With the recent economic downturn in the U.S. and the countries affected by it, it is no wonder that many people are filing for bankruptcy. Thus the ever lucrative business of bankruptcy mailing list flourishes. These bankruptcy mailing list is use to drive more targeted customers to their business. Lending institutions and credit counsellors try hard to acquire as much information and data of bankruptcy filings.
Bankruptcy mailing list is simply a list of entities and individuals who have filed for chapter 7 or chapter 13. The list will be compiled and used by credit or debt counsellors and even lenders for an efficient marketing strategy. The list is very essential for any debt management agencies and counsellors to effectively market financial services. Firms that offer financial services like debt consolidation loans would benefit a lot with the lead list too.
With too many people finding they are in financial trouble nowadays, it is no wonder that bankruptcy mailing list is booming. But then you always wonder why your personal information is in someone else list. Do not worry too much about it because you cannot do anything about it. Once you file for chapter 7 or chapter 13 your personal information is place in a public domain. This will potentially become a bankruptcy leads and bankruptcy list for lenders and debt counsellors.
The list is vital and powerful instrument for lenders and debt counsellors because these are highly targeted individuals. The conversion ratio for this list is very astronomically high. Once interested companies got hold of this list, they can then develop a plan of action to lure potential customers. This will bring them more profits for their companies. Lenders who offer debt consolidation loans services can be happy with this list.
It is always the most vulnerable that get brunt of this business strategy. But there not much that anyone can do. These people are heavily indebted and buried in debts leaving them with very limited choice. And when you have very limited choice they pounce on you with high interest rates. This is the irony of life, when you down and out someone will pick on it and make a living out of it. Hard facts of life? You better believe it.
Upon purchasing a bankruptcy mailing list, you sure and certain that you will make a great deal out it. The company knows that when these offers are sent out, the recipient is almost already primed to commit to the services. So you know it is going to highly convert for you. And converting means business is good.
Financial institutions and companies who are in the business of debt consolidation and debt counselling need a bankruptcy mailing list. To some this is a business opportunity. They simply compile a list of information about bankruptcy filings and sell it as bankruptcy mailing list to companies interested.

As anyone who has seriously examined Chapter 7 bankruptcy protection knows all too well, filing bankruptcy may be the absolute worst thing that borrowers can do to improve their financial position. For desperate folk suddenly realizing that there is little they can do on their own to achieve debt relief, bankruptcy might seem like an attractive possibility. After all, from our earliest memories, Americans are taught to respect bankruptcy as the (for whatever reason) dignified end to debt crises. Whether playing board games or watching cartoons, we’re taught that bankruptcy is just what is supposed to happen once any borrower has debts that they can no longer responsibly manage. In our culture, bankruptcy is simply expected to be the final debt solutions to personal economic strife. Even as the nature of consumer debt changes from hospital bills and department store accounts to the burdens of credit cards too easily granted and too quickly filled to their limits, bankruptcy maintains a mythic allure as an all-inclusive cleanser for financial woes. 

Much as the debt protection of bankruptcy may have seemed a godsend for the generations that came before, there are now any number of new bankruptcy alternatives available for those debtors who have faced financial misfortune. More to the point, once a consumer takes time to fully analyze the Chapter 7 bankruptcy program, they may very reasonably wonder whether or not bankruptcy would be the correct choice for any debtor regardless of their own situation. Successfully filed and discharged, bankruptcy protection could indeed offer consumers new beginnings. In the best scenario, the fortunate borrowers could even start their financial lives over from ground zero, but that is only after they have suffered a harrowing ordeal that risks the utter ruination of their credit rating as well as the potential loss and seizure of any even vaguely valuable possessions. 

The relief that people may feel when entering the bankruptcy program is understandable, really. Given that most borrowers seriously considering bankruptcy have already had to deal with (the sometimes hourly) harassment from bill collection agencies and watch their mailbox fill to bursting with past due notices from credit card companies, it is not that surprising that the average consumer – struggling to pay their credit cards and other debts – would jump at the chance to have a specialist take over their affairs. The very idea that debtors would no longer be held responsible for their actions alone comes as a sort of salvation that impels otherwise cautious heads of household to essentially hand over the reins of their economic futures. Certainly, the bankruptcy lawyers charging more and more outrageous fees are not going to argue against what may as well be thought of as their own product. Despite the amount of time the lawyers may spend with their clients (they are paid by the hour, as you probably know), very few attorneys will spend even five minutes counseling borrowers about exactly what they are getting themselves into. Eliminating unsecured debts (credit cards, primarily, as these things tend to go) should be a priority, but wise debtors must recognize the limitations of bankruptcy protection under the current statutes. Above all else, they should know not to trust their attorneys for advice beyond their specialty. 

