As more and more consumers struggle with out of control debts, the concept of debt consolidation has become more and more popular, but many of the people talking about debt consolidation do not actually understand all facets of the program. At its heart, debt consolidation is about eliminating the debts that may have accumulated over the course of events large and small. In modern society, credit has become so simplified that individuals become burdened over time (often without ever realizing that it is happening) with financial obligations that they can not see any way to pay back. This is where debt consolidation comes in. Learning the basics of debt consolidation can ease borrowers stress loads and provide for a healthy economic future by eliminating their existing debt balances.
Debt Consolidation Loans And Home Equity:
The basic fundamentals of the debt consolidation program are easy enough to understand. Debts, primarily consumer debts unattached to collateral, are consolidated into a bigger loan (ideally with lower interest payments) which can then be more quickly repaid. Sometimes, this is done by a second mortgage or home equity loan. These typically boast rates far lower than the interest rates offered by credit card companies, but, compare to traditional mortgage rates, they are still well above what seems fair.
Of course, some mortgage lenders may try to tempt borrowers with mortgage rates that are initially very low – even as low as one or two percent – but contain adjustable time bombs that only adjust upwards; that one percent interest rate could be fourteen or sixteen within only a few years. Some predatory loan officers prey upon the egos of the borrowers by insisting that, with such low interest rates, the homeowners will be able to pay off their second mortgage well before the interest rates rise, but it is never a good idea (especially for borrowers that have already demonstrated problems with regard to excessive debt) to assume that course of action will happen. Indeed, given more availability of credit, many homeowners actually wind up getting FURTHER in debt. As they say, debts stretch to meet the capacity allowed.
The home debt consolidation alternative also puts homes at risk. As the economy worsens – caused in part by the sub prime mortgage crisis and the financial malfeasance of lenders who willingly ignored poor equity and shaky credit qualifications – and home property values plummet, too many consumers wind up losing their greatest investment and essential shelter because of some unforeseen emergency that caused them to default on ever rising mortgage payments. It is just too great a risk for most homeowners to take.
Other forms of debt consolidation:
At the same time, something must be done about their ever spiraling debt balances. There are unsecured debt consolidation programs, but they tend to be very hard to enter into and usually maintain interest rates similar to those of the original credit cards. Consumer Credit Counseling companies provide a service similar to debt consolidation, compiling all existing unsecured debts into one larger loan, but they work with the creditors to slightly lower balances and waive past over limit or late fees as well as reduce the overall interest rates. Unfortunately, besides whatever money they charge the debtor, Consumer Credit Counseling companies also ask for contributions for the credit card companies themselves for their services – for obvious reasons, this creates some suspicions about whom they are actually working for and watchdog groups argue that many of these firms are not acting in the best interests of their supposed clients. As another point that many people are not fully aware of, most credit analysts approach a notation of Consumer Credit Counseling involvement upon credit reports as tantamount to bankruptcy, and this can haunt consumers for years after debts have been consolidated.
Debt settlement firms act similarly to Consumer Credit Counseling companies, but they purely act for the debtor’s well-being. In the simplest definition, debt settlement professionals negotiate the severe reduction of funds owed by threatening the credit card companies with the debtor’s potential Chapter 7 bankruptcy. Faced with the possibility that the debtor could declare for bankruptcy protection and theoretically leave the creditors with no legal recourse to reclaim the money owed, most credit card companies will shave off up to sixty percent of the debt balances in exchange for a promised repayment schedule that’s generally between three and five years. This is a debt consolidation that works. The creditors are (relatively) happy, and the debtors can finally be free of their burdens within a (relatively, again) short period of time.
Of course, this method of debt consolidation won’t work for everyone. Credit, income, and the specific companies which hold the debts (US Bank, for example, is notorious for refusing to ever let their debtors walk away from a single penny) are vitally important, and there’s no way for a debtor to truly know whether debt settlement could protect his finances until they sit down and have a free consultation with a debt settlement negotiator who will thoroughly analyze each borrower’s past finances. There are many avenues toward debt consolidation, but, until debtors speak with and listen to a competent debt settlement professional, the debtors can never know which sort of consolidation best helps their specific situation.
Debt consolidation as a way of life:
Almost as importantly, debtors should fully listen to debt consolidation professionals about how to properly budget and learn ways of regulating spending habits so this sort of thing does not happen again. Even after all debts have been eliminated, too many borrowers find themselves back in the exact same morass of bills that cannot be satisfied and creditors ringing their phone off the wall demanding payment. This doesn’t mean that consumers should simply avoid borrowing after debt consolidation. There’s such a thing as good and bad debts, after all, and debt consolidation counselors can help you distinguish between those debts that are good and necessary (such as vehicles and homes and sound investments) and those that inevitably result in financial calamity.
