It could be that bankruptcy is the most suitable debt solution for you if your debt has become unmanageable and you can’t keep up your monthly repayments.. You may of been told that bankruptcy should be considered as a last resort, and that you should try an IVA (Individual Voluntary Arrangement), IPP (Informal Payment Plan) or DMP (Debt Management Plan) first, however this isn’t always suitable. What’s right for you depends entirely on your circumstances as these are all solutions to the same problem, but tackled differently. What sets bankruptcy apart from the other debt solutions is the potential to wipe off 100% of your debt and have you discharged from bankruptcy within 12 months. Once discharged you no longer have the bankruptcy restrictions placed on you. Favourable circumstances concerning bankruptcy

There’s no risk of bailiffs coming round and taking any of your belongings. Once you enter into the protection of a bankruptcy order, creditors can no longer harass you for your debts as they are no longer your responsibility. You can keep the tools of your trade, your car (providing it’s not over £2500), household goods, clothing, bedding and furniture. If you own your own property it will not be seized from you if it is in negative equity. However, if there is equity in the property then it will be seized. How bankruptcy affects you Once declared bankrupt you will be subjected to certain bankruptcy restrictions. You will not be able to obtain credit over £500 without informing the lender that you are bankrupt. Realistically, you will have difficulty obtaining any credit during the 12 months that you are bankrupt, but once discharged it will become increasingly easier and a discharged bankrupt will still be able to have a mortgage in the future. Bankruptcy will be recorded on your credit file for 6 years from the day that you were made bankrupt, despite the fact that you will be discharged from bankruptcy after 12 months. Certain occupations are also excluded from bankruptcy Some occupations are affected by bankruptcy and it is your responsibility to check your employment contract if you are at all unsure. Click here to see if your occupation is affected. What do you need to do? Seeking professional advice is the best way forward. You can complete an enquiry form and one of our advisors will call you back. Alternatively you can contact us directly. Start to gather all details of your creditors and what you owe, as well as a rough idea of your expenses. You will need this information later. If you’re not sure who your creditors are you can find them on your credit file. Request your credit file here.

If you are or have been bankrupt you can still get a loan. Some lenders and other finance professionals, or your neighbours, friends, family and well-meaning but misinformed people would have you think that the minute you file that bankruptcy youll never have a car or a home in your name again.
That is just not the case. There are firms that actually specialize in giving loans to the bankrupt and those with other bad credit issues.
It may be that those who are bankrupt will have to wait until the bankruptcy case is dismissed or the creditors are paid to get a loan for a vehicle or residential property, but thats not always the case. A lot depends on what type of bankruptcy you filed.
If when you are bankrupt you filed a Chapter 7 bankruptcy before you can get a loan you will have to wait two years. With a Chapter 13 bankruptcy the criteria, generally, for acceptance of a loan when having been bankrupt is that the creditors have been paid.
Since the type of bankruptcy determines how quickly and under what circumstances you can get a loan after you are bankrupt its important to know the various types of bankruptcy. Here are the basics.
Chapter 7 bankruptcy is filed as a protection of your personal belongings and lets you start on the road to financial recovery while paying your creditors back systematically. If you have a loan or two or three when you go bankrupt you can still pay them back, on a schedule that you can afford. You dont have to default.
To apply for a Chapter 7 bankruptcy youll need to gather your list of the people and firms to whom you owe money – your creditors. Youll need to present to the bankruptcy attorney a list of your assets and liabilities, and the property that will be – you hope – exempt from collection.
Youll need to prove your income and your expenses, and a statement of what you intend to do about the debts that are secured. Your property, including any that is part of a secured loan when you go bankrupt, will be turned over to a trustee.
You, or your attorney, meet with the creditors, your list of exempt items is discussed and you tell the others how you will pay them back. They have 30 days to disagree. The creditors then have 90 days to talk with the court about you and your bills.
The reasons that the criteria for getting a loan when youve been bankrupt differs between a Chapter 7 and Chapter 13 is that in a Chapter 13 you keep your vehicle, your home and your other possessions.
It is possible that a potential lender, when considering you for a loan, could look askance at this type of bankrupt situation. You, unlike a Chapter 7 bankruptcy, chose not to give up your property to pay off your debts.
If the post bankrupt loan youre seeking is for a home or vehicle it could be that the new potential lender will recall that in the last bankruptcy the lender who had your home as collateral didnt get it back when you failed to pay.

In Australia, you can start recovering fairly quickly from the trauma and stress of the days and weeks and months, and sometimes years of worry leading up to the time of actually making the decision to go bankrupt, and doing it.