From the moment that potential clients enter their lawyers’ offices for an initial consultation, the attorneys tend to assume that the bankruptcy has already started and begin to ask questions about the best way to proceed. Of all the ways to decide whether bankruptcy is the best solution to credit card debt elimination for a client and his or her family, expecting fair and balanced advice from the lawyer potentially paid to handle their case presents problems that should be obvious to all borrowers. It is not always the lawyers’ fault, exactly. Becoming a successful attorney requires the sort of mindset that tends to ignore or flatly disregard competing notions of financial stability and methods of resolution. If anything, this mentality should be what any borrower would want to look for in their attorney, and such presumptions force the real problem. At this late stage of the game, debtors should be more interested in finding a debt management specialist who can knowledgeably tackle all of their specific issues and questions – even the questions that borrowers aren’t even aware that they have. 

Thinking, as they tend to do, that they will be able to buck the odds and turn the system to their advantage, there are a number of elements to the modern bankruptcy that most attorneys are loathe to mention despite the overwhelming importance of those elements to the people planning to file. Chapter 7 bankruptcy protection, the debt elimination bankruptcy program that was once upon a time the only sort of bankruptcy, is now far more difficult to successfully enter. Congressional legislation from just a few years ago has irrevocably changed the rules concerning the Chapter 7 process. Nowadays, borrowers attempting to file for Chapter 7 must be able to prove that they earned less than the median income for their state of residence. For debtors living in lower income regions of typically high income states like New York or California or Massachusetts, this can be absolutely ruinous. Even worse, the filers’ incomes are determined by a relatively random period set months before they actually file. If someone attempting to declare bankruptcy depends upon a seasonal rise in business or a commission that effectively makes up a dramatic percentage of their annual income, the earnings extrapolated from that small sample size could be thoroughly skewed. 

More importantly, debtors who are denied access to the Chapter 7 program by court appointed trustees should understand that they do not simply get to start over and try another avenue toward debt reduction. Instead, these borrowers are automatically switched over to the Chapter 13 debt restructuring program. With Chapter 13, debts are not eliminated. In fact, under this type of bankruptcy, borrowers are effectively forced to repay their lenders as quickly as possibly under court assessed budgets compiled using Internal Revenue Service data. As with Chapter 7 bankruptcies, the incomes that the government calculates could still be completely inaccurate depending upon the earning period from which they determine their figures and also utterly unfair since the courts do not bother to look at the specific region in which the filer lives. Within Chapter 13 bankruptcies, though, things get even more convoluted because the budget under which the borrowers are expected to survive (giving all additional funds to the accumulated creditors, naturally) also depends upon their state of residence. Meaning, people filing for bankruptcy in Seattle will be expected to have no more than the average costs of living for the entire state of Washington. In this way, the newly bankrupt have been forced to take out second jobs, pull their kids out of private schools, or even, in some extreme circumstances, sell their homes in order to relocate. 

Of course, for many of those borrowers whose financial situations are so grave that they must first contemplate the bankruptcy so-called solution, they do not need further impetus to take on a second or even a third job. This is yet another of the, for lack of a better word, hidden expenses of bankruptcy. Most borrowers have already girded themselves for the costs of bankruptcy attorneys – though they are always, ALWAYS greater than even the most well prepared debtor could dream – and the miscellaneous costs that arrive whenever the government is involved. Even the actual filing of bankruptcy shall require hundreds of dollars up front (for some reason, neither the lawyers nor the courts will allow those seeking to file bankruptcy any amount of credit). There is also the cost of essentially purposeless debt management courses from government certified instructors that filers must successfully pass before first submitting paperwork and before their ultimate discharge could be processed. As you should now expect, these courses (far from cheap – since only a few ‘schools’ per region pass government certification, they have no reason to follow the market pricing) shall be paid solely at the borrower’s expense. 

