by Carl Hampton

Having a hard time paying your bills? Do they seem like they just keep adding up? A lot of people in this situation think that filing for bankruptcy is the easy way out. In all reality, bankruptcy should be your very last resort. Most people do not understand the long term effects of this course of action they are also unaware that there is a very extensive process that happens before and after you file for bankruptcy.

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 states that people who plan to file for bankruptcy protection are now required to receive counseling from an agency that is government approved within a six month period before filing. After filing bankruptcy a debtors education course must be completed. The Department of Justice has a U.S Trustee Program wherein only counselors and educators that appear on the program’s list can counsel you. By law the U.S. Trustees Program cannot operate in Alabama and North Carolina because they have what are referred to as Bankruptcy Administrators.

The credit counseling and debtor education might not take place at the same time. But it is necessary to complete both for those who are filing for bankruptcy. The counseling must take place before filing, a certificate of credit counseling completion must be attained when filing for bankruptcy. The debtor education program normally takes place after the filing. More

by Andi Wize

Bankruptcy is a process of the federal court that is aimed at helping both businesses and individuals in clearing up their debts and repaying under the protection given by the bankruptcy court. There are basically two types: liquidation and reorganization.

Liquidation bankruptcy, under bankruptcy code chapter 7, occurs when you plead the court to have your debts discharged. Some of your properties will then be liquidated or sold by the bankruptcy court, returns of which shall be divided among your creditors. This type of bankruptcy proceeding lasts for four to six months which is quite fast and only one appearance at the courthouse is necessary. It is very convenient and doesn’t require payments stretched over time.

Chapter 7 bankruptcy code isn’t available to everyone, though. You may won’t benefit from it if in the past six to eight years, you have benefited from a bankruptcy discharge. Likewise, if after examination of your income, expenses, and overall debt, it was found out that the other type of bankruptcy proceeding is more appropriate, then you can’t insist on pursuing this kind. Veterans who are now disabled and who incurred their debt at the time of their active duty are almost automatically allowed to file. In addition, those people whose debts are caused by running a business are qualified as well. For those people not belonging to any of these categories, certain criteria must be met. More

By: Naima Wilson

Often when a consumer is up to their ears in debt and toying with the idea of filing for bankruptcy, but either can’t file or doesn’t want to, there are other options. Were you aware that the consumer can negotiate with their creditors and end up paying a significantly smaller amount than what is owed?

Depending on many factors, a consumer can negotiate their debt down. Some of the factors include the age of the debt, the date a payment on the debt was last paid and the amount of interest and fees that have been added to the debt owed. Sound interesting? Read on it gets better.

Before going any further it is important to mention that this path is not easy, creditors are often not nice to deal with at the best of times. When you are the object of their attention, you can be inundated with rude and threatening phone calls, nasty letters and many other tasteless tactics used by some companies to get money out of you. More

by: Kevin Chern, J.D.

It’s true that most lenders will see you as a credit risk immediately after bankruptcy, but that doesn’t mean you won’t be able to buy a home. Home loans are somewhat less risky for lenders than unsecured loans (like credit cards or personal signature loans) because the lender will have your home as security.

Even so, every reputable lender wants to be able to expect that a loan will be repaid as scheduled. Fortunately, your credit score is based more heavily on your recent track record than the more distant past. That means that if you can start rebuilding your credit quickly after bankruptcy, control your expenses, and start showing a strong payment history, you won’t look like such a risk to those creditors.

Some studies suggest that within 18-24 months after a bankruptcy discharge, you can qualify for a loan on the same terms you would have received if you had not filed bankruptcy. In other words, most lenders will be much more interested in your down payment, the stability of your income, and the relationship between the loan payments and your monthly income than in your past financial troubles.

In shopping for a home, here are some general rules you should follow:

• Shop around for everything as carefully as you do for the house itself. Your home is likely to be the largest investment you’ll ever make, so it pays to be a smart shopper. Comparison shop for your mortgage and your real estate broker as well as your home. And don’t base your decision solely on the interest rate: factors like the amount of the down payment, the length of the loan, insurance requirements, and associated costs and fees can be just as important.
• Use a mortgage broker–an independent contractor who works with several different lenders to find the best loan for you. A mortgage broker has two important things that you may not: professional expertise and direct access to hundreds of loan products. That means a mortgage broker can help you find the most efficient and cost-effective method of financing for you. Mortgage brokers have also pioneered the “subprime” credit market, using innovative loan programs to allow borrowers who have previously filed for bankruptcy to start enjoying the benefits of home ownership.
• Look for cash-back deals. Despite what you may have heard, real estate brokers’ commissions are not set in stone. The real estate brokerage industry is competitive, and many brokers and real estate web sites offer cash-back or rebate programs if you agree to work with their preferred real estate agents. You may be able to save thousands of dollars on commissions with these programs.

If you’ve filed bankruptcy and you want to purchase a home, the bottom line is that you have to do your homework. That means rebuilding your credit, but it also means taking the time to research your options and get the best loan and the best terms for your particular situation. If you make that investment, you may be pleasantly surprised with your ability to buy the home you want after bankruptcy.

About The AuthorAttorney Kevin Chern is President of Total Bankruptcy and former managing partner of the largest consumer bankruptcy law firm in the United States. His book, “Life After Bankruptcy,” shows former debtors how to preserve their “fresh start” after bankruptcy. Visit www.totalbankruptcy.com for more free bankruptcy law resources, news, and articles.

(C) 2006, Total Bankruptcy, Inc.

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