Bankruptcy is a debt solution designed to help seriously struggling borrowers who simply can’t afford to repay their unsecured debts in the foreseeable future – and need to find a way of tackling the problem.

Bankruptcy can really help some people in serious difficulties with their finances, and take a lot of pressure off their situation. Having said that, bankruptcy also comes with some real negatives, which will have a serious impact on the borrower.

If you’re a Scottish resident potentially facing bankruptcy, it’s important to be aware of what effects bankruptcy will have on you – on your credit rating, for example.

How does bankruptcy work?

If you have a significant amount of unsecured debt that you’ve lost control of, and there’s no way you can pay back what you owe, bankruptcy may be the most suitable approach to the problem. 

Your lenders may decide to try and make you bankrupt if they believe it’s the best way of getting back at least some of what you owe them. 

You may be able to make yourself bankrupt if you owe at least £1,500 and either:

• One of your lenders is prepared to agree to you making yourself bankrupt, or
• You are ‘apparently insolvent’, meaning you can’t repay your debts ‘as they become due’. (One of your lenders must have gone to the court to obtain a ruling that you owe them money.)

There will be an application fee of £100, payable to the Accountant in Bankruptcy (Scotland’s Insolvency Service).

Debt Advisory Centre Scotland offer bankruptcy advice, so don’t hesitate to give us a call on 0141 305 3020 and speak to one of our helpful debt advisers, or just fill in the form on this page and we’ll phone you. 
Bankruptcy is legally binding, so you’ll have to go through the courts, but if your bankruptcy is approved, your lenders won’t be able to take any more action against you. Any valuables you have may be sold to help repay your lenders, and if you’re a homeowner your home could also be sold too.

Bankruptcy normally lasts for a period of 12 months. On successful completion, any remaining unsecured debt will be written off, although you may be required to make payments towards your debts for up to three years if you can afford it.

Being declared bankrupt can have other consequences too – such as stopping you working in certain professions. Your details will also be published in the Edinburgh Gazette.

How will bankruptcy affect my credit rating?

Bankruptcy will have a big impact on your credit rating. It will show up on your credit record for six years, which means you may struggle to get a standard bank account as a result. Moreover, banks and other lenders are more likely to turn you down if you try to borrow more money during this period.

When it comes to finances and debt management, a good credit is synonymous with a good name. It establishes confidence and trust upon a debtor’s willingness, sincerity and capacity to fulfill obligations at stated times. For creditors, this person’s credit is the essential factor that will guide them in the assessment and approval of loan applications that may be filed before them. To improve, or even simply maintain, a person’s credit, the engagement of professionals engaged in debt counseling is often beneficial.

Debt counseling involves relations between finance professionals and debtors in order to arrive at a sound and comprehensive program that can aid the latter in the management of debts. Under this scheme, the debt counselor helps a client identify key factors that may improve or ruin a credit, such as sources of income, spending habits, attitude towards savings, and the will to meet financial obligations as they fall due. Since overspending of an individual is often the principal factor that leads to failure to pay personal debts, the debt counselor may also assist a client in the formulation of a financial budget to faithfully observe. A person who is able to maintain expenses in accordance with set budget gets the lesser risk to default in the payment of obligations, resulting in an improved credit that is favorable for future transactions.

Given the numerous individuals, agencies and organizations offering debt counseling services, a person must be prudent and exacting in choosing the counselor to engage. Prospective clients need to carefully assess the debt counselor’s work experience, program success rates and sincere desire to be of service. It is also important that the client is comfortable in communicating with the counselor, considering that a counselor must be able to obtain all the correct information from the client in order to come up with a program that can best improve the client’s credit.

For those persons whose credits might have already been blemished due to past records, debt counseling can also be of invaluable help. As part of a debt management program, able debt counselors present to their clients the different modes through which obligations that have already defaulted can be repaid. The options that are usually presented to the distressed debtors involve debt consolidation and participation in balance transfer programs.

The debtors are also taught of techniques on how to negotiate effectively with their creditors, including ways on how to ask for reduction of interest rates, waiver of charges and penalties, and even a restructuring of the loan by setting a longer period of time during which the obligation can be fully satisfied. Depending on the agreement between the debt counselor and the distressed client, the latter may even agree to be the one to directly transact with creditors for a possible debt settlement.