Perhaps the greatest true cost, though, is the sheer amount of time spent compiling all necessary documents and verifying that all information given to your attorney and the bankruptcy trustee is accurate beyond a shadow of a doubt. Remember, no matter what your actual intentions may have been, inexact data given to the federal authorities could be judged as fraud in criminal proceedings. Forget one teensy portion in a step-brother’s mining operation? What about that great-uncle’s time share absently gifted? And are you really sure you recorded every single bit of your income from six months ago? Every single bit? So sure that you would risk imprisonment should things turn out to be accidentally falsified? This is what bankruptcy protection actually entails. Much as there may seem a temporary relief from stress once you have passed on your credit card debts to another source, there arises an entirely different crest of tension. The bills may have stopped, true, but what exactly was on those reports? What was and was not spelled out? Beware of any supposed solutions that involve budgetary conditions prescribed by the Internal Revenue Service and guarded by the ever more ambitious watchmen of the federal justice department. 

At the end of the day, for even the luckiest of those consumers filing for bankruptcy protection, Chapter 7 still cannot guarantee the elimination of all of their personal debt loads. Secured loans, those debts maintaining attachments to actual property like cars or homes, tend to demand said collateral before giving an inch toward debt resolution. Child support and alimony – as well, if needs be said, tax liens and those financial obligations resulting from criminal trials – are obviously not to be touched, and, after a late 80s legislative fiat, student loans are also out of bounds. The medical community and various health insurance political action committees have been trying for some time to make sure that hospital bills will also be rendered immune to Chapter 7 bankruptcy protection, and, make no mistake, the credit card companies are dancing as fast as they can to ensure every single credit account receives the same treatment. 

This is not to say that there is no point to bankruptcy as we currently understand the process. As long as there is a chance to eliminate credit card debt, certain types of borrowers profoundly unlucky in their own personal finances should do whatever is necessary to attempt to clear the registers. However, for most ordinary consumers, just cutting back on purchases and maintaining a reasonable household budget shall eventually have the same effect. Whenever there is even the slightest chance of fixing personal finances without resorting to professional help, the debtor must take every last attempt to manage their own obligations however seemingly severe the deprivations. The American economy is in trouble. We are entering a recession. Still, that does not mean every worker need presume the worst nor that they should give up – which, for all intensive purposes, bankruptcy suggests. Cutting costs will never be pleasurable, debtors will have to adjust to a different lifestyle, but, once consumers look closely at the bankruptcy option, they will almost always choose any other alternative for eliminating their credit card debts. 

Even beyond careful budgeting practices, there are other maneuvers that consumers may attempt. Many credit card companies or similar lenders will offer forbearance or a stay of payment due dates if borrowers can show some cause for the delay however vague or gliding upon the rim of truth. Sickness, unemployment, familial tragedies – any decent excuse when articulately and passionately explained to an understanding representative of a lending institution may well prove the difference between bankruptcy and a survivable program of debt repayment. After all, as long as people continue to go bankrupt (and, no matter how much the enlightened borrower shall try to avoid bankruptcy, there will exist a segment of America determined to declare bankruptcy as some fated penance), creditors shall worry. Lenders don’t want to force anyone into Chapter 7 protection. Consumer credit card debt elimination as vouchsafed by the government, however rare and dangerous, would be the absolute worst possible consequence for the banks involved. 

We do understand that severe financial mishaps may necessitate governmental intervention. There is a reason that the United States originally offered such protection. However, most of the personal bankruptcies filed in America could be dealt with by other means far less damaging to the debtors’ credit and pocketbooks. Even beyond simply following disciplined household budgets and talking over the potential for re-structuring debt payments with creditor representatives, there are entire businesses that have grown up to assist consumers in their struggles with personal debt loads. Most everyone is at least familiar with the Consumer Credit Counseling program thanks to the industry’s non-stop marketing campaign, but, with increasing analysis from watchdog groups, it turns out that many of these companies are funded by the credit card conglomerates independently from whatever fees they charge their supposed clients. More to the point, the repercussions upon credit and the cost out of pocket are not much different than what borrowers could expect from bankruptcy proceedings. 

Debt settlement companies, on the other hand, though they are far less publicized (and, a new industry, exponentially less well known than bankruptcy protection by most Americans) negotiate with the credit card companies on behalf of their clients in order to reduce the total balances of the assorted debts that have accrued. Considering that – so long as bankruptcy remains a danger to their supposed holdings – lenders are more than willing to agree to something around fifty percent of the debtor’s actual obligation in exchange for virtually guaranteed payments from the debt settlement company, there is an obvious benefit for every borrower that would qualify for the settlement program. It’s not for every debtor, of course. A handful of lenders still stubbornly refuse to bargain regardless of the cause or value of the specific account. However, every debtor should at least inform themselves about the debt settlement option and take advantage of free initial consultations whenever they are available. 