Credit cards are, to be sure, a convenience that allow many consumers the advantages of emergency spending not otherwise possible for families living paycheck to paycheck, and they can be an incredibly valuable asset for self employed individuals essentially investing in their own careers. On the other hand, that very convenience and the irresistible allure of wanting things whenever the urge strikes could be very costly – with the ongoing build up of compound interest, that sweater or video game or trip to Vegas would be paid several times over through the course of the normal borrower’s life. Restricting spending habits, training borrowers to avoid unneeded purchases, and educating families about the importance of a household budget are also parts of a debt consolidation specialist’s job. Simply for the improved credit ratings that credit card usage fosters, the cards cannot be simply ignored, but borrowers should make sure to pay off their cards each month and have the discipline to not allow their wants to overcome their capacity to pay. A good debt consolidation professional does not simply get borrowers out of debt for the time being, they also make sure that their clients never get into debt again.
Credit Secrets Bible ! The #1 Credit Course In America Click Here!
Everything You Know Is Wrong! About Being Debt Free That Is!! And It Will Keep You In Debt The Rest Of Your Life! Click Here!
Credit Repair Secrets Revealed! Credit Repair Is A Hot Topic Click Here!
Guaranteed Bad Credit Financing. Receive A Loan Or Credit Card Even With Bankruptcy!
Click Here!
Living On A Dime - Financial Independence Through Better Life Choices. Publisher Of E-books About Paying Off Debt, Saving Money, Frugal Cooking And Homemaking. Click Here!
Eliminate Debt Fast Without Bankruptcy Or Debt Consolidation. Click Here To Learn The Amazing Secrets Of How I Got Rid Of $63,000 Of Debt In Only 4 Months Without Filing Bankruptcy Or Using Any Type Of Debt Consolidation Service! Click Here!
My Miracle Loans Learn How To Easily Borrow Up To $1 Million Cash In Less Than 7 Days All With No Credit Check, No Collateral, No Proof Of Income, And No Interest Fees! Click Here!
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Showing posts with label DEBT PROBLEMS. Show all posts
Showing posts with label DEBT PROBLEMS. Show all posts
Monday, 15 December 2008
Debt Consolidation
How do you define debt consolidation? Consolidation is the process of combining all unsecured debts into one account. Thus, instead of paying multiple debts-each with its own interest rate, the borrower can submit only one monthly payment with a single interest. Thus, the money you save from the additional interest costs can be used in paying off your original debt.
Many credit counseling services recommend consolidation on extreme cases of debt. If the borrower owes huge debts with different creditors, repayment can be very difficult unless the bills are consolidated. Nevertheless, this doesn’t mean that consolidation is always the solution to debt problems. A credit counselor must also suggest practical ways on how the borrower can be free from debts more easily.
Debt consolidation can be achieved either by taking out a loan or by enrolling in a debt repayment program. The credit counseling agency would negotiate with creditors on behalf of their client. Through negotiation, the original debt can be reduced and easier monthly payment terms can be availed. Most lenders are willing to modify their terms especially if there’s a possibility that the borrower would file for bankruptcy.
The benefits of consolidation include the following:
Lower monthly payments
Lower interest rates
No stress or pressure from lenders or debt collectors
Faster repayment
The opportunity to be debt free a lot sooner
The chance to improve your credit history
When consolidating, it’s important to do extensive research to find an agency that is both trusted and reputable. Take note that being a non-profit organization does not always guarantee that the agency is legitimate. Some debt consolidation agencies claim to be “non-profit” just to attract unsuspecting clients. To avoid getting ripped-off, carefully examine the consolidation company’s background and track record.
Credit Secrets Bible ! The #1 Credit Course In America Click Here!
Everything You Know Is Wrong! About Being Debt Free That Is!! And It Will Keep You In Debt The Rest Of Your Life! Click Here!
Credit Repair Secrets Revealed! Credit Repair Is A Hot Topic Click Here!
Guaranteed Bad Credit Financing. Receive A Loan Or Credit Card Even With Bankruptcy!
Click Here!
Living On A Dime - Financial Independence Through Better Life Choices. Publisher Of E-books About Paying Off Debt, Saving Money, Frugal Cooking And Homemaking. Click Here!
Eliminate Debt Fast Without Bankruptcy Or Debt Consolidation. Click Here To Learn The Amazing Secrets Of How I Got Rid Of $63,000 Of Debt In Only 4 Months Without Filing Bankruptcy Or Using Any Type Of Debt Consolidation Service! Click Here!
