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By: Bass Franklin

On October 17, 2005, new bankruptcy law went into effect, changing the process of filing for bankruptcy throughout the United States. This new shift in law requires additional steps to be taken by the attorney and the debtor but has been geared toward benefiting the debtor. The following details explain the changes in the law and how they will affect anyone considering bankruptcy.

Documentation
The documentation required for filing for bankruptcy has been increased, asking the debtor to provide additional information thoroughly detailing all of their income and expenses. If expenses exceed the IRS allowance, a ‘special circumstances’ document must be submitted explaining the reasons for the extra expenses. A statement of accuracy must also be submitted with the special circumstances document. The additional documentation makes the task of filing take more time but provides more accuracy to a debtor’s financial dilemma. This could result in more debt relief.

Counseling
In an attempt to decrease the number of people filing for bankruptcy, the new law requires that debtors receive counseling from an approved credit counseling agency within six months prior to filing for bankruptcy. The purpose of the counseling is to ensure that people are not making an uninformed decision to file for bankruptcy. It is also the hope of the court that counseling will provide alternative options for those who truly don’t need to file.

The Means Test
Before the new law, consultations with an attorney would allow the client to choose what type of bankruptcy they felt suited them best. However, the new law is framed to reduce the number of Chapter 7 filings by only allowing people who fall under their median state income, adjusted for family size and inflation, and people who meet rigorous standards under the means test to file for it. The rest of the people who don’t meet these standards must be evaluated by a series of complex, mathematical formulas that change annually to match new median incomes and expense standards. Clients who do not qualify through the means test will be required to file for Chapter 13 bankruptcy. The new law also extended the Chapter 13 term from a three- to five-year term, to a mandatory five-year term. Throughout the mandatory five-year term, the client must be supervised and represented before they can receive their discharge.

The effects of the new law make the process of filing for bankruptcy more complex, requiring attorneys to specialize in bankruptcy law. To completely understand how the new bankruptcy laws in your state can impact your debt and affect your life, speak with a local bankruptcy lawyer.

If you are seriously considering bankruptcy and you live in Los Angeles, you need to consult with an attorney who understands California bankruptcy laws. Not all bankruptcy attorneys are the same. While the process appears complicated, a Los Angeles bankruptcy attorney will be able to help you understand your options and avoid making bad decisions. You get one chance to file bankruptcy right the first time…

Settlement of credit card debt on a credit report can affect consumers in many ways. A large number of unpaid accounts on a record can spoil any future borrowing for the consumer. This is especially damaging when the person wants to buy a home or a car. The best approach to the situation is for the consumer to look for ways to settle accounts with the creditors so that their score can improve. Otherwise, they will just be stuck with a poor record and little or bad loan offers in the future. By seeking a settlement of credit card debt on a credit report, the consumer will have a record that shows they are working to become a responsible borrower.

Many consumers aren’t able to pay off bills for whatever reason. Some lose their jobs unexpectedly. Others have emergencies come up and have to spend money on a hospital bill or a car engine. Unfortunately, as the balances sit unpaid, these cardholders are facing monumental charges from creditors. These unpaid balances are reported and recorded on the consumer’s financial report. Like a domino effect, a poor report leads to fewer opportunities to borrow and loans with higher interest rates. These result in greater debts for the consumers. The sooner they decide to settle their current debts, the better.

A settlement of credit card debt on a credit report results in an end to the threatening calls from creditors. Eventually, the consumer’s financial report and score improve. This can take a number of months and at least three payments in a row to happen. It takes a great deal of patience, but consumers who have worked to negotiate and pay debts find financial freedom well worth the effort. By “rejoicing in hope; patient in tribulation; continuing instant in prayer” (Romans 12:12), consumers can overcome their financial burdens.

Consumers who want to settle their financial burdens need to talk with a professional. There are debt settlement lawyers and advisors out there who will assist consumers in the settlement of credit card debt on a credit report. First, the consumer hires them and agrees to pay a small fee for their assistance. Then the professional looks at all of the client’s debts and contacts the creditors. The lawyer negotiates with each creditor on a reasonable amount for payback. Often this is lower than the original balance. Many lawyers can successfully negotiate the removal of late fees and other charges on debt balances. With these arrangements made, the client can begin making more realistic payments to satisfy the creditors.

By: Jacob Brenteman

If you are in debt and need help eliminating it, this article reviews the option of free credit counseling services.
Free credit counseling has helped thousands of people get out of debt and achieve financial health. These companies provide a plethora of services geared to effective debt settlement and consolidation. They often offer classes on budgeting and sound money management as well. If you have found yourself in over your head in debt, there is help available. This article will tell you where to find a service that can put you on a healthy financial path once again.

If you have a serious debt problem and you need help to eliminate it, visit this website for free credit counseling services.

If you want to know how to get out of debt, you need to find a company that specializes in these services. Most classes in school do not teach you how to avoid the debt trap or dig your way out once you have gotten in over your head. However, this is precisely what credit counseling services do. They help you consolidate your debt into a single affordable monthly payment. They can then show you how to avoid the credit pitfall in the future by instilling some responsible money management practices.

Most debt elimination agencies will focus first on the current debt problem. They will work with your creditors to lower interest rates and even outstanding balances so you can save money on your payoffs. Then they put all of your outstanding debt into a single monthly payment that is easier to manage. Most companies will also advise you to cut up the credit cards that got you into trouble in the first place so you don’t continue to accrue debt even as you are paying off current obligations. This is the first step in responsible money management.

Credit card debt counseling will then teach you how to manage your money without relying on credit to make ends meet at the end of the month. This is easier said than done, since most people in this situation require a completely different way of thinking about money. These companies will teach you how to make a budget that helps you live within your means. They can also help you understand how to spend your money responsibly so you no longer rely on credit cards to make purchases.

Most people who need a credit counseling service are already in financial trouble. They can’t afford to pay more money for these services. That’s why companies like American Debt Enders offer free counseling and a host of other services to help clients get debt free. Any fees that are charged are worked into your single monthly payment that is still significantly lower than the payments you are currently making. If you are in more debt than you can afford, American Debt Enders provide expert credit counseling that will help you regain your financial health.

By: LawInfo