As with any financial predicament, there is no way for a short article such as this to fully explain all the myriad possibilities and potentials a debtor may come across when attempting to eliminate his or her debts. Every debt scenario is different, after all, and there is no way for the borrower to come to a full understanding of what lies ahead without personal investigation. Credit card debts and unsecured floating obligations may cripple budgets temporarily, but, leaving aside the stresses unfulfilled payments may engender among heads of household, there are generally several different alternatives beyond Chapter 7 bankruptcy with which debtors may avail themselves. Look around. Cast your net around the varied solutions and see how they would best fit your particular circumstance. For an unfortunate few, bankruptcy may indeed be the only decision that makes sense, but, arduous as that choice may be, there’s a certainty that knowledge brings. Fiduciary protection (for, once again, unsecured debts; largely credit card accounts) from the federal government will always be there for the most desperate sort of borrower, the books will be balanced, but, with any luck, some chapters may not be closed.

In the UK, there are four main options for dealing with debt:

Debt consolidation – borrowing more money but reducing your monthly payment;

Debt management plan – reducing your monthly payments without borrowing more money;

Individual voluntary arrangement – a formal legal procedure which offers a write-off of debt after a prescribed period of time, generally, five years;

Bankruptcy – a formal legal procedure, which offers a write-off of debt after a prescribed time period of, generally, one year.

It is important to stress that there is no ‘right’ way to deal with a debt problem. Each option has its own set of advantages and disadvantages. And just as important, identifying the best option is as much to do with personal and family implications as with the financial issues.

Debt consolidation: How it works

Debt consolidation involves borrowing more money to repay your existing debts. The selling point is that the payments on the new loan will be less than you currently pay on your existing debts. This allows you to bring your income and expenditure back into balance, so solving your debt problem.

The problem with debt consolidation is that the reduction in monthly payments often comes at a heavy price.

Paying back your debt through a new loan over a longer period may sound good but take careful note of the figures. While the reduced monthly payment will help your budget, the calculation of how much you will have to pay back in total will be an unwelcome shock.

Also unwelcome if you are a homeowner may be the news that your consolidation loan is secured against your house – in effect, you are taking on a new mortgage (which is why these loans are often only advertised to homeowners). Fall behind on the consolidation loan payments and you risk losing your home.

Debt consolidation: things to be wary of

Watch out for debt consolidation companies who heavily sell additional insurances to accompany the loan. You may need protection against unemployment, sickness, or critical illness, but you will almost certainly get it cheaper if you buy it separately rather than bundled in.

If you fully understand the implications of what you are doing and are able to access new borrowing at a low rate of interest, debt consolidation can be an effective approach to a debt problem. But more often than not, it leads to worsening debt and sometimes even potential homelessness. If you are considering debt consolidation you must be aware of the downsides.

Debt consolidation is big business. And that means that some of the companies who offer loans are far more concerned with maximizing their profits than in ensuring that a consolidation loan is the right option for you. Watch out particularly for debt advice or debt management companies who suggest an additional loan without full consideration of other options.

A few years ago, debt consolidation loans were only available to those with flawless credit ratings. If you had current or previous arrears on your debt payments it was unlikely that you could access more borrowing. However, there is now a wide-range of companies that specialise in lending to borrowers who are ‘credit impaired’ or ‘sub-prime’.

Of course, these companies do not do this out of the goodness of their hearts. The number of borrowers with current or past payment problems means that there is a large market for this borrowing with interest rates that are higher (sometimes much higher) than you might expect.

Remember that high interest debt consolidation loans – which are secured on your property – are a win-win for the lender. If you repay, then they benefit from the higher interest charges; if you default, they can repossess your home and get their money back early.

Debt consolidation loans can be a good option if:

You have the self-control to see debt consolidation as a ‘once and for all’ solution.

You use the reduction in outgoings to bring your budget back under control, pay back any future credit card spending in full each month without fail, and start saving for future unexpected or irregular costs;

You are prepared to shop around to identify the best value debt consolidation loan;

Debt consolidation loans can be unhelpful if:

You use some, or all of the debt consolidation loan for reasons other than repaying debt. If you need to borrow £10,000 to repay debt, then don’t be tempted to borrow £12,000 to also pay for an impulse holiday;

You don’t shop around and end up paying a high rate of interest on the debt consolidation loan;

You don’t realize the implications of taking on a secured debt against your home.