My Miracle Loans Learn How To Easily Borrow Up To $1 Million Cash In Less Than 7 Days All With No Credit Check, No Collateral, No Proof Of Income, And No Interest Fees! Click Here!
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Many credit counseling services recommend consolidation on extreme cases of debt. If the borrower owes huge debts with different creditors, repayment can be very difficult unless the bills are consolidated. Nevertheless, this doesn’t mean that consolidation is always the solution to debt problems. A credit counselor must also suggest practical ways on how the borrower can be free from debts more easily.
Debt consolidation can be achieved either by taking out a loan or by enrolling in a debt repayment program. The credit counseling agency would negotiate with creditors on behalf of their client. Through negotiation, the original debt can be reduced and easier monthly payment terms can be availed. Most lenders are willing to modify their terms especially if there’s a possibility that the borrower would file for bankruptcy.
The benefits of consolidation include the following:
Lower monthly payments
Lower interest rates
No stress or pressure from lenders or debt collectors
Faster repayment
The opportunity to be debt free a lot sooner
The chance to improve your credit history
When consolidating, it’s important to do extensive research to find an agency that is both trusted and reputable. Take note that being a non-profit organization does not always guarantee that the agency is legitimate. Some debt consolidation agencies claim to be “non-profit” just to attract unsuspecting clients. To avoid getting ripped-off, carefully examine the consolidation company’s background and track record.
Credit Secrets Bible ! The #1 Credit Course In America Click Here!
Everything You Know Is Wrong! About Being Debt Free That Is!! And It Will Keep You In Debt The Rest Of Your Life! Click Here!
Credit Repair Secrets Revealed! Credit Repair Is A Hot Topic Click Here!
Guaranteed Bad Credit Financing. Receive A Loan Or Credit Card Even With Bankruptcy!
Click Here!
Living On A Dime - Financial Independence Through Better Life Choices. Publisher Of E-books About Paying Off Debt, Saving Money, Frugal Cooking And Homemaking. Click Here!
Eliminate Debt Fast Without Bankruptcy Or Debt Consolidation. Click Here To Learn The Amazing Secrets Of How I Got Rid Of $63,000 Of Debt In Only 4 Months Without Filing Bankruptcy Or Using Any Type Of Debt Consolidation Service! Click Here!
My Miracle Loans Learn How To Easily Borrow Up To $1 Million Cash In Less Than 7 Days All With No Credit Check, No Collateral, No Proof Of Income, And No Interest Fees! Click Here!
Bad Credit Personal Loan Source. Bad Credit Personal Loans Regardless Of Bad Credit - Up To $25,000. Click Here!
Thursday, 11 December 2008
Changes in the Bankruptcy Law (UK)
The Enterprise Act 2002 – Changes to the Law Governing Bankruptcy.
From the 1st April 2004 the law concerning bankruptcy has changed. The usual term for bankruptcy was previously 2-3 years. From 1st April 2004 most bankruptcies will be discharged within 12 months.
The purpose for the changes is so that those who have been unavoidably made bankrupt for genuine reasons are given a better chance to start again.
The position is different for an individual who has been an undischarged bankrupt more than once in the previous 15 years and who was still undischarged at the time the new law came into force. In this case, if the court has previously granted a discharge, that order will continue to determine that date of discharge. If no such order has been made the bankrupt will be discharged on 1 April 2009 (5 years on from 1 April 2004), or by a court order. People made bankrupt through a criminal bankruptcy can only be discharged by order of the court.
Individuals who go bankrupt for a second time after 1.04.04 will be discharged after one year the same as anyone else unless the Official Receiver decides to suspend the discharge date or apply for a Bankruptcy Restriction Order.
If you are currently bankrupt, and your bankruptcy term will go beyond 1st April 2005, you should be discharged one year from 1st April 2004. If you are currently bankrupt and your bankruptcy order finishes in less than 1 year from the 1st April 2004, the order will end as normal.
Other significant changes relate to the treatment of assets. Whereas previously there was no time limit, The Act sets a limit of 3 years on the period during which the trustee in bankruptcy can deal with a bankrupt's interest in a home which is the sole or principal home of the bankrupt, the bankrupt's spouse or a former spouse. After this period it will revert back to the bankrupt (i.e. it will no longer form part of the bankruptcy estate).
Harsher penalties will be imposed on those who are considered to have brought about their bankruptcy through reckless or irresponsible behaviour.
Bankruptcy Restriction Orders may be applied for by the Official Receiver for
failing to keep or produce records;
incurring a debt prior to the bankruptcy that the bankrupt had no reasonable expectation of being able to repay
carrying on any gambling or rash or hazardous speculation or unreasonable extravagance which may have materially contributed to or or increased the extent of the bankruptcy debt.
