Bankruptcy Filings Increase As Economy Suffers

Layoffs and pay cuts moved more people into bankruptcy last year, and researchers are asserting that the situation is most likely not going to improve until the unemployment issue improves. In Wisconsin, bankruptcy filings rose 30 percent in 2009. This came on top of a 35 percent increase in the preceding year.

According to bankruptcy lawyers, it is not just firings and layoffs that are motivation to file. It’s the losses of once-regular over time pay and full time status that have left consumers from keeping up with monthly payments that in the past were not an issue to pay.

U.S. Bankruptcy Court records reveal that there were 27,413 bankruptcy petitions filed in Wisconsin last year. More than 80% were Chapter 7 cases. Chapter 7 cases wipe out medical bills, credit card balances, and other types of debt. Recent Research by The Associated Press illustrated that more than 1.4 million bankruptcies were filed in 2009, an increase of about 32% from 2008.

And although bankruptcy annihilates the looming debt and offers consumers a fresh financial start, people often remain unemployed and are unable to find employment to get an adequate income again.

Worse still, unless the economy improves enough for companies to start hiring, there is little reason to think that bankruptcies will go down in 2010. Experts have noted that home foreclosures will continue to pile up in 2010 because people who previously had adequate credit have lost employment and cannot keep up with payments.

Bankruptcy may seem like a good option to get a fresh start, but it negatively affects your credit report for ten years, rendering you unable to get a car, place of residence, or employment. Before declaring bankruptcy, it is a wise decision to speak with your creditors and see if some sort of repayment plan can be worked out.

Mallory Megan is an employee at a debt collection agency. She also does articles on the credit industry, business, finance, and debt collection.

Can I Avoid a Judgment?

The last resort for a creditor to obtain payment from a debtor is to try to obtain a court judgment. You actually agree to this when you take out a loan or apply for a credit card. The fine print in the document states that you agree to be sued if you don’t make your payments each month.

The main goal in a creditor’s lawsuit is to prove that you actually owe the debt. It is smart, if you really do owe the debt, to attempt to resolve any pending legal action quickly. It is often that a creditor may prefer a settlement to continuing with a legal action. To show good faith, it is helpful if you can provide an up-front partial cash payment.

You will want to know if the statute of limitations is still in effect. If not, the debt is no longer legally collectible. However, it is important to understand that the payment of even a small amount will reinstate your obligation to pay.

If the matter is being handled by an attorney for the creditor, consider calling the attorney and making an offer. No matter what you decide to offer, the attorney is bound legally to discuss your offer with the creditor.

You should do what you can to avoid going to court. Also, keep in mind that a settlement is always better than a court judgment. If your creditor is able to obtain a judgment, your credit report will reflect the judgment and the entry can remain on your credit report for up to ten years.

SHOW UP if you are forced to go to court! Many people who cannot reach a settlement with their creditor make the error of not attending the hearing. This, in turn, means that the creditor will be granted the judgment by default!

It is important to note that if you do appear, you should be prepared to present a defense and work toward a resolution of the matter. You will earn the respect of the judge and plaintiff creditor by doing so. This will require that you present a defense on your behalf.

You will receive a notice of judgment if the creditor is successful in his suit. The judgment will allow you 30 days in which to pay the debt in full. After the 30 days has run and if you still have not paid the debt, there are additional legal actions which the creditor may take. For instance, the creditor may be allowed to place a lien against your home or property. If a lien is placed against your home, the lien will have to be paid in full prior to the sale or refinance of your home.

The garnishment of wages is another legal remedy which is allowed in some states. Additionally, sometimes creditors are allowed to seize personal property to collect the debt.

The result of a judgment on your credit score will be far-reaching. Besides a loss of borrowing power, other areas of your life can be adversely affected. For instance, your chances of promotion or a new job opportunity may not materialize! It is wise to avoid a judgment at all costs.

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Bankruptcies Up In 2009

In this period of increased unemployment rates and home foreclosures, personal bankruptcy rates continue to increase. Last year, it has been reported, personal bankruptcies increased by over thirty percentage points. As more and more Americans face the financial realities brought on by our current economic situation, it is expected that bankruptcy filings will continue to increase.