Debt consolidation loans can be disastrous if:

You continue to accumulate debt after taking on the consolidation loan.

You cannot repay a secured debt consolidation loan and lose your home.

Advantages of debt consolidation:

You can reduce the total amount you pay each month on debt repayment.

Maintains your credit rating.

Disadvantages of debt consolidation:

Normally greatly increases how long it takes to repay your debts.

Often only advertised to homeowners.

Debt management plan

How it works

Any bank, finance company or credit card lender owed arrears by a consumer has the option to seek a judgment in the county court to reclaim their money. However, where you are not trying to avoid payment but are in genuine financial difficulty, the court is likely to order repayments based on your ability to pay.

The court accepts that you must first pay your ‘priority’ debts – these are debts where non payment would lead to the loss of your home (mortgage or rent payments); loss of an essential utility (gas, electricity, telephone, or water payments); loss of an essential item (cars or other hire purchase items); or could theoretically lead to imprisonment (magistrate court fines or council tax payments).

The court further accepts that you need to make other payments to maintain you and your family – so reasonable amounts for housekeeping, travel, clothing, and other similar items are taken into account.

What remains after this exercise is a guide to the amount of money left to repay your bank, credit card and other ‘non priority’ credit debts. The court will make a repayment order based on the figure but also take account of monies owed on other credit agreements. In addition, the court will freeze the interest charges so that the debt no longer increases.

The negotiation of reduced debt payments simulates the approach taken by the court. It involves producing a detailed income/expenditure schedule, showing how much ‘spare’ money is available after priority payments have been made and proposing a fair distribution of this money. At the same time, a request is also made for further interest charges to be frozen.

Arranging a debt management plan is something that you can do reasonably easily yourself, particularly if you use the self-help booklets available from National Debtline or your local Citizens Advice Bureau. However, it is also (unfortunately) true that the banks and card companies will sometimes respond more positively if a debt advice agency writes on your behalf.

Fee charging debt advice agenciesDebt advice agencies offer a similar debt advice service to the Citizens Advice Bureau but will also administer your reduced payments negotiated under a debt management plan. Your local CAB will often arrange for you to make reduced payments, but you will be responsible for making these payments.

The fee charging companies will also arrange that you pay your money over to them and they will pass it on. However, this additional facility comes at a price – the fee charging companies typically keep up to 15% of your regular payment as their fee and the whole of your first month’s payment may also be swallowed up in administration costs.

Of course, paying somebody else to administer your payments means it takes longer to repay your debts. There is therefore little point in paying for a debt management company unless you think their service is worth it.

Advantages of debt management plans

Allows you to bring income and expenditure back into line without taking on more borrowing;

You can follow this option by yourself or with the help of a no fee charging debt advice agency.

Disadvantages of debt management plans

There is no guarantee that your creditors will accept the reduced payments and/or freeze future interest payments;

The time taken to repay your debt will increase. The time will further increase if you pay your debts through a fee-charging debt management company;

Your credit reference file will show details of the Debt Management Plan. This will affect your ability to get credit in the future.

Debt management plans can be a good option if your financial problems are caused by a temporary reduction in income and the situation will improve in the near future.

Debt management plans can be unhelpful if:

Your ability to pay your debts will not improve within 12 months.

Debt management plans can be disastrous if:

The fees taken by commercial debt management companies and the refusal of banks and credit card companies to freeze interest means that your debt steadily increases.

Individual Voluntary Arrangements

At best, an IVA can be an excellent solution for somebody faced with an overwhelming debt problem. At worst it provides a moneymaking opportunity for the increasing number of companies that advertise IVAs. You must make sure that this is a suitable option for you and that the company operating the IVA fully understand and represent your financial situation.

How It Works

A specialist insolvency adviser, called an Insolvency Practitioner, draws up a proposal for you to repay a specified amount in full repayment of your debt. The payment can be made in a lump sum or over a period of time – often up to five years. The companies owed money agree to write off any debt still outstanding once you have made the agreed payment. The amount paid under the IVA is normally calculated with reference to the amount that would be collected if you were to be made bankrupt.

