The myth of bankruptcy and redemption simply that the bankruptcy stopping ransom. Closer examination shows that it may not be quite true. Bankruptcy is a serious action taken to a tent redemption, which will have long-term consequences.

In particular, chapter 13 bankruptcy allows the person filing for work-one of the repayment plan, which extends over 36 to 60 months. The sum payments based on income from the “Claimant”, and he can essentially eliminate some debt. But this duty, not only exemption from matters that are not entirely collateral, such as cars or homes.

What happens is the applicant petition the court to recognize its Chapter 13 filing. It should not be taken, but if it is accepted, the court shall appoint a guardian, who determine the timetable for repayment. The petition should not be accepted if the applicant has filed more recently, or if its assets are not. If accepted, the Governor of starting its work in determining how the money from the landlord would be distributed to its creditors. Once the filing was made, the petitioner (homeowners) already has been unable to sell any of its assets without the permission of a guardian. If you want to stop your redemption by filing bankruptcy, you will temporarily lose their ability to sell their homes without the approval of Trustees.

If you find a buyer, the sale will enable the trustee, but only if he could be convinced, the price at fair market value (FMV). He needs to be assessed, because homeowners can sell their assets below market value prior to their registration. He is a trustee of the responsibility to make sure that does not happen, checking bank statements and the state archives back six months, and sometimes longer. If such a sale has taken place, the trustee may have to deal cancelled and selling reversed. That would be very inconvenient and expensive for new housing and the applicant.

Creditors know that many homeowners will file bankruptcy, as lawyers’ advertising so much, and homeowners do not understand the legal process. Where creditor receives notification that the bankruptcy was filed by the homeowners, they immediately instruct their lawyer to apply to the courts for his release from the bankruptcy filing. A special hearing will be scheduled, so there may be several a day in your delay without leaving his home. however, when the court hears petitions for the release of creditor homes, the court will approve it. landlord has now face bankruptcy, and his house will be on track to be sold.

The more the result of the release of the home is that the housing will have on its bankruptcy credit report for ten years instead of seven years for redemption. In fact, bankruptcy is a public registry for 20 years and will remain on each credit report, in accordance with the “Public Records” for up to 20 years. Before bankruptcy is a very short-term fix with long-term consequences. Consult a lawyer as soon as you think, bankruptcy may be an option for more information.

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Today more and more people to file a duty of protection and assistance under bankruptcy laws. With the current trend to increased bankruptcy filings, it is important to have a common understanding of some general facts related to the decision to file for bankruptcy.

First, for filing bankruptcy does not mean the end of the financial world for the individual.

Bankruptcy is a means for the debtor to suspend collection activities and tactics pursued in respect of the debtor. Once you have formally filed for bankruptcy, the court will grant automatic suspension order against debt collectors and their agents.

The stay order ending the various agencies to recover debts from further attempts to collect money from the debtor, while the case before the court, and until the court had not defined the terms of bankruptcy. Creditors, however, may petition the court for relief from the stay order. If such assistance is granted to the lenders will allow them to collect on any secured debt that the individual has written over them. Thus, the lenders will be able to get any money or property of the debtor.

Because of these types of complexity, the debtor must work in close contact with his lawyer regarding the details of payment of the arrears for the entire bankruptcy procedure.

Just know such petty facts as bankruptcy, said that you should be careful about appointing your property as collateral for the loan companies in the debt itself. Another point to remember bankruptcy is that one has the right to withdraw from bankruptcy, and. In other words, once you are satisfied with the terms of your bankruptcy and paid what was required of you, you will be discharged from further payments.

Once you have been discharged from bankruptcy by former creditors will no longer have any debt claims against you. This does not mean that any future debt incurred after discharge can be performed by creditors.

In many cases, if you file for bankruptcy protection, the court will ask that any assets not important to be turned into cash and be handed over to the bankruptcy trustee. The court then appointed a separate check that you fulfilling your part of the bankruptcy agreement, outlined in court and pay your assigned duties.

Once your disposable assets were liquidated (appealed to the cash), they will be distributed among creditors. There are of course a whole set of facts and bankruptcy laws that may be in effect during any type of scenario. That is why those considering filing for bankruptcy should do so only after consulting with a lawyer and bankruptcy receipt of all relevant facts.