At the end of it all, what is most important is for the debtors to faithfully comply with the plans and their obligations resulting from their debt counseling sessions. Only through this determination can debtors eventually eliminate their debts and then regain their good credit.

The author gives advice when it comes to South African debt counselling. To read more visit bestdebtcounselling.co.za

More and more families and businesses are finding it hard to make their mortgage payments and pay their monthly bills. It can seem like you are trapped by debt and do not know how you will ever get back on track. Sometimes bankruptcy is the best option, but it does possess some disadvantages. It can substantially lower your credit rating for years and could require you to liquidize assets you desire to keep. If you are considering filing for bankruptcy, you should first become aware of the different alternatives that are available in the U.S. A skilled attorney could reduce your debt through debt negotiation, debt settlement, loan modification, loan audits, deed in lieu, or short sale.

Debt negotiation involves negotiating with your credit or loan company. Modifications to the terms or payments may be possible, but creditors are often unwilling to compromise. An aggressive bankruptcy attorney fighting for you could decrease your interest rate or principal. They could also negotiate a lump sum payment to the creditor that is considerably less than the original amount. Debt settlement is a form of debt relief that involves a lump sum being paid to your creditor rather than monthly payments. Creditors often accept this alternative because it guarantees they will receive repayment. This amount is sometimes as low as 20% of the original loan and thus is beneficial to the client and creditor.

Loan modification is one of the best ways a family of individual can avoid losing their home to foreclosure or bankruptcy. If you have defaulted on your payments, you may qualify to have your monthly repayment fee lowered as well as reducing your interest and principal. A loan audit is performed to investigate whether your loan provider violated the law in the funding of the loan. Sometimes loan fraud and predatory lending violations will be revealed. If your loan is found to be illegal, your foreclosure and mortgage payments will halt. You may even able to file a lawsuit against your loan provider so that you do not have to worry about foreclosure or bankruptcy.

Deed in lieu of foreclosure allows the homeowners to avoid bankruptcy by giving over ownership of their house to the loan provider. If your house is worth less than the amount due, an attorney can negotiate the amount to be forgiven. A short sale is similar in that the house is sold for a price less than the amount due. By talking to a Boston bankruptcy lawyer, you can discover what the best bankruptcy alternative for you is.

Patriot Bankruptcy is a full-service bankruptcy law firm located in Boston, Massachusetts. They have spent years helping individuals and businesses afflicted with financial troubles. They will meet you with an open ear and will patiently listen to what you have to say. They will then employ their knowledge and experience when developing an effective solution to your problem. They take pride in helping people make the right choices when it comes to bankruptcy or its alternatives. Your initial consultation is free, and you will have a lot to gain from their priceless insight. Start taking action now to improve your situation – contact a Boston bankruptcy lawyer from their firm at (888) 453-FILE!

If you are like so many other people today, you are burdened by high credit card account balances and minimum monthly payments that are becoming unmanageable. You know that there are debt relief services available, and yet you have never made a move to call for the assistance you need to get back on track. While each person has their own reasons for not reaching out and asking for the assistance that is available, many simply feel that the services are not worthy of their time, effort or money.

Why Use Relief Services

It is true that you very well could pay off your account balances on your own. Some people do manage to find a way to accomplish this lofty feat without help. Yet the fact is that you are still in debt, and your problem only seems to be getting worse – or at the very least, it doesn’t seem to be improving at all. These debt relief companies offer the help you need, and while they do charge fees, the fees are often well worth paying. Many people who seek such services receive assistance that sets them on a path to being debt-free within a few years, if not sooner. Can you do that on your own?

Making the Call

Making the decision to reach out and call for the help you need isn’t an easy one, but once you do it, you will find that you feel so much better about your situation. You do want to seek out the services of a reputable company, such as those who are a member in good standing with organizations like the Better Business Bureau, TASC, and other such organizations. Some to consider using include:

EagleOne Debt Solutions: This company is a member of reputable organizations and has no consumer complaints lobbied against it. You can call the toll-free number or visit the website to get started. Initially, you will provide basic information about your expenses, income, and current account balances and monthly payments. The information will be analyzed by a debt expert, and the expert will provide you with the best solution available to pay down your debt quickly. Often, this will include debt relief options like the negotiation of debt to reduce balances owed, debt consolidation, and more.