In 2009, the U.S. saw the total number of filings pass 1.4 million. With last year’s filing increase, the total filing number was higher than it has been since 2005, the year the government significantly changed the bankruptcy laws in an attempt to drastically reduce the number of filings. The 2009 filing numbers are over double the numbers we saw in the year 2007.

Filings allowing debtors to liquidate assets to pay some debt and erase portions of debt, also known as Chapter 7 bankruptcies, increased by over forty percent by November. This is the latest data for such filings.

In addition to Chapter 7 increases, Chapter 13 filings are also on the rise. While Chapter 13 filings didn’t rise at the same rate as Chapter 7′s, they did increase by over 10%. These filings constitute less than 1/3 of the total filings.

Nevada and California each saw some of the highest increases in filings. However, no state surpassed Arizona which saw increases in filings of about 80%. While those states saw large filing increases, states like Pennsylvania and Tennessee saw much more limited increases with filings ranging between ten and fifteen percent.

As the national rate of unemployment continues to loom over ten percent, many citizens that had been financially secure are now in a position that bankruptcy makes more sense. Coupled with the decreased housing market, it is no surprise that many individuals are now strongly taking filing bankruptcy into consideration.

As bankruptcy filings continue to rise, it is become more common for Americans to know someone who has either filed or is considering filing for bankruptcy.

When you are facing creditor harassment, wage garnishment, or foreclosure, finding out your options needs to be your top priority. People often feel helpless when they find themselves in financial situations like this. Get a free bankruptcy consultation fromBankruptcy Attorney Massachusetts Matt Desrochers.

Removing Negative Entries From Your Credit Report

Whenever a consumer misses required monthly payments or defaults on a loan, a negative entry detailing this information will appear on his credit report. The process of removing negative entries such as these is called “credit repair.”

There are many significant ways in which these negative entries can affect you. These negative entries will make it harder to be approved for any credit products, such as home loans and credit cards. You can be assured that the financial products for which you are approved will include a high annual percentage rate (APR) and associated monthly and annual fees and charges.

If this is the dilemma in which you find yourself, don’t despair! There are a multitude of online companies which, for a fee, will work to rebuild your credit. However, if you don’t want to pay the fee associated with these companies, you can venture into credit repair yourself.

You must first obtain a copy of your credit report, which may be done by contacting the three major credit reporting agencies – Equifax, Experian, and TransUnion – and requesting a copy of your credit report. These three credit reporting bureaus are legally bound to provide one free copy of your credit report every twelve months. You can call (877) 322-8228 to obtain your free copy of your credit report. Alternately, you can request a copy of your credit report from the many online companies which offer this service.

Sit down and review your credit report once it arrives. All information should be carefully reviewed to confirm that all portions of the credit history are accurate. Do not skip over personal and employment information. Check everything!

A dispute letter should be written to the credit reporting agency if you find any false or inaccurate information. Your dispute letter should explain the reason you are writing and you should include any supporting documentation you may have. Retain copies of all correspondence and documentation to and from the credit reporting agency.

After receiving your dispute letter, the credit reporting agency has 30 days to verify your claim. The credit reporting agency must remove the entry if it cannot verify the claim within this time period. You should receive a letter from the credit reporting agency outlining the actions taken related to your credit report. If the credit reporting agency does not revise a negative or false entry, you should write a letter to the credit reporting agency requesting an explanation of how they came to this decision. When this is done, it is referred to as requesting a “method of verification.”

It is beneficial to follow this process in order to improve your credit, even though it may be time-consuming. By doing this, you will improve your credit score and improving your credit score will, in turn, lead to better opportunities for more desirable financial products.

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Filing For Personal Bankruptcy: What It All Means

There are two main types of personal bankruptcy you can file for, Chapter 13 and Chapter 7. You might be in a position where you owe people money, your bills keep piling up, you credit is maxed out and you can’t see the light at the end of the tunnel. Understanding the types of bankruptcy that exist is a good first step in exploring this option for yourself.