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Bankruptcy is one option to consider in order giving yourself a “fresh start,” when you have more debts than you have assets. There are in fact many types of bankruptcy provided under the law but the most common is Chapter 7 bankruptcy, which is also known as liquidation.

When filing under Chapter 7 bankruptcy, all your assets, excluding those that are exempt under the law of your state, are dissolved and liquidated. Generally, the person tasked to do this is the court-appointed official, called a trustee.

All in all, the vital task of the trustee is selling your properties and using the proceeds to pay your creditors. After doing such, the court will then cancel many of your remaining debts, thus affording you a “fresh start” to life.

Here is a step-by-step guide to filing a bankruptcy under Chapter 7 bankruptcy:

Step 1: Decide whether you should file bankruptcy or not.

Filing bankruptcy is a personal decision, influenced by many factors, such as the amount of serious debts and your ability to meet the original payments or pay the full amount. For starters, when you are broke, it is never a nice experience getting harassed by creditors for debts incurred. For another, your decision to file should not be made for the sole purpose of putting a stop to your demanding creditors.

This is a significant point as secured creditors may apply for “relief from stay,” thus allowing them to continue their efforts to repossess or foreclose even though you already filed for bankruptcy.

Step 2: Get an attorney

While the law on Chapter 7 bankruptcy does not need individual consumers to hire an attorney who would represent them in court, it is still advisable to ask for legal help, particularly concerning critical decisions involved in bankruptcy.

Step 3: Comply with the legal requirements.

File your petition with the bankruptcy court serving in your area. If you are a business debtor, then file with the bankruptcy court in the place where the business was organized or has its principal place of business or principal assets. Your attorney should be able to advise you on how to deal with these required legal forms.

Step 4: Pay the necessary fees.

As with any other court cases, there are certain fees required, such as:

• Case filing fee

• Miscellaneous administrative fee

• Trustee surcharge

Upon filing, you are usually asked to pay these fees to the clerk of court.

Note that the number of installments is limited only to four. Additionally to that, you are also required to make the final installment no later than 120 days after filing the petition.

Step 5: Notice to the creditors and meeting.

After filing your petition for bankruptcy under Chapter 7, paying the necessary fees, and complying with the legal requirements, an “automatic stay” is granted to you by operation of law. This stay will efficiently stop most collection actions against you and your properties. This means that as long as the stay is in effect, creditors cannot initiate or continue lawsuits, wage garnishments, or even telephone calls demanding payments.

After the bankruptcy case has been filed, the bankruptcy clerk will give notice to all creditors whose names and addresses you provided. Then, the case trustee will hold a meeting of creditors between 20 and 40 days after you filed your petition.

Step 6: Cooperate with the trustee.

The case trustee has a vital role in a bankruptcy case. His primary responsibility is to liquidate your nonexempt assets in a manner that maximizes the return to your unsecured creditors. He does this by selling your property, if it is free and clear of liens and as long as it is not exempt, or if it worth more than any security interest or lien attached to the property and any exemption that the debtor holds in the property.

In view of the broadness of a trustee’s power, it is significant therefore that you cooperate with the trustee. Provide any financial records or documents that the trustee requests and answer questions, which the trustee is necessary to ask at the meeting of creditors under the Bankruptcy Code.

Step 7: After the discharge…

If all goes well with your Chapter 7 bankruptcy case – that is, no one files a complaint objecting to the discharge or a motion to extend the time to object – the bankruptcy court will issue a discharge order relatively early in the case, about 60 to 90 days after the date first set for the meeting of creditors

A discharge order is an order issued by the bankruptcy court, releasing you from personal liability for most debts and preventing your creditors from taking any collection actions against you. As a rule, excluding cases that are dismissed or converted, individual debtors receive a discharge in more than 99 percent of Chapter 7 bankruptcy cases.

For someone filing under Chapter 7 bankruptcy, a discharge of almost all of your debts is the ultimate goal. With the release of all your debts and creditors stopped from pursuing any further collection actions against you, the opportunity for a fresh start is apparent.