NationalRelief: This company also has no complaints filed against it and is a member in good standing of top trade associations. You can visit the company’s website at nationalrelief.com or call their number to speak with a debt expert over the phone. The initial step of credit counseling is similar to that at EagleOne, and this company also will advise you about your best options for paying your debts off quickly. Keep in mind that both companies offer competitive rates for their services

Lowermybills: Whether you make the decision to seek debt relief or not, this is a website that offers many financial benefits to you. It does offer you access to debt consolidation loan programs for the relief of debt, and it also can help you to lower your other monthly expenses like your cell phone and cable bills, your insurance premium, and more. It even offers you the ability to compare rates for home mortgages, auto loans, and more. By refinancing these loans or finding savings in other areas of your budget, you may be able to reduce your monthly expenses to free up cash to use to pay down your debts.

The fact is that these companies do offer solutions for your debt that can help you to pay your account balances off much more quickly than you are doing on your own. If you are sick and tired of being in debt, and if you feel like you are barely making a dent in that debt with your own efforts, take time to call for the assistance you need today.

Credit cards are a creature of convenience. Unfortunately, they are also a creature that can eat away at your finances if left untamed and can easily force hardworking families into bankruptcy. While many families survive on the short-term credit lines offered by these scavengers immediately prior to filing bankruptcy, section 523 of the Bankruptcy Code provides a mechanism for creditors to object to their debts being discharged in bankruptcy if the debtor charged $500 or more of luxury goods or services within 90 days of filing.

The debt is considered fraudulent under the theory that the debtor charged an item on the credit card without an actual intent to repay the charge. If you plan to file either Chapter 7 or Chapter 13 (or an individual Chapter 11) bankruptcy case in the near future, here is a list of actions NOT to take:

1. Do Not Use Credit Cards for 90 Days Prior to Filing.

The best method to ensure that a creditor will not red-flag your account is to simply not use credit cards during the 90 day period preceding your bankruptcy filing date. If you do, please make sure that you are only charging basic household expenses and not jewelry for the girlfriend/wife or Mediterranean Cruises!

2. Do Not Take Cash Advances.

Taking a cash advance from your account within 90 days of filing is a sure-fire way to receive an objection. The bankruptcy code provides that all cash advances for more than $750 within 90 days of filing will be presumed no dischargeable, which means that the debt will survive your bankruptcy, and the credit card company may sue you and garnish your wages despite your bankruptcy filing. Surprising to some, DO NOT transfer balances from one account to another during this time period either. Balance transfers are essentially cash advances, so any amount transferred will be presumed no dischargeable.

3. If you want to keep a credit card, pay down the balance to zero, but before 90 days of filing.

If you file Chapter 7 bankruptcy without paying down the entire balance on your card, the issuer is technically not a creditor and will not have to be listed on the bankruptcy schedules. Be wary of this practice, however, as any charges you make beginning the day of filing will not be wiped out in bankruptcy since the will be post-petition debt. If you must use a credit card post-petition, please only charge budgeted items and basic household expenses. Any only charge what you can afford to pay-off in full at the end of every month.

Will B. Geer
Atlanta Bankruptcy Attorney

While many people understand the basic idea behind filing for bankruptcy, few people actually understand some of the key concepts. There are two outcomes to a bankruptcy case, a discharge or a dismissal. A discharge is the desired outcome, which involves having their debts resolved and liability over removed.

A dismissal is the closing of the case, in which there is not resolution to the debt. As people pursue bankruptcy there is still much to learn about how a discharge works.

Types of Debt

Debts fall into one of two categories, unsecured or secured. Unsecured debts are the most commonly held source of debt among bankruptcy filers. Medical bills, credit cards, some loans and even student loans are considered unsecured debts. The word "unsecured" refers to the fact that these debts do not hold any asset or collateral against the loan. Instead, these are given based on a promise of repayment. In general, unsecured debts are the easiest type to resolve in bankruptcy and can usually be managed in either a Chapter 7 or Chapter 13 bankruptcy.

Secured debts are those that hold an asset or collateral against the loan. In the event of default the lender can seize and liquidate the asset in order to satisfy what is owed. Common examples of secured debts are mortgage and car loans. In these loans, the lender can foreclose or repossess if the borrower is not paying what is owed. Secured debts are more complicated in bankruptcy in that the borrower must repay what is owed in order to keep the property. These are best managed in a Chapter 13 bankruptcy, whereby the debtor develops a plan for repayment.