An individual filing for bankruptcy will file either Chapter 7 or Chapter 13. Chapter 13 involves working out a payment plan with your creditors to pay back the debt you owe. In Chapter 7 bankruptcy, you will sell your property, that is not exempt, to pay back your creditors. After speaking with a bankruptcy attorney, you can decide which type will be the best for your situation.

Chapter 7 bankruptcy is also known as liquidation or a straight bankruptcy. Chapter 7 Bankruptcy is the most common form of bankruptcy accounting for almost two-thirds of all consumer filings. This is one of the faster ways for you to start fresh. The case usually lasts for only a few months after an attorney make the initial filing.

You should consider Chapter 7 bankruptcy if you are in a position to sell your nonexempt property and use the proceeds to pay your creditors. Of course, you want to make sure that you will have property left over after paying your debts to start fresh with a good foundation. Speaking with a bankruptcy attorney about this option is a great idea.

Chapter 13 bankruptcy is a way of working out a repayment plan to pay off your creditors. You are going to be restructuring your debts. Chapter 13 might be a good fit for you if you own valuable property or make too much money to be eligible for a Chapter 7 filing. Often when you file for Chapter 13 bankruptcy, debts and interest accruing will be reduced. A repayment plan is established usually in the 3-5 year range.

If you are currently making money, but are not in a position to pay of your debt immediately, you should consider Chapter 13. Speaking with a bankruptcy lawyer will ensure you take the right path with your bankruptcy filing.

After reading this article, you should have a better conception of what bankruptcy entails and your various options available. The next step is to speak to a MA bankruptcy attorney to see what type of filing is the best fit for your situation.

People often feel nervous when they find themselves in financial situations like these. Speak with Matt Desrochers & Associates, MA bankruptcy attorneys. Bankruptcy is not something to take lightly, but it is not as scary as you might think.

Negotiating With Credit Card Collection Agencies

Collection agencies devoted to credit card collections have in recent times become busier and busier. This is because more and more people are having trouble keeping up with their bills.

Typically, the problem begins with one missed payment. This missed payment will likely mean that you are assessed a late penalty, which in turn might mean that you exceed your credit limit. When this happens you are assessed another penalty because of credit limit overages. Now, you may be $100 or so over your credit limit and you still haven’t paid your monthly minimum payment.

Before things get worse, it is best to contact your credit card provider and explain your situation. Most credit card providers are willing to work with you. It is best to put a stop to things at this point instead of letting things get out-of-hand, resulting in the credit card provider selling your debt to a credit card collection agency.

Debt sold to a credit card collection agency will normally be purchased at a fraction of what you actually owe, typically for cents on the dollar. As credit card collection agencies make their bread and butter from collecting as much as possible from those who owe debt which they have subsequently purchased, they may at times be harassing and even threaten legal action.

In reality, most credit card collection agencies would prefer to work with you to obtain payment of the debt than to launch a legal action which will be time-consuming and costly. If at all possible, this would be a good time to offer to pay the debt in full at a reduced amount. Make sure that the resulting agreement is in writing, that you retain copies of all the negotiation documentation, and mail all correspondence to the credit card collection agency by certified mail, return receipt requested.

Typically, it is a good idea to begin the negotiation somewhere around 25% of the original balance. Though this sounds low, remember that the collection company probably purchased your entire debt at only about 10% of the original amount. It is likely that the collection company will decline this offer and will issue a counteroffer, which you then should counter as well. This will continue until you either come to an agreement or the negotiations discontinue.

If no agreement is reached, the credit card collection agency may lose the momentum for collecting your debt. It may determine that collecting a smaller amount is better than nothing at all. It may also decide that selling the debt to another credit card collection agency is a better idea. If this happens, the process will begin yet again and run its course.

It is good to remember that at any point in this process, beginning with the credit card provider itself, a legal action could be filed against you. Additionally, your credit score is continually and quickly decreasing. A court judgment will annihilate your credit score even more.

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How Can I Remove Late Payments From My Credit Report?

For many people it is becoming increasingly difficult to meet all of their financial obligations. Each month that a consumer is late on a bill, the creditor reports this information to the credit reporting agencies. The credit reporting agencies then take this information and include it on your credit report. When a lender requests a copy of your credit report, all of your late payment entries will be reported for the lender to view.