Restrictions after bankruptcy could last for a further two to fifteen years.
The cost of a petition to be made bankrupt has also changed from £390 rising to £460.
Bankruptcy - The process
If a creditor wishes to make you bankrupt they must prove that you are unable to pay your debts or that you have no reasonable prospect of doing so.Once the creditor has sent a petition to the court, a hearing takes place and an order is made if the court feels that this is the appropriate outcome.An Official Receiver is then appointed. The Receiver will make an application to the court claiming any income that exceeds the amount you need to cover essential living costs for yourself and your family.The Official Receiver can also claim your property and any other assets you have. After a minimum period of one year you will no longer be liable for the debts included within the bankruptcy.
Bankruptcy - The Advantages and Disadvantages
What are the advantages of bankruptcy?For the person involved, bankruptcy provides relative peace of mind and possible automatic discharge after one year.For the creditors, bankruptcy allows a full investigation of the debtor's affairs to be carried out.
What are the disadvantages of bankruptcy?
You lose control of your assets - this may include your house and vehicle.
You cannot obtain credit for more than £500 without permission from the lender.
Certain occupations and professions will not allow you to go bankrupt.
You cannot act as a company director.
You cannot take any part in the promotion, formation or management of a limited company without the permission of the court.
You cannot trade in any business under any other name unless you inform all persons concerned of the bankruptcy.
Their may be restrictions on you practicing as a Chartered Accountant / Lawyer.
You may not act as a Justice of the Peace (JP) or school governor.
You may not become a Member of Parliament.
You may not become a member of the local authority.
Your credit is affected for many years after the annulment.
You may be publicly examined in court.
Credit Secrets Bible ! The #1 Credit Course In America Click Here!
Everything You Know Is Wrong! About Being Debt Free That Is!! And It Will Keep You In Debt The Rest Of Your Life! Click Here!
Credit Repair Secrets Revealed! Credit Repair Is A Hot Topic Click Here!
Guaranteed Bad Credit Financing. Receive A Loan Or Credit Card Even With Bankruptcy!
Click Here!
Living On A Dime - Financial Independence Through Better Life Choices. Publisher Of E-books About Paying Off Debt, Saving Money, Frugal Cooking And Homemaking. Click Here!
Eliminate Debt Fast Without Bankruptcy Or Debt Consolidation. Click Here To Learn The Amazing Secrets Of How I Got Rid Of $63,000 Of Debt In Only 4 Months Without Filing Bankruptcy Or Using Any Type Of Debt Consolidation Service! Click Here!
My Miracle Loans Learn How To Easily Borrow Up To $1 Million Cash In Less Than 7 Days All With No Credit Check, No Collateral, No Proof Of Income, And No Interest Fees! Click Here!
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From the 1st April 2004 the law concerning bankruptcy has changed. The usual term for bankruptcy was previously 2-3 years. From 1st April 2004 most bankruptcies will be discharged within 12 months.
The purpose for the changes is so that those who have been unavoidably made bankrupt for genuine reasons are given a better chance to start again.
The position is different for an individual who has been an undischarged bankrupt more than once in the previous 15 years and who was still undischarged at the time the new law came into force. In this case, if the court has previously granted a discharge, that order will continue to determine that date of discharge. If no such order has been made the bankrupt will be discharged on 1 April 2009 (5 years on from 1 April 2004), or by a court order. People made bankrupt through a criminal bankruptcy can only be discharged by order of the court.
Individuals who go bankrupt for a second time after 1.04.04 will be discharged after one year the same as anyone else unless the Official Receiver decides to suspend the discharge date or apply for a Bankruptcy Restriction Order.
If you are currently bankrupt, and your bankruptcy term will go beyond 1st April 2005, you should be discharged one year from 1st April 2004. If you are currently bankrupt and your bankruptcy order finishes in less than 1 year from the 1st April 2004, the order will end as normal.
Other significant changes relate to the treatment of assets. Whereas previously there was no time limit, The Act sets a limit of 3 years on the period during which the trustee in bankruptcy can deal with a bankrupt's interest in a home which is the sole or principal home of the bankrupt, the bankrupt's spouse or a former spouse. After this period it will revert back to the bankrupt (i.e. it will no longer form part of the bankruptcy estate).
Harsher penalties will be imposed on those who are considered to have brought about their bankruptcy through reckless or irresponsible behaviour.