There is normally no up-front fee to pay in using an Insolvency Practitioner – the costs of the IVA are written into the arrangement. But you should be aware that the costs can be high (we are talking thousands of pounds for even a simple IVA). It is vital that you understand how the costs will affect how much you will pay and the proportion of your payments that will be paid to your Insolvency Practitioner rather than to repay your debt.

Advantages of IVAs:

Allow you to repay your debt at an affordable rate over a reduced period of time. Alternatively, the IVA may be proposed on the basis that your family or friends are prepared to help meet your debts;

Offers the advantages of bankruptcy but without some of the restrictions and disadvantages.

Disadvantages of IVAs:

The costs of setting up an IVA can be surprisingly (some would say outrageously) high;

You may have to pay an upfront fee;

Defaulting on the payment arrangement can lead to bankruptcy;

The regulation of Insolvency Practitioners is fragmented and many consumer groups report situations where Insolvency Practitioners seem more interested in the fees that they earn rather than the success of the IVA;

Your credit reference file will contain details of your payment default.

IVAs can be a good option if:

You face a large debt problem and a debt management plan will involve payments over a greatly extended period;

You are faced with bankruptcy but wish to avoid the associated restrictions and disadvantages;

You identify an Insolvency Practitioner who you can trust to propose a realistic, workable, and, if appropriate, sustainable arrangement which works to the benefit of both you and the companies to whom you owe money.

IVAs can be unhelpful if you don’t shop around to find an Insolvency Practitioner who understands your problems and who you feel you can trust.

IVAs can be disastrous if you agree to make regular payments that you know you won’t be able to sustain.

BankruptcyBankruptcy is a formal legal process that draws a line under your debts. It involves the sale of any items of value that belong to you (but some items, such as your basic household goods will not be taken). It may also require that you make regular payments from your income if you can afford this after you have paid your essential domestic and work costs.

Bankruptcy is not an easy way out of paying your debts but it is an option to consider if you face overwhelming debt pressure and can see no possibility of being able to meet your liabilities. It is generally a more attractive option for those with few or no assets.

How bankruptcy works

Bankruptcy can be started by the person who owes money or by the firms who are waiting for missed payments. Banks and other finance companies will generally only make someone bankrupt if they think if it is financially worthwhile. However, this does not stop them threatening bankruptcy even where they know that they will not follow through. If you are being threatened with bankruptcy, you should get advice urgently (your local Citizens Advice Bureau or other free independent advice agency is a good starting point).

Once bankrupt, you are under the control of the bankruptcy trustee. They will arrange to sell items of value belonging to you (including your house if you are a homeowner and the sale value is more than your mortgage debt) and will want to discuss what regular payments you can make. The trustee has the power to examine the way you conducted your finances prior to bankruptcy, particularly if you gave away or sold assets. You are required to cooperate with the trustee.

A recent change in the law means that those experiencing bankruptcy for the first time can normally expect to be discharged after a maximum period of one year. You are then released from your debts (although you may be required to make regular payments for up to three years). You are expected to learn from your experience. People who go bankrupt again get a much tougher time.

Advantages of bankruptcy:

Limits the period over which you repay your debt;

Provides legal protection in respect of your debts;

Disadvantages of bankruptcy:

You are subject to the control of the court;

You face the loss of assets other than those necessary to satisfy your domestic needs, your tools of the trade, and vehicles you need in the course of your employment (which does not include travel to and from work);

Gas, electricity, and telephone contracts will need to be put in to the name of another adult who lives with you. If there is no other adult, you will have to change to a prepayment system or lose the service;

You cannot hold certain public offices while you have not been discharged from bankruptcy, nor can you continue as a director of a limited company;

Your access to credit will be severely restricted until you are discharged; thereafter you will pay higher rates of interest until you have re-established your credit rating;

Some debts will not be included within the bankruptcy. These include mortgage and other secured debts, magistrate court fines, debts payable after personal injury claims, and debts to the student loans company;

Any determination by the court that you have acted dishonestly or recklessly can lead to restrictions on your discharge from bankruptcy;

You will normally lose the use of your bank account and will be forced to open a ‘basic’ account with no overdraft and limited other facilities;

You should assume that your employer, friends, and neighbors will find out about your bankruptcy. Your bankruptcy will be publicized in the local Press and is available to anyone who wants to request information about you;

You will have to pay £475 to petition for bankruptcy.