Payments received after the due date are considered late, regardless of “how late” they may have been. If your payment was received the day after the due date or 30 days following the due date, it is still late. Most creditors however will not report a late payment until it is actually 30 days past the due date. But, if your payment is past the due date, you will probably find yourself with a hefty late payment penalty.

To begin the process of removing late penalties from your credit report, you will need to request a copy of your credit report. This is easily done by getting in touch with one of the three major credit reporting agencies – TransUnion, Equifax, and Experian. You have the right to obtain one free copy of your credit report from these credit reporting agencies every twelve months.

Although the same kinds of information are reported on credit reports, the layout may be somewhat different. As you review your credit report, it should be fairly simple to determine how the credit reporting agency has reported late payments. In addition, the number of late payments you have made within a specific time period should also be shown on your credit report.

Although consumers understand that making late payments is not a good thing, they normally don’t understand the far-reaching consequences. Payment punctuality can count for over 30% of your total credit score. Because of this, late payments can severely affect credit applications which you submit to a lender.

The first thing you can try in order to remove late payments from your credit report is to contact the creditor directly and ask that it remove the late payments. This is often successful, however, if you habitually make late payments, it may be less likely.

If your creditor is unwilling to remove the late payments, you should contact the credit reporting agency by mail and request that they remove the late payments. Your letter should include copies of any supporting documentation that you have which corroborates your claim. You should always retain copies of any correspondence to or from the credit reporting agency. The credit reporting bureau has 30 days to verify your claim. If it cannot verify your claim within 30 days, it must remove the late payment from your credit report.

If at all possible, it is smart to keep this from happening in the first place. If you know you will be unable to make a payment on time, make a call to your creditor and explain your situation. It is often the case that creditors are more than happy to help you out by arranging a payment plan.

Did you know that late payments can be shown on your credit report for up to seven years? It’s true! This, of course, can severely damage your credit score and can cause you to be denied credit. Try to avoid late payments on your credit report by working with your creditor if you feel you will be late. You will be happy you did!

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Second Chance Bank Accounts

People who have or are, for various reasons, facing financial difficulties and have had their bank account suspended or closed should look into a second chance bank account. Another name for second chance bank accounts is non-ChexSystems checking accounts.

Any type of financial misdemeanor will place the account holder at risk of being included in ChexSystems. About 80% of the country’s banks utilize ChexSystems which is a consumer reporting agency and check verification service. This company records information about a consumer whenever a check is bounced, the overdraft limit is exceeded, or a payment is not honored.

If you habitually perform any or all of these actions, you will likely be reported to ChexSystems and will be entered into ChexSystems reporting system. This may cause your bank account to be closed. If this occurs, it may be extremely difficult to open a new bank account.

Second chance bank accounts allow you a chance to get things back under control. These checking accounts operate like standard bank accounts in that you can access your money and pay your bills. For people whose bank accounts have been closed, these second chance bank accounts offer a needed opportunity to start over again.

Second chance bank accounts are offered by a variety of banks and finance companies. Some online companies even offer this type of checking account. To apply, you will need to complete an application. You will also need to provide personal information such as a current address and proof of identity, all of which will be verified.

Before you do this, it is a good idea to get a copy of your ChexSystems report. You should review the report for any inaccurate or false information. If the report contains any information which is false or inaccurate, the information can be revised or deleted. It may well be that this false information is what is keeping you from being able to obtain a checking account in the first place.

However, if all the information is accurate, then a second chance bank account is likely the next step to take. These accounts are easy to open and are recommended for people who need a second chance.

Be sure to shop around prior to applying for a second chance bank account. Sometimes, companies will charge monthly or annual fees in addition to one-time payments to open the account. Therefore, be smart, shop the market, and get the best deal you can.

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Obtain Your Credit Report Today

Requesting a copy of your credit report is easy and is the first step toward rebuilding your credit. Read on to find out how to obtain a copy of your credit report and to learn some of the benefits of reviewing your credit history.