Bankruptcy Restriction Orders may be applied for by the Official Receiver for
failing to keep or produce records;
incurring a debt prior to the bankruptcy that the bankrupt had no reasonable expectation of being able to repay
carrying on any gambling or rash or hazardous speculation or unreasonable extravagance which may have materially contributed to or or increased the extent of the bankruptcy debt.
Restrictions after bankruptcy could last for a further two to fifteen years.
The cost of a petition to be made bankrupt has also changed from £390 rising to £460.
Bankruptcy - The process
If a creditor wishes to make you bankrupt they must prove that you are unable to pay your debts or that you have no reasonable prospect of doing so.Once the creditor has sent a petition to the court, a hearing takes place and an order is made if the court feels that this is the appropriate outcome.An Official Receiver is then appointed. The Receiver will make an application to the court claiming any income that exceeds the amount you need to cover essential living costs for yourself and your family.The Official Receiver can also claim your property and any other assets you have. After a minimum period of one year you will no longer be liable for the debts included within the bankruptcy.
Bankruptcy - The Advantages and Disadvantages
What are the advantages of bankruptcy?For the person involved, bankruptcy provides relative peace of mind and possible automatic discharge after one year.For the creditors, bankruptcy allows a full investigation of the debtor's affairs to be carried out.
What are the disadvantages of bankruptcy?
You lose control of your assets - this may include your house and vehicle.
You cannot obtain credit for more than £500 without permission from the lender.
Certain occupations and professions will not allow you to go bankrupt.
You cannot act as a company director.
You cannot take any part in the promotion, formation or management of a limited company without the permission of the court.
You cannot trade in any business under any other name unless you inform all persons concerned of the bankruptcy.
Their may be restrictions on you practicing as a Chartered Accountant / Lawyer.
You may not act as a Justice of the Peace (JP) or school governor.
You may not become a Member of Parliament.
You may not become a member of the local authority.
Your credit is affected for many years after the annulment.
You may be publicly examined in court.
Credit Secrets Bible ! The #1 Credit Course In America Click Here!
Everything You Know Is Wrong! About Being Debt Free That Is!! And It Will Keep You In Debt The Rest Of Your Life! Click Here!
Credit Repair Secrets Revealed! Credit Repair Is A Hot Topic Click Here!
Guaranteed Bad Credit Financing. Receive A Loan Or Credit Card Even With Bankruptcy!
Click Here!
Living On A Dime - Financial Independence Through Better Life Choices. Publisher Of E-books About Paying Off Debt, Saving Money, Frugal Cooking And Homemaking. Click Here!
Eliminate Debt Fast Without Bankruptcy Or Debt Consolidation. Click Here To Learn The Amazing Secrets Of How I Got Rid Of $63,000 Of Debt In Only 4 Months Without Filing Bankruptcy Or Using Any Type Of Debt Consolidation Service! Click Here!
My Miracle Loans Learn How To Easily Borrow Up To $1 Million Cash In Less Than 7 Days All With No Credit Check, No Collateral, No Proof Of Income, And No Interest Fees! Click Here!
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Wednesday, 10 December 2008
Types of bailiff
Creditors use bailiffs because even though goods are rarely removed, the threat of seizure is usually sufficient to make people pay.
Types of bailiff
There are two main types of bailiff, County Court bailiffs and private bailiffs.
County Court bailiffs
They are employees of the County Court, and enforce County Court judgements. These are usually for consumer credit debts such as bank loans, credit cards etc.
Private bailiffs
They are private firms used by the Magistrates Court to collect fines, and by local councils (once they have obtained a liability order from the Magistrates Court) to collect Council Tax and Community Charge.
Bailiffs must carry an identity card and show it on request.
County Court judgement debts, Council Tax, Community Charge and fines can be collected anywhere in England and Wales.
County Court judgement debts and fines can be collected at any time of the day.
Council Tax debts should only be collected between 8.00 am – 6.00 pm Monday to Saturday, unless there are exceptional circumstances.
What are bailiffs used for?
Bailiffs can be used as a method of enforcement if payments on a court order are not maintained. The court can instruct a bailiff to seize the debtor's possessions.
Walking possession agreement
A bailiff can force entry and seize goods if a debtor defaults on a walking possession agreement. A walking possession agreement can only be made when the bailiff has:
Gained entry into your property and siezed goods
Identified goods belonging to you outside your property ie: a fully bought and paid for car.
Refusing entry
Generally bailiffs cannot break into domestic premises.
For both Council Tax collection and County Court fines, if the bailiff has not previously gained peaceful entry the debtor can refuse entry. The bailiff cannot force entry. A bailiff will normally return and again try to gain entry.
From 2005, a bailiff acting on behalf of the Magistrates Court can use reasonable force to gain entry if they are refused entry or if you are not in when they call. (A bailiff can walk through an open door, climb over a garden wall, enter through an unlocked door or climb through an open window.)