Bankruptcy can be a good option if:

You face a substantial debt problem, few assets, and limited ability to pay your debts;

Bankruptcy can be unhelpful if:

You are attracted by the advantages without fully considering the downsides of the bankruptcy procedure and aftermath;

Bankruptcy can be disastrous if:

You have assets which will be seized by the bankruptcy trustee;

Your employment, business or personal relationships will be detrimentally affected.

Bill Bailey is a freelance financial journalist. More financial advice at http://www.schnafflehound.com/finance

It is true that, we should avoid bankruptcy, but to think that life after bankruptcy becomes a standstill is indeed very much untrue. The creditors repeatedly denying you a loan approval, and your credit score getting miserably down, might make you feel helpless. Don’t feel down .To bug out of this agony you may refer to the following ways:

Be more frugal: Spend less. If you are already frugal by nature, cut down your unnecessary expenses. List the items which are a luxury for you. Try avoiding them. This can help you to make some savings.

Increase your income: Make a market survey to check out if your salary is justified. See if you get, offers with a better pay. Take up some part time jobs.

Plan your budget: Make a proper budget and stick to it. It will help you to keep your expenses in a proper track.

Track your expenditures: Review your expenditure regularly, check out if you are spending extra from any angle. Compensate that extra expense by cutting down some other expense.

Monitor your credit report regularly: After following a tight budget and frugal life for quiet sometime, pay off your pending debts as much as you can. This will help you to develop your credit report faster.

Increase your credit score: After you have been declared a bankrupt, increasing your credit score might seem a hard task for you. But, you should know that you can easily pull up your credit score within next two years of time. Only by regular monitoring your credit report and using your finances responsibly, you can increase your credit score at large. This will help you to qualify for a mortgage loan or a car loan within a short while.

Increase your financial knowledge: Increasing your financial knowledge will certainly help you to develop a better understanding of finances and know about the ways to repair your credit. This will also help you to retain a healthy financial condition much faster.

“If there is a will there is always a way”. While you are declared bankrupt, you may wonder if you can ever qualify for a home loan. Don’t worry, you can easily acquire a home loan even as a bankrupt, but you should be ready to buy it. Home ownership involves monthly expenses on mortgage, other expenses like, tax payment, insurance and maintenance. Check out if you are prepared for this. To get a home loan is yet an easy deal for you. So, even if you are a bankrupt you can easily swim out of the situation and lead a healthy financial life.

If you are in profound debt and struggling to find a way out, opt for debt solution. None of the debt solution measures can eliminate all your debts. But it can certainly reduce your debt burden. Debt consolidations, debt settlement, bankruptcy, are some of the effectual debt solution measures. Not all the procedures will suit you. To choose the most relevant debt solution you should understand the different means of debt solution.

1. Debt consolidation: Debt consolidation is the most accepted debt solution method. This process helps you to lower your interest rate and waive off the late fees. If you opt for debt consolidation, the debt consolidation company merges your multiple debt payments like the medical bills, credit card bills, unsecured debts and all other payments into one. You would have to make a single monthly payment to the debt consolidation company and the company shall pay your debts.

2. Debt Settlement: This is the most effective means of debt solution. In fact it is an alternative solution to bankruptcy. The debt settlement company negotiates with all your creditors to reduce your payable amount to nearly 40% to 60%. This is the process by which you stop paying to the creditors but keep saving the money instead. After your have accumulated at least 50 % of the loan amount, your debt settlement company shall negotiate with your creditors. Even you can negotiate with your creditors while settling your debts. But if you are unable to do so certainly contact a debt settlement company. However it is very important to take the correct decision at the exact time, while opting for debt settlement. Be careful while selecting the correct debt settlement firm.

3. Bankruptcy: While opting for debt solution, if all other options fail, you can file a bankruptcy. It is the easiest way to reduce or eliminate debts. When all other options, to come out of the debt phase are closed, you can declare yourself as a bankrupt. Basically, it is a legal process in which the person or the company declares that he is unable to pay his debts. The process of bankruptcy helps them to eliminate their debts or repay them under the protection of the bankruptcy court. The total number of bankruptcies in US is at a rise. Recently 1,794,795 number of people have been discovered to be bankrupt.

Despite having several advantages, bankruptcy should be avoided. If you are declared a bankrupt, then it will be reflected on your credit report for at least 10 years, from the day when you have been declared a bankrupt. Bankrupt people cannot easily purchase or rent a home or purchase insurance. Personal Bankruptcy can spoil your social status to a great extent.

Though you can pick up a debt solution process yourself, but always contact a financial expert before opting for a reliable debt solution.