She was beautiful.

One look and that’s all she wrote

I wanted her and nothing was going to stop me.

I was determined.

Her body glistened in the sun. Her looks could kill.

She was every young man’s dream…

Of course I’m referring to the used, red, Mazda Miata I tried so desperately to finance shortly after my bankruptcy.

She captured my heart…and that was the problem. Common sense went out the window and I began making choices based on wants rather than needs.

It didn’t matter who financed that car for me or at what interest rate I just wanted it.

That’s the same type of thinking that led me to file bankruptcy.MISTAKE #1: Allowing emotions to influence your decision-making

People tell me all the time that they filed bankruptcy to save their homes. Homes that they…

…have three mortgages on…have no equity in

…owe more on than the appraised value

(this is called negative equity)

…are too emotionally invested in

What the @#?! Geez Louise.

Allowing emotions to creep into your credit or financial decisions is dangerous at best.

When my wife and I and I bought our first home after bankruptcy it wasn’t our dream home. We looked at it as an investment. Before every spending decision we made with that home we asked the question: Will this increase the resale value of the home?

Same thing when we purchased our first commercial building. Every decision was based on whether it would increase the value of the building.

It’s easy to get caught up in the emotion of the moment and start doing things to (and spending money on) a house or car to make it special just for you.

And you should make your house a home…within reason. My best advice: only put money into a property you own, and only in things that make the home appreciate.

For example…

Instead of adding a swimming pool…Add landscaping around your home

Instead of adding a storage shed in the back yard…Paint the interior walls a neutral color

Instead of purchasing expensive furniture…Install new carpet or hardwood floors

Your Realtor or real estate appraiser can offer advice on where it’s best to invest money in your home to increase its value.

And for you renters…putting money into the home you’re renting helps the owner more than it helps you.

Negotiate a deal that will benefit you before you do anything to improve a home that you do not own.

You get the idea.

Same goes for your car…

It’s just plain silly how kids these days spend money on fancy rims or high-end stereos and speakers for their cars please tell me your car doesn’t look like this.

My brother did this to his first truck a Mazda B2000 pickup truck. He installed a custom stereo system complete with walnut trim.

It looked ugly…really ugly.

I teased him about it so much that he finally removed the stereo.

Generally, a car is a terrible investment because it’s a depreciating asset. That’s one reason why I lease most of my cars. But, we all have to get around don’t we? And we’d like to get around in style. But, I guarantee you that having expensive rims on your car won’t do a thing for its value.

Spend your money on assets that increase in value. It’s a principle that separates the middle-class from the rich.MISTAKE #2: Believing everything you hear

Be skeptical of the credit advice every car dealer, mortgage broker, banker, well-meaning friend or family member, or credit union employee gives you they’re usually wrong.

Unless the person you’re talking to filed bankruptcy or has a long history of helping bankrupt people take what they say with a grain of salt.

Always, always, always get a second, third, fourth, fifth, sixth, and even a seventh opinion. Don’t stop until you find what you want…or simply keep on reading Life After Bankruptcy. A quick glance through the back issues should give you most of the answers you need.

A lot of lenders are going to say, No, to you when you apply for a loan. They’re going to tell you can’t get a loan or you can only get financing from a finance company at an outrageously high interest rate.

Don’t listen to them!

Just because a person tells you NO doesn’t mean the correct answer is NO. It simply means you should go to another lender.

You must be diligent.

You must have hope…not be hopeless.

NO must mean absolutely nothing to you.

When a lender told me, No, I just went to the next lender.MISTAKE #3: Shopping for credit the wrong way

Did you know lenders don’t need your signature or Social Security number to review your credit reports and credit scores?

It’s true!

Just stepping on a car lot gives the dealer permissible purpose” to review your credit.

If you allow them to make a copy of your driver’s license, you’ve just given them all of the information they need to pull your credit reports. Don’t believe the myth that your Social Security number is required to pull your reports…it isn’t. The car dealer can review your credit reports using only your name and address, and that could lower your FICO credit scores.

Fortunately, most lenders don’t practice this. But some do.