Which goods can or cannot be seized?
Not all goods can be seized.
Goods which can be seized
The bailiff can only seize goods which belong to the debtor. However, the bailiff can seize goods which are jointly owned even if the other joint owner is not liable for the debt.
Goods which cannot be seized
The bailiff cannot seize the following:
- Goods which solely belong to another person
- Fixtures and fittings
- Goods on hire purchase
- Goods which are rented
If the bailiff is collecting a County Court judgement debt, Council Tax, or Community Charge (Poll Tax) the following goods cannot be seized:
clothing
bedding
furniture
household equipment, or
provisions as are necessary for satisfying the basic domestic needs of the debtor and his/her family
tools, books, vehicles, and other items of employment as are necessary to the debtor for use personally in their employment, business and vocation
If the bailiff is collecting a fine the following goods cannot be seized:
clothes and bedding of the debtor and his/her family
tools and implements of the debtor’s trade
Warrant not enforceable
If the warrant to seize goods cannot be enforced, the next course of action will depend upon the type of debt.
County Court judgement debts
The warrant will be returned to the County Court. The creditor must decide whether or not it is cost-effective to ask the bailiff to visit again.
Council Tax debts
The warrant will be returned to the City Council who will decide which of the following courses of action to take:
Committal proceedings. The debtor will be summonsed to the Magistrate’s Court for a means enquiry to decide how much the debtor can pay and/or whether or not they should be imprisoned.
Attachment of earnings order. If the Revenues Office has details of the debtor’s employment they may ask for a deduction from the wages of the debtor.
Payment arrangement. If there are special circumstances a new payment arrangement may be agreed.
Outstanding fines
The warrant will be returned to the Magistrate’s Court and committal proceedings will be commenced. The debtor will be summonsed to the Magistrate’s Court for a means enquiry to decide how much the debtor can pay and/or whether or not they should be imprisoned.
Remember: You can always seek advice about any difficulty you are having in dealing with your debt.
Credit Secrets Bible ! The #1 Credit Course In America Click Here!
Everything You Know Is Wrong! About Being Debt Free That Is!! And It Will Keep You In Debt The Rest Of Your Life! Click Here!
Credit Repair Secrets Revealed! Credit Repair Is A Hot Topic Click Here!
Guaranteed Bad Credit Financing. Receive A Loan Or Credit Card Even With Bankruptcy!
Click Here!
Living On A Dime - Financial Independence Through Better Life Choices. Publisher Of E-books About Paying Off Debt, Saving Money, Frugal Cooking And Homemaking. Click Here!
Eliminate Debt Fast Without Bankruptcy Or Debt Consolidation. Click Here To Learn The Amazing Secrets Of How I Got Rid Of $63,000 Of Debt In Only 4 Months Without Filing Bankruptcy Or Using Any Type Of Debt Consolidation Service! Click Here!
My Miracle Loans Learn How To Easily Borrow Up To $1 Million Cash In Less Than 7 Days All With No Credit Check, No Collateral, No Proof Of Income, And No Interest Fees! Click Here!
Bad Credit Personal Loan Source. Bad Credit Personal Loans Regardless Of Bad Credit - Up To $25,000. Click Here!
Types of bailiff
There are two main types of bailiff, County Court bailiffs and private bailiffs.
County Court bailiffs
They are employees of the County Court, and enforce County Court judgements. These are usually for consumer credit debts such as bank loans, credit cards etc.
Private bailiffs
They are private firms used by the Magistrates Court to collect fines, and by local councils (once they have obtained a liability order from the Magistrates Court) to collect Council Tax and Community Charge.
Bailiffs must carry an identity card and show it on request.
County Court judgement debts, Council Tax, Community Charge and fines can be collected anywhere in England and Wales.
County Court judgement debts and fines can be collected at any time of the day.
Council Tax debts should only be collected between 8.00 am – 6.00 pm Monday to Saturday, unless there are exceptional circumstances.
What are bailiffs used for?
Bailiffs can be used as a method of enforcement if payments on a court order are not maintained. The court can instruct a bailiff to seize the debtor's possessions.
Walking possession agreement
A bailiff can force entry and seize goods if a debtor defaults on a walking possession agreement. A walking possession agreement can only be made when the bailiff has:
Gained entry into your property and siezed goods
Identified goods belonging to you outside your property ie: a fully bought and paid for car.
Refusing entry
Generally bailiffs cannot break into domestic premises.
For both Council Tax collection and County Court fines, if the bailiff has not previously gained peaceful entry the debtor can refuse entry. The bailiff cannot force entry. A bailiff will normally return and again try to gain entry.
