals.

Chapter 13 Bankruptcy and Mandatory Counseling Courses

Generally Bankruptcy Lawyers are flooded with questions related to the two mandatory credit counseling courses and different aspects related to them. In order to answer questions like ‘when are these courses required? How much do they cost? Why are there two courses? How long do the courses take?’ and many others we provide you guide to the basics of these courses. As part of Personal Bankruptcy filing procedure, one needs to take up two basic courses.

1. Pre Bankruptcy Credit Counseling Course

This a preliminary course that any individual filing for either Chapter 7 or Chapter 13 Bankruptcy needs to undertake. This course is very important because the certification that you receive at the end of this course is part of the formal documentation procedure. This also requires that pre filing counselors are approved by trustee and they would evaluate your financial situation, consumer debts, help you in budgeting, might refer you to a debt management agency. In short your counselor would plan a long term plan for your financial activities. Such a course lasts for 60 to 90 minutes and can be done in person or by any other means of communication and it generally costs around $35 to $50.

2. Pre Discharge Financial Management Course

This course happens once your Business Bankruptcy receives formal order of discharge from the court. The order of discharge terminates your obligation to pay the debts but for that you have to undergo a financial management education course. This course is conducted by a financial management counselor who is approved by the trustee. He would educate you in financial management and related aspects such as developing a budget and living within it, developing better spending techniques, learning saving, budgeting and checkbook control as well as wise use of credit. This is done about in two hours at cost of $35 to $ 50.

If you have always wanted to know what is Chapter 7 Bankruptcy? Then here is your chance to understand that and much more about the credit counseling course and financial management course that one need to undergo for filing a bankruptcy application. Both these courses are aimed at educating you in basics of financial bankruptcy and credit and finance management. With two hours and at a mere cost of $35 to $50, these courses acquaint you in different aspects of long term plan for your financial activities as well as wise use of credit.

Personal Debt Management: Let Help, Help You!

While a wedding needs a wedding planner to ensure that right things happen in the right place and at the right time, official establishments need specialised managers for every department and in the same way a child needs the right guidance from his/her parents. Now, let’s relate this to our financial lifestyles… Making money and spending it requires no assistance, of course, but it’s the payment of borrowed or owed money that can very often get out of hand. This is where you need that special assistance and better organisation and management of your diminishing financial resources.

Whether its small borrowed amounts, pending departmental store bills, credit card dues or outstanding loan repayments, the bottom line is that they all need to be repaid. Most often the management of payments of various kinds, of different amounts, made out to different people, all arising at the same time can get not only unmanageable but also impossible. It’s at times like these that we need to ask for necessary assistance via Personal Debt Management.

Personal Debt Management is a financial solution essential to pull you out of surmounting debt situations when all you can do yourself is fall further into it. It is your only alternative to filing for bankruptcy and getting stuck with a negative credit score. The objective of Personal Debt Management is to manage your finances and help you stay out of debt for a long long time.

Personal Debt Management involves practices like Debt Consolidation, Debt negotiation, Credit counselling and finally debt elimination.
Debt consolidation merges all your outstanding bills, loans and other payments into one large amount, which is repaid in one go by taking a Debt Consolidation Loan. Consolidation instantly relieves you of all your pending payments and also liberates you from dealing with your previous lenders. All you have to do now is repay your consolidation loan – which means one single payment, at a lower rate of interest, to one creditor alone, making your financial state of affairs less complicated, cheap and manageable.

Debt Negotiation involves reducing your overall debt through an informal negotiation with your prior lenders – either by lowering interest, reducing your principle amount, extending your loan term or a blend of all these.

Credit counselling is a process in which the Personal Debt Management agent works with you to keep debt at a distance in the future. A Personal Debt Management agent studies your financial situation, i.e. your income, expenses, dues, etc. He/she will also chalk out a strict budget for you to prevent unnecessary expenses. Credit card accounts are usually closed during credit counselling to avoid any temptation to spend. Remember that only genuine Personal Debt Management agencies will offer credit counselling because it shows their effort to prevent debt even in the future. An agency that doesn’t offer it only wants you to come back to them from time and again.

When looking for someone to help you with Personal Debt Management; looking online is your best bet because of the time you save, the larger number of Personal Debt Management agencies you can contact and the detailed information you can acquire from any agency. Looking for a non-profit Personal Debt Management organisation is also a good solution.

Remember, it’s your debt and your money – nobody should be more concerned than you. So take your time and help yourself to get the best Personal Debt Management solution to help you!!!