As you should know by now, almost every time a lender reviews your credit, they post a credit inquiry on your credit reports. And credit inquiries can lower your credit scores. I talked all about it in Life After Bankruptcy Issue #15.

So how do you control the situation?

First, you make it very clear to every lender you speak to that you do not want them to review your credit reports until you’ve made a final decision to work with them.

You do this by giving them NO information about yourself. This means no credit application…no Social Security number…and no driver’s license.

After you’ve interviewed several lenders and have found one that you’re comfortable working with, give your information to only that lender.MISTAKE #4: Not creating a written game plan

You need to put your game plan in writing. But don’t make this more complicated than it needs to be. Your plan can be as simple as:

1. Get a secured Visa card

2. Get a secured MasterCard

3. Raise my FICO credit scores to over 600

4. Finance a new car

5. Obtain a secured bank loan

6. Get approved for a gas card

7. Raise my FICO credit scores to over 640

8. Mortgage a new home

9. Raise my FICO credit scores to over 700

10. Get a home equity loan

11. Pay off all my revolving debt

12. Purchase my first investment property

However, goals without deadlines are just wishes. A much better game plan includes specific dates and may look like this…

Once you have your game plan in writing, you should make a goals folder and place a copy of your game plan in it for future reference. Put another copy where you can see it every day, then visualize how to obtain each goal.MISTAKE #5: Delaying your re-entry into the credit world

Some people need a cooling off period after filing bankruptcy…a time when you live on a cash-only basis. No credit. No credit cards. No checking account. Nothing. Michele and I did this.

How do you know if you need a cooling off period? Ask yourself, When was the last time I saw a loan as the solution to getting out of debt?

A better question would be, How can I increase my income to accomplish my goal of getting out of debt?

My wife and I chose to pay cash for everything from the time we filed bankruptcy up until we received our discharge papers in the mail.

We didn’t have to pay cash until we were discharged…we chose to because of what the discipline would teach us. Then we mailed our secured credit card application the very same day we received our discharge papers.

I’m not kidding.

We had the application and cashier’s check ready we were just waiting for the discharge letter.

You see, we took time and made the effort to create a written game plan, and then simply followed the plan.

Most people plan their vacations better than they do their financial lives. Don’t let this be you.

The longer you delay getting back into the credit world the longer your credit scores will suffer.

Even if you don’t use your credit cards that much it’s better to get them as soon as possible.

Why?

One of the key characteristics that makes up your FICO credit scores is how long you’ve had established credit accounts. So the longer you have credit accounts the better your scores.

These are just five of the most common mistakes bankrupt people make on a regular basis. There are many more.

I want to explore the one of the most important action you can take to increase your credit scores: removing inaccurate negative information from your three credit reports.

Be warned: should you decide to tackle this process yourself, it can be time consuming and frustrating.What the Credit Reporting Agencies are Legally Required to do on Your Behalf when You Ask

The credit reporting agencies are required by federal law to remove inaccurate information from your credit reports free of charge. However, nowhere in the law does it say they have to make it easy for you.

Because the credit reporting agencies can’t charge you to remove inaccurate information from your credit reports, they make you jump through hoops…climb over walls…and inconvenience you in any way possible to accomplish this.

And just try calling them and getting through their phone menus. Sheesh!How to Increase Your Credit Scores by Removing Inaccurate Information from Your Credit Reports

The concept is quite simple…you want to make sure there is no inaccurate, outdated, misleading, incomplete, or unverifiable information on your credit reports…especially if it’s negative.

Any negative inaccurate information that appears on your credit reports can have a dramatic impact on your credit scores.

And by dramatic, I mean bad.

I had a recent experience that once again proved how difficult it is to try to work with the credit reporting agencies.

I took time to review my credit reports a few months ago. With yellow highlighter in hand, I highlighted numerous inaccuracies on each of my three credit reports.

I hadn’t tried to speak with the credit reporting agencies directly over the telephone for years. But I was feeling adventurous…I thought I’d give them the benefit of the doubt, so I performed a little experiment to see if their customer service had changed in the last 13 years.

I mean, how bad could it be?

It should go something like this: you call each credit reporting agency…they promptly answer the phone…you talk to a real person…your issues get resolved quickly…you hang up in a few minutes…and everyone moves onto something else.