Not All Are Equal

It is important to note that not all debts are equal. Even some that are considered unsecured may still be required to be repaid in order to avoid asset liquidation or wage garnishment. For example, back taxes and student loan debts are both considered unsecured. However, both of these are required to be repaid and are generally not eligible for bankruptcy.

While there are some cases in which these may be included in a filing, there are very strict rules as to their qualification and inclusion in the case. Further, it is most often the case that these are required to become part of a Chapter 13 case in the instance they do become eligible for filing. Also, there are some debts that are not eligible for bankruptcy under any circumstance. Back due child support, unpaid court fees or criminal negligence payments are never eligible for a discharge.

The Walters Dunn law firm aims to help local residents resolve their debt issues and achieve a financially healthy future. They provide high quality legal representation that helps lower monthly debt payments, stop wage garnishment,prevent foreclosures and repossessions, and stop calls from creditors. The Lee Law Firm bankruptcy lawyer in Austin have many years of experience in all aspects of Chapter 7 and Chapter 13.

The amount of debt in the world is truly amazing. Some of it exists because people made bad financial decisions and they purchased things that they could not afford. Some of it exists because the market changed and things that looked like good deals suddenly became very bad ones. Still other instances of debt come from failed business ventures that could relate to many different things, from a bad product to a bad advertising campaign. The one thing that all of the people in these situations have in common is that they need to get out of debt as soon as they can.

One thing that has come to light recently is the existence of companies like EagleOne Debt Solutions. These are companies that offer to purchase debt from lenders. They then have the debt and they ask for the money from the person who owes it. They can help people to find relief regardless of the things that happened that got those people into the situation. Business owners and consumers alike can use these companies when they want to repair their credit scores and get themselves into the financial realm that they have longed for over the last few months or years.

The way that a company like this works is that it will make it so that the debt is lower. For example, you may want to work with NationalRelief, as they are one of the more established and professional companies that are out there right now. The agent will do what they can to talk to the people or the companies that loaned you all of your money in the first place. Since you have had no choice but to ignore your debt because it is too extensive, these lenders will be open to the idea of forgiving some of it if the consolidation company pays back a portion of it themselves.

There has been some talk in financial circles that companies such as Lowermybills are not legitimate, but the evidence strongly shows that this is not the case. All that you have to do is look at a review that was written by someone who used the company’s services. Talk to someone who no longer has any debt because of the plan that was put in place. So many people have been helped that it is clear that a lot of these companies are very useful and legitimate.

The way that you can find a legitimate company is by making sure that it really is a company. If a person claims that they have a lot of money and that they want to help you out, they might be looking for a way to rip you off. If they call you on the phone and claim to be part of a company, but you cannot find any records that such a company even exists, you should be very wary of working with them. These are the types of situations that can lead you to a scam.

Real companies will be registered and documented. You can check the records that the government keeps that relate to all of the companies that are created or maintained each year. You can look at the Better Business Bureau to see if they have endorsed the company. These are all signs that the business is real and that you do not have to be worried. Remember, there is a very real market for this kind of work and it can be very helpful. As long as you do a bit of checking to make sure that companies are real, you will be fine.

The purpose of filing Chapter 7 bankruptcy is to discharge debt, which permanently protects the filer from collection activities by creditors. But sometimes debtors may not want to discharge specific debts. I’m not referring to a credit card that offers frequent flyer miles or a bill from a favorite doctor.

All unsecured debt, with the exception of student loans, is discharged in a Chapter 7 bankruptcy case, even if the debtor would like to exclude the creditor from the process. However, secured loans such as mortgages and car loans can be waived from the effects of the discharge order through a document called a reaffirmation agreement.

Reaffirmation means that the debtor waives the right to discharge the debt. In return for reaffirming the loan, the debtor gets to keep the collateral. Reaffirmation agreements must be signed by both the debtor and the creditor. They are completely voluntary and a debtor cannot force a creditor to sign a reaffirmation agreement. If a creditor refuses to sign, in most cases they will not take steps to repossess the vehicle or foreclose on the home if the debtor contains to make payments under the original contract. There are other requirements such as paying property taxes so that the lender’s lien doesn’t become subordinate and maintaining insurance so that the property is adequately protected.