Declaring yourself bankrupt, never let a creditor send you bankrupt, is a very big step, one of the biggest that you’re likely to take in your lifetime.

It can be a very lonely step too, because you are not likely to have confided in too many of your family and friends about your actual financial position in the time leading up to making the decision, the bankruptcy step.

Fortunately, having made the decision, it doesn’t take long for the formalities to be completed. Without having to go to court, you can actually become bankrupt and out of debt in about a week.

Most bankruptcies in Australia are not business related either.

The majority of people who declare themselves bankrupt are just ordinary people who, due to some unforeseen happening, now find that the wheels have fallen off and so they can’t pay their debts off at the rate and in the time frame expected demanded, of them.

Most are in a job, and most have looked at the so called alternatives on offer, like Debt Agreement Proposals, and have realized that these are not the answer that they are promoted to be.

After researching bankruptcy, and it sometimes takes a bit of courage to take that step, people facing bankruptcy are often surprised to find that there is life after bankruptcy.

Most didn’t know for example that as a bankrupt, in Australia the minimum amount of their weekly salary or wage that they can keep, in other words it can’t be touched by a creditor or their bankruptcy trustee, is $771 75 per week as at 1st April 2008.

That’s called the theshold Amount. This amount gets adjusted each March and September.

The minimum $758.80 is also net, after tax and after paying child support, if that is applicable. In other words, it’s the bankrupt’s weekly spending money.

That’s also assuming that the bankrupt has no dependants. If there are dependants then the amount is more, there’s a sliding scale. For example, with one dependant the minimum amount of net wage that that a bankrupt can earn and keep is $910.67 cents per week (net don’t forget), and with four dependants it is $1,034.15 (net) per week.

The Australian Government intends that a bankrupt does have the chance to recover, and to have a reasonable amount of retainable income on which to decently live, and to be able to start to recover from whatever went wrong to cause the bankruptcy.

If a bankrupt earns more than the net theshold Amount applicable to them, taking into account the number of dependants that they have, then during the three years of the bankruptcy the bankruptcy trustee can only require the bankrupt to contribute 50% of the net weekly wage that goes over the theshold Amount, to their bankruptcy.

These theshold Amounts and the 50% of the excess requirement only applies for the three year term of the bankruptcy. After that the now ex bankrupt can keep all of their income.

If during the 3 years of their bankruptcy, a bankrupt saves and then buys an asset like a speedboat for example, then the bankruptcy trustee can claim and sell the speedboat because it’s no longer their income that they haven’t yet spent, nor is it the sort of asset that a bankrupt can own in that time.

The bankruptcy trustee cannot claim any savings that the bankrupt generates out of this income, provided the amounts stay in the account that the salary or wage went into on day 1.

Bankrupts need not fear that they will lose many, if any, of their personal possessions either.

As a bankrupt you can retain tools of trade with a second hand value of up to $3,150.

You can keep a vehicle that a dealer would pay you no more than $6,300 if you wanted to sell it to him for cash. If it’s secured by a Bill of Sale, then you can keep it as far as the bankruptcy trustee is concerned, if piece of equity in the car is no more than $6,300.

For income threshold purposes, you can claim a person as a dependant provided their separate net income is no more than $2,834.

So you see, bankruptcy really does allow ordinary people to get out of debt, to get back on their feet, and so be able to get on with their lives.

Over the last year the US, once flying high, has fallen and face planted into a somewhat ugly recession.  For people with steady jobs the fear is of course the dreaded pink slip.  But as long as they can keep their jobs their paychecks in most cases will remain the same.  For small business owners a recession is often felt in the pocketbook.  With less people buying their goods and services their revenues and profit margins can start to sink.  And it can be painful for a number of reasons.  First many business owners have an emotional attachment to their business.  When the business starts to flat line its hard to readjust to the new realities of your surroundings.  If you are a restaurateur it might be hard to scrap plans for opening a new location across town even if the economic realties of the market make it clear that continuing ahead with previous plans is illogical.  The second difficulty is that it’s hard to readjust ones life to deal with a lower take home pay.  So while a small business might see a 20% drop in revenue that could translate to a 40-50% drop in profits.   And while you might have lived on a smaller revenue 10 years ago it’s hard to go back to that.  Living without regular out of states vacations is one thing going back to that point is even more difficult.  And these somewhat harsh realties are what drive people to look for something, anything that can restore their business to its previous health and prosperity.  

First I want to point out that in some cases advertising in a recession can be a wise move to increase market share and take advantage of a bad market.  But more often what I see is this.