From 2005, a bailiff acting on behalf of the Magistrates Court can use reasonable force to gain entry if they are refused entry or if you are not in when they call. (A bailiff can walk through an open door, climb over a garden wall, enter through an unlocked door or climb through an open window.)
Which goods can or cannot be seized?
Not all goods can be seized.
Goods which can be seized
The bailiff can only seize goods which belong to the debtor. However, the bailiff can seize goods which are jointly owned even if the other joint owner is not liable for the debt.
Goods which cannot be seized
The bailiff cannot seize the following:
- Goods which solely belong to another person
- Fixtures and fittings
- Goods on hire purchase
- Goods which are rented
If the bailiff is collecting a County Court judgement debt, Council Tax, or Community Charge (Poll Tax) the following goods cannot be seized:
clothing
bedding
furniture
household equipment, or
provisions as are necessary for satisfying the basic domestic needs of the debtor and his/her family
tools, books, vehicles, and other items of employment as are necessary to the debtor for use personally in their employment, business and vocation
If the bailiff is collecting a fine the following goods cannot be seized:
clothes and bedding of the debtor and his/her family
tools and implements of the debtor’s trade
Warrant not enforceable
If the warrant to seize goods cannot be enforced, the next course of action will depend upon the type of debt.
County Court judgement debts
The warrant will be returned to the County Court. The creditor must decide whether or not it is cost-effective to ask the bailiff to visit again.
Council Tax debts
The warrant will be returned to the City Council who will decide which of the following courses of action to take:
Committal proceedings. The debtor will be summonsed to the Magistrate’s Court for a means enquiry to decide how much the debtor can pay and/or whether or not they should be imprisoned.
Attachment of earnings order. If the Revenues Office has details of the debtor’s employment they may ask for a deduction from the wages of the debtor.
Payment arrangement. If there are special circumstances a new payment arrangement may be agreed.
Outstanding fines
The warrant will be returned to the Magistrate’s Court and committal proceedings will be commenced. The debtor will be summonsed to the Magistrate’s Court for a means enquiry to decide how much the debtor can pay and/or whether or not they should be imprisoned.
Remember: You can always seek advice about any difficulty you are having in dealing with your debt.
Credit Secrets Bible ! The #1 Credit Course In America Click Here!
Everything You Know Is Wrong! About Being Debt Free That Is!! And It Will Keep You In Debt The Rest Of Your Life! Click Here!
Credit Repair Secrets Revealed! Credit Repair Is A Hot Topic Click Here!
Guaranteed Bad Credit Financing. Receive A Loan Or Credit Card Even With Bankruptcy!
Click Here!
Living On A Dime - Financial Independence Through Better Life Choices. Publisher Of E-books About Paying Off Debt, Saving Money, Frugal Cooking And Homemaking. Click Here!
Eliminate Debt Fast Without Bankruptcy Or Debt Consolidation. Click Here To Learn The Amazing Secrets Of How I Got Rid Of $63,000 Of Debt In Only 4 Months Without Filing Bankruptcy Or Using Any Type Of Debt Consolidation Service! Click Here!
My Miracle Loans Learn How To Easily Borrow Up To $1 Million Cash In Less Than 7 Days All With No Credit Check, No Collateral, No Proof Of Income, And No Interest Fees! Click Here!
Bad Credit Personal Loan Source. Bad Credit Personal Loans Regardless Of Bad Credit - Up To $25,000. Click Here!
What is a credit reference agency?
Credit reference agencies hold information on details of credit agreements, arrears on credit and County Court judgements. Although you will often be warned that your name is about to be passed on to a credit reference agency a lender does not have to inform you that they are going to do this. County Court judgements will automatically be registered and are kept on record for a period of six years.
Credit reference agencies provide information so that a lender can make a decision about whether to lend you money. They do not have a ‘list’ of people who should not be given credit.
Credit scoring
When being considered for credit a lender may also take into account factors such as your age, occupation and whether you are a home owner. This is known as credit scoring. This may be an important part of the lender deciding whether to grant you credit. They may also look at your previous credit record. Each lender has its own policy guidelines which they follow when making lending decisions.
What do I do if I have been refused credit?
If you have been refused credit, you should ask the lender which credit reference agency was consulted. You can write to this agency enclosing £2 and ask for a copy of your file. They will need your name and any previous addresses that you have lived at in the past six years. If the information on your file is incorrect then you have a right to ask the agency to remove or correct the information. You do not have the right to have information removed if it is correct. The agency will leave the information on your file for up to six years. As there are two credit reference agencies in England and Wales you may want to check the information held by the other credit reference agency as well. The two main agencies are:
Experian Ltd
Consumer Help Service
PO Box 8000
Nottingham
NG1 5GX
Equifax Europe (UK) Ltd
Dept IE
PO Box 3001
Glasgow
G81 2DT
Go to Top
Can details of other people's credit be included on my file?