A credit report will help you rebuild your credit and this is the most common reason people request a copy of their credit report. A person’s financial history is listed in its entirety on their credit report. The entries will include identifying information, payment history, and credit accounts. A quick review of your credit report will let you know if all of the information recorded is accurate or if there are some inaccurate or false entries. Any inaccurate or false information listed has already affected your credit score.

You can dispute any inaccurate or false information you discover on your credit report. To do so, you will need to send a dispute letter to the credit bureau requesting the correction of the disputed item. The credit bureau then has 30 days to obtain verification of the recorded information. If the credit bureau does not receive verification of the disputed entry, it must delete the entry in its entirety. If this happens, your credit score should increase.

Credit reports are also helpful for finance and budgeting purposes. Obtaining your credit report allows you to view your credit status in one neat, concise report. A credit report can allow you to determine if you should work to consolidate your debt and can assist with prioritization of payments.

Identity theft is another reason for requesting a copy of your credit report. By obtaining a copy of your credit report you will be able to compare your knowledge of your recent credit transactions against what has been reported to the credit reporting agency. Identity theft is a very real concern and threatens a person’s credit worthiness in addition to their financial situation.

Your credit report can be obtained several different ways. There are internet companies that offer copies of credit reports and you can contact one of these companies. Alternately, you can contact one of the three major reporting agencies – TransUnion, Experian, and Equifax – for a copy of your credit report. Pursuant to Federal law, these major credit reporting agencies are required to provide you with a copy of your credit report, free of charge, once every twelve months. To request a copy of your free credit report, you can call Annual Credit Report at (877) 322-8228.

It is wise to obtain a copy of your credit report. Request yours today and when it arrives, sit down and review it for any inaccuracies so you can begin to rebuild your credit.

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Stress From Bankruptcy – It Is Not Just About Money

Stress from bankruptcy is overwhelming for most people. Going through the ordeal of bankruptcy can take its toll on your mind. Shame, depression and strained relations are not easy to manage. Going through bankruptcy can also cause tension within your family, social life and profession. Managing the stress from all directions is not an easy affair for anyone.

However, bankruptcy can become inevitable if you are buried under tremendous debt. If it becomes seemingly impossible to repay loans and debt, there are several things you can do to avoid the ordeal. Even so, you should explore all your options including credit counseling and alternative repayment plans before taking the bankruptcy route. If you can’t find a way out and bankruptcy is inevitable, you must acknowledge the prospects and prepare yourself to face the stress that results from bankruptcy.

Since bankruptcy will not eliminate all debts, dealing with the fallout of bankruptcy often proves difficult and never-ending. Since bankruptcy gets recorded on your credit history for a period of up to ten years, it is not only nearly impossible to obtain credit, but potential employers are likely to conduct a background check before extending a job offer that can have a long-term, positive impact on your financial status. With a bankruptcy, securing that better job might become impossible.

If you are looking for ways to manage post-bankruptcy stress, there are a few things you should do. First, allow yourself to accept that you are experiencing stress and that, sometimes, severe stress requires medical assistance in order to be dealt with.

The next step is to communicate your financial conditions with people in your family and immediate circle of friends. Sometimes they may be able to help or provide emotional support. Talking about it will also help you better manage your mental state. If you can’t talk to your spouse or friends, a counselor can always be found (for a fee) and you can talk to your heart’s content. Point is, talk about it as this will help you rationalize the decision.

You also need to put together a sound financial plan. After obtaining your bankruptcy discharge, be thankful for the fresh start you have been offered. And put together a plan that will allow you to absorb financial difficulties should they arise again in the future.

Now that the financial side has been dealt with, arrange the non-finance areas in your life so that you are better able to deal with the stress. That might mean eating healthy and leading an active lifestyle. Even reading motivational books and hanging around positive people can help.

In most cases, bankruptcy occurs due to avoidable circumstances. Only in some cases are the circumstances are beyond your control, but that is not something that can be changed following the discharge. With a go-forward attitude, you will realize that there is no point in blaming yourself or feeling guilty. Try your best to relax and to enjoy activities that you like now that you do not have bill collectors calling at all hours.

As a financial services professional with more than 16 years of experience, Chris has established an informational website that touches on Interest Only Refinance Options. The website can be found at www.HomeEquityLoan Site.org.

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