“Our revenues are way down”"That’s horrible”"Let’s spend a ton of money on advertising and hope we can put this behind us”

The problem is that the difficulty for this business is not that they didn’t spend enough on advertising last quarter.  The problem is that we are in a world wide economic depression caused by billions of crappy loans real estate loans given out over the last few years.  And yes everything is interconnected but putting out more ads for a local restaurant is probably not going to change this.

Simply put sometimes business owners make asset allocation decisions based on emotion instead of their current economic realty their business exists in.  A few reasons that increased advertising might be a bad idea for your business.

1) The number of potential customers is decreasing2) In many industries your competitors are increasing advertising to “spend their way out of a recession”3) Increased advertising and decreased customers is a bad market to ramp up your advertising budget4) Spending more on advertising can mean advertising in new venues.  Often when testing new venues you can wasn’t a lot of money discovering mediums that simply don’t work for your business.  5) You can increase your expenditures and your cash burn rate.  So basically the economy might eventually turn around but your business might not be there to see it. 

Ok so if the answer is not doubling or tripling your advertising what is the answer?  Here is my advice

1) Cut Expenses that are not needed.  Comb through your budgets for extras you added during better times but are not needed.  2) Keep current advertising that is working.  Whatever is currently providing you business I would stick with.3) Cut advertising that is not working.4) Adjust

Number 4 is probably the most difficult but important.  If ones business is affected by the recession (and most are) it might be a good idea to simply accept the possibility of a reduced monthly income for awhile.  I am not saying people should give up on their business or not attempt to increase profits.  But during a recession it might be a good idea to keep working to achieve higher goals but at the same time when you are doing your monthly personal budget accept the possibility that a weakened economy often results in less customers and lower revenue.  This means if you planned on buying a new car or taking an extra vacation it might be a good idea to change those plans. 

In the end by operating in a logical manner a business can survive a recession and hopefully be in a position to flourish once the economy recovers.

Bankruptcy .. what they forgot to tell you!

If you filed Bankruptcy in the past, you have by now learned that there are differences in both the type of Bankruptcy, Chapter 7 or Chapter 13, and the diligence of Attorneys practicing Bankruptcy Law, as well as the information provided to the Attorney by the Consumer.

Many Attorneys do a complete job in a Bankruptcy, while others are not so good. What usually happens in a bad BK is that many items are left out of the BK.. many times the filing list is incomplete and accounts are left out of the BK. If you are filing, get your credit reports from each bureau, and start a list or spreadsheet of each item. You do not want to miss any items, if you do, these items then re-report after the BK is discharged, and your Credit Score plummets.

Bad items after a Bankruptcy seem to hurt a Credit Score about 3 times more than the same item without the Bankruptcy on the Credit File. This prevents you from getting new accounts to build your Credit Score back up to where it needs to be to really get on with life. CCFG has done just this for others, and we may be able to do it for you, too.

Chapter 7 Bankruptcy relieves you from the obligation of re-paying creditors, it does not remove the accounts from your Credit Report, as many people think.

Chapter 13 is a repayment plan that gives you a few years to re-pay your creditors in a very structured way.

Let’s look at a few examples:

Medical Bills.. the original bill and the Collection Accounts may be wiped out by a BK.

Car Repo.. The lender adds fees to the original Payoff, sells the car at Auction, it brings $30,000 less than the total amount owed.. Lender then submits to Collection the $30,000 amount to be collected from you. The balance can be wiped out in a Bankruptcy.

Foreclosure .. Much like a repo, fees are added to the original account, the house is sold, and any difference between what is owed and the proceeds from any sale is technically owed to the lender by you as the borrower. The balance can be wiped out in a Bankruptcy.

You cannot file government backed student loans or personal taxes in a Bankruptcy, you are stuck with these items.

Again, just because you filed an account in bankruptcy, it does not remove the account from your Credit Report.. it does relieve you from the debt involved in the transaction. It does relieve you from future collection efforts on those accounts.

Both the Bankruptcy, and any associated Accounts may remain on your Credit Report for 10 years from the date of filing. This will drop your Credit Score, making it more difficult to obtain new loans. CCFG has seen many clients with BKs that “went away” well before that decade. No need to remain Bankrupt for 10 years, when you know what can be done.

For more bankruptcy information, see www.bankruptcyerased.com. For more information on credit, debt, credit scores, credit repair and restoration; see our main website at www.4higherscores.com

CCFG Does not offer Legal Advice, nor are we Attorneys. Always Consult a Legal Professional. Though we are not attorneys, we know a lot about how the world really works, and share it, both on our website, and through articles like this.