Right?

Wrong!

Not today.

Maybe on The Brady Bunch…but in the real world of mandated free credit reports…it’s just the opposite.

What I found was the entire experience was even more frustrating and stressful than I remembered. I almost needed to ask my doctor about anxiety pills.It’s Obvious that the Credit Reporting Agencies do not want to Talk with You Over the Telephone

One credit reporting agency even forces you to go online. Talking to a person is not an option!

What about all the people who don’t have internet access or aren’t computer savvy? I guess the protection of the Fair Credit Reporting Act doesn’t apply to them.

You see, each credit reporting agency buries their telephone numbers deep into their websites. So deep it took me forever to uncover their contact information (and I consider myself to be pretty internet savvy).

And if that wasn’t enough, one credit reporting agency forced me to purchase my credit reports directly through them if I wanted their telephone number to dispute inaccurate information.

Here I am calling the credit reporting agency to dispute items on my credit report, and I can’t talk to anyone unless I know the secret code.

I already had my free credit reports.

I already purchased my credit reports-just not from them.

I even had my credit reports from my mortgage lender from a recent mortgage closing.

But the three sets of credit reports I already had weren’t enough!

In order to talk to someone at one particular credit reporting agency, I needed a certain ID code from my reports. None of the codes on any of the credit reports I already had worked.

So I bit the bullet and purchased my credit reports AGAIN…this time directly from the credit reporting agency.

And the ID still didn’t work!

I was about to call my doctor for the anxiety pills. I’m not kidding!

How they get away with this is beyond me. No wonder they frequently get in trouble with the Federal Trade Commission (FTC) for not abiding by the Fair Credit Reporting Act (FCRA).

It just became too frustrating and time consuming for me to fight with the credit reporting agencies to do something that is supposed to be my right under the FCRA.

I had enough.

I did exactly what they wanted me to do…I gave up…surrendered…waived the white flag…cried, “Uncle.”

Hey, I have books to write; seminars to conduct; planes to catch; employees to manage; etc. Life is too short to waste my free time jumping through hoops to appease the credit reporting agencies.

So I hired a lawyer.

But I didn’t hire just any lawyer.Why a law firm is the best solution to helping you remove inaccurate negative information from your credit reports

I chose a law firm that specialized in this specific area of law.

After all, if you needed an eye operation-would you go to a foot doctor? Or when you filed bankruptcy-did you hire a divorce attorney? I hope not. Lawyers have specialties.

Don’t use your bankruptcy attorney to help you with errors on your credit reports. Lots of people assume that since the bankruptcy attorney helped with the bankruptcy, the attorney would know all about the credit reporting agencies. This is rarely the case.

Bankruptcy attorneys are good at helping you file bankruptcy, but pretty much useless in helping you remove inaccurate negative information from your credit reports.

So I did lots of research on how to find the best law firm to help me.

Here were my expectations for a law firm:

1. They had to live and breathe the Fair Credit Reporting Act. The FCRA basically tells us our rights regarding our credit reports. If you have a few hours to spare, you can go here to read it.

2. I wanted former employees of the credit reporting agencies on their board of directors, within their company rank and file, or at least as consultants. Having an insider’s perspective on how the credit reporting agencies work was essential for success and is what separates the real thing from the scumbag credit repair clinics that advertise on telephone poles.

3. They had to abide by the legal guidelines Congress created for this type of service. These guidelines are known as the Credit Repair Organizations Act (CROA).

4. I wanted to make sure they had many years in business with a clean record with the Federal Trade Commission.

A pretty tall order-I know.

But considering the FTC makes a regular sweep of credit repair clinics and shuts down the crappy ones…finding the right law firm was easier than I thought it would be.Is the term “credit repair” naughty or nice?

Law firms that specialize in helping you remove inaccuracies from your credit reports are often grouped in with other credit repair services that are not law firms. But there are major differences between the two.

You see, the companies that give this service a bad name are the credit repair clinics with no real experience in the credit reporting industry. Maybe the people who started these clinics got lucky getting inaccurate information removed from their own credit reports and decided to make a business out of it?