Reaffirmation agreements must be approved by the court. Each agreement is submitted to the bankruptcy court for review before it becomes binding on the parties. The court considers the agreement and determines if the debtor can afford the payments based upon the income and budget filed with the schedules. In most cases the court will not allow the debtor to reaffirm a debt that they clearly cannot afford based upon the information in the schedules. If the court denies the reaffirmation agreement the debt is discharged, but the debtor can usually keep their property by containing to make payments under the original contract.

Nathan S. Graham is an attorney with The Wright Firm, LLP. Nathan represents individuals and small businesses in Chapter 7 and Chapter 13 bankruptcy cases. The Wright Firm, LLP, has offices in Dallas, Denton, Lewisville, and Frisco.

For more information about Nathan Graham visit the Wright Firm’s web site at http://www.northtexas-bankruptcy.com or read Nathan’s blog at http://bankruptcyinfo-dallas.com.

Article by Ann Gibson

Credit card helps you to meet your needs every time and everywhere. It is indeed the most lucrative way to spend money. Now as long as you have one credit card, things will be all right. But the problem will knock your door once you have more than one credit card without being able to make regular payments. This leads you to credit card debts, which give nothing but pain and frustration. And to help you get out of such adverse situation, credit card debt consolidation has emerged in the loan market. It help borrower to remove their debts and gifts a fresh life. Let us have a look of what this consolidation is all about.

With credit card debt consolidation, you get a chance to consolidate all your unpaid debts into one single manageable loan. Here as a borrower, you pay only on a single loan to a single creditor instead of various loans to various creditors. Thus this type of consolidation brings rays of hope for borrowers sinking in ever increasing debts.

Except paying to a single creditor; under credit card debt consolidation, you get the added advantage of lower rate of interest along with low monthly repayments. Moreover this kind of consolidation puts an end to all the unending phone calls of your old creditors, which used to disturb you.

Credit card debt consolidation is open for all types of borrowers irrespective of any credit score. Now you can ask from where to access such consolidation. Well, options are many. You can find debt consolidation agencies, debt experts around you, who specialize in offering credit card debt consolidation to borrowers. You can also get credit card debt consolidation from online method. Here you can find free loan quotations regarding such loans, you can meet several trusted lenders and in this way you can come up with the best possible loan offer regarding credit card debt consolidation.

Article by Marcilio David

Have you thought about consolidating your credit card debt? If those high interest rates on cards are killing you, this may be an option. When you consolidate credit card debt, you get one lower payment per month.

There are four easy ways to go about consolidating credit card debt.

1. Get a home equity loan. A home equity loan is a second, third, or even fourth against the value of your home. You pay off all of your credit cards and secondary debt and make one payment to the lender. There are a number of advantages to a home equity loan when consolidating credit card debt. For one thing, home equity loans have the lowest interest rate you can find. Another reason is that if you have equity in your home, they are fairly easy to get. But, be forewarned that if you can?t pay the debt in full each month, you could risk placing your entire home in danger of foreclosure.

2. Get a personal, or signature loan. A debt consolidation loan is frequently available from your bank or from a lender affiliated with debt consolidation quotes that you can get for free. Again, you will pay off all of your high interest smaller loans and make one payment to the lender. While the debt consolidation loan will have a lower interest rate than your high interest credit cards, it will not be as low as a home equity loan. This is caused for having no assets backing up the loan. You can also discharge a personal loan in bankruptcy, something you can?t do with a home equity loan.

3. Get a credit card with a large balance. If you have several small credit card bills, you can sometimes get one low interest credit card and transfer all of the other balances to it. Be sure that you get rid of all of the small cards or you may be tempted to use them and then have twice as much debt. If you have a decent credit report, you may be able to get a credit card with a large credit limit. But, make sure that the new card has a lower interest rate than all of the small cards because that is the whole point of consolidating credit card debt.

4. If you can´t consolidate credit card debt by working with lenders or credit card companies directly, go to a debt consolidation firm. These firms work with the credit card companies themselves. Frequently, they are able to negotiate lower interest rates or even get the principle reduced. Then, instead of paying multiple bills each month, you will make one payment to the debt consolidation company. Keep in mind that there are for profit and not for profit debt consolidation companies. Some of the for profit companies have turned out to be very nasty. So, do your due diligence before signing up.

We all have many options for consolidating credit card debt. Choose the one that gives you the best combination of lowest payments per month and lowest overall interest payments over the life of the loan.

Tags: credit, credit card, credit card debt, debt consolidation