So I began researching.

I read boring stuff like court opinions, court settlements, case law, depositions…you name it-I read it.

It became very clear who I should steer away from…anyone advertising they were in the “credit repair” business and didn’t follow the Credit Repair Organizations Act (CROA).

Incidentally, I also became an expert in understanding CROA. Mainly because the way CROA is written-any person giving credit advice (like yours truly) could easily fall under CROA if they aren’t careful.

And if you violate CROA, very bad things can happen. So I try to be very careful with everything I write. After all, I don’t want to wind up with a new roommate named Bubba.

In early 2003, I was given a sneak-peek of a new credit-related product co-created by a very large company (that shall remain nameless because I still like them very much) and was co-branded with a semi-famous, yet irritating “know it all” blonde from CNBC.

I smelled trouble.

So I kept my mouth shut and didn’t bring it up…because, as you know, I don’t like pointing fingers and upsetting the apple cart.

Yeah right! Are you kidding?!

I told them exactly what I thought…

“This product, although very nice, will violate CROA and will land you in a class-action lawsuit.”

They ignored my advice.

I’m not kidding. I looked their vice president in the eyes and flat out told him what would happen as if I had a crystal ball in my hand.

Just recently, that company began wrestling with a class-action lawsuit concerning the very same product. (The vice president and most of his management team are now gone.) As a matter of fact, right now all three national credit reporting agencies are fighting similar class-action lawsuits. The plaintiff’s consider each of them credit repair organizations, which in-and-of itself isn’t illegal…it’s just illegal if you violate CROA.

One of the biggest myths surrounding credit repair is that people think

it’s illegal. Nope, it’s not illegal. If done properly…and if they

follow the federal guidelines…then it’s as legal as voting at 18 or

driving a car at 16.

You just have to follow the rules. And the rules are clearly spelled out in CROA. Many companies will try to sell you credit repair services-but few are on the up-and-up.I’ve found only a couple law firms that consistently play by the rules

After years of research I have been able to find only a couple law firms that consistently play by the rules. I know this because they aren’t being investigated by the FTC and don’t have attorney generals lining up to sue them.

Surprised that credit repair is 100% legal?

I bet you are.

The credit reporting agencies work very hard to convince you that ALL of these companies are scams and they can’t do anything more than you can do on your own.

That’s so untrue. There are legitimate companies that provide this service.

It’s no different than hiring a tax pro to prepare your taxes for you…or a lawyer to represent you in court if you are sued…or anything else that you can afford to pay someone else to do for you so you can keep yourself focused on your unique ability.

Sure, you can do those things yourself for free. But is it really free if you get audited or lose the lawsuit?

Bottom line: As long as the company follows the rules set forth in CROA…the credit restoration service they provide to you is ethical, legal, responsible, valuable, and time saving.

So again, credit restoration is not illegal. It’s only illegal if the company that is offering the service is not following the guidelines that Congress has set up.

Of course, the credit reporting agencies will try to make you think differently. They do a good job convincing the public, lenders, their business partners, and many others that all credit repair organizations are illegal. It’s almost as if they’re trying to brainwash you.Law firms vs. Credit Repair Clinics

While the credit repair clinics are all about scamming you with no regard to what’s right or wrong…a legitimate law firm abides by CROA.

So what I’m basically saying is that you can fiddle around and try to remove inaccurate information from your credit reports yourself…or you can hire someone to do this for you so you can do more enjoyable things with your free time.

Personally, I decided to hire a law firm out of the pure frustration of trying to do it myself-and I know this stuff like the back of my hand!

If you really want to get right down to it…the credit reporting agencies forced me to hire a law firm.

The only reason the legitimate companies exist is because most of the credit reporting agencies make it impossible to easily talk to someone over the telephone to dispute incorrect information on your credit

reports.

If the credit reporting agencies made it easy to correct errors on your reports, then law firms wouldn’t have to deal with representing people who have been run through the credit reporting agency ringer.

In summary, the credit reporting agencies consider you guilty until you can prove yourself innocent . Be sure you do everything in your power to remove any inaccurate negative information from your credit reports. It will serve you well and help you increase your credit scores.