Credit reference agencies are no longer able to include information concerning people with different surnames when responding to a lender’s enquiry. This should mean that the details of credit belonging to previous occupants and third parties such as lodgers should not affect your credit rating. The exception is where there is evidence that
you are members of the same family
you are living as part of the same household
there is a financial connection between you.
Disassociation notices
If there is information on your file about people who are not members of your family or people you have no financial connection with you can write to the agency to "disassociate" yourself from them, explaining your reasons. If the agency refuses to accept your notice you can ask the Data Protection Register for help. The address is:
The Data Protection Register
Complaints Dept.,
Wycliffe House
Water Lane
Wimslow
Cheshire, SK9 5AF.
Can I appeal against a lender?
There is no right of appeal against a lender refusing you credit. Some companies are beginning to provide more details as to why you have been turned down which can help you to establish the reasons. However you are still only legally entitled to receive the name of the specific credit reference agency the lender consulted. You can always contact the company again if you have corrected any errors on your credit reference file, and ask them to look at your application again. Otherwise, it may be a case of shopping around for credit, making sure you are very careful to check the interest rates and terms of any loan you are offered.
Go to Top
Register of County Court judgements
If you are not sure whether you have any County Court judgements or whether the judgements have been registered, you can make a search against your name and address. Almost all County Court judgements are registered at the Registry Trust Limited.
Their address is :
The Registry Trust Limited
173-175 Cleveland Street
London, W1P 5PE.
There is a fee of £4.50 for a postal search of the register for each name and address searched.
Paying the judgement off
If your County Court judgement has been fully paid, you can ask the County Court in which the judgement was made to provide you with a "certification of satisfaction". There will be a fee payable of £10.00 for this and you will need to provide evidence to the court that the full balance including costs has been paid. The court will then automatically mark your entry on the register as satisfied. The judgement will stay on the register for six years. It will only be removed:
If you pay off the debt within one month of it being entered on the register.
The judgement is "set aside" by the court. This is only possible in very limited circumstances, for example if you didn’t receive the court papers.
Remember: You can always seek advice about any difficulty you are having in dealing with your debts.
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Everything You Know Is Wrong! About Being Debt Free That Is!! And It Will Keep You In Debt The Rest Of Your Life! Click Here!
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Guaranteed Bad Credit Financing. Receive A Loan Or Credit Card Even With Bankruptcy!
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Living On A Dime - Financial Independence Through Better Life Choices. Publisher Of E-books About Paying Off Debt, Saving Money, Frugal Cooking And Homemaking. Click Here!
Eliminate Debt Fast Without Bankruptcy Or Debt Consolidation. Click Here To Learn The Amazing Secrets Of How I Got Rid Of $63,000 Of Debt In Only 4 Months Without Filing Bankruptcy Or Using Any Type Of Debt Consolidation Service! Click Here!
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Credit reference agencies provide information so that a lender can make a decision about whether to lend you money. They do not have a ‘list’ of people who should not be given credit.
Credit scoring
When being considered for credit a lender may also take into account factors such as your age, occupation and whether you are a home owner. This is known as credit scoring. This may be an important part of the lender deciding whether to grant you credit. They may also look at your previous credit record. Each lender has its own policy guidelines which they follow when making lending decisions.
What do I do if I have been refused credit?
If you have been refused credit, you should ask the lender which credit reference agency was consulted. You can write to this agency enclosing £2 and ask for a copy of your file. They will need your name and any previous addresses that you have lived at in the past six years. If the information on your file is incorrect then you have a right to ask the agency to remove or correct the information. You do not have the right to have information removed if it is correct. The agency will leave the information on your file for up to six years. As there are two credit reference agencies in England and Wales you may want to check the information held by the other credit reference agency as well. The two main agencies are:
Experian Ltd
Consumer Help Service
PO Box 8000
Nottingham
NG1 5GX
Equifax Europe (UK) Ltd
Dept IE
PO Box 3001
Glasgow
G81 2DT
Go to Top
Can details of other people's credit be included on my file?
Credit reference agencies are no longer able to include information concerning people with different surnames when responding to a lender’s enquiry. This should mean that the details of credit belonging to previous occupants and third parties such as lodgers should not affect your credit rating. The exception is where there is evidence that
you are members of the same family
you are living as part of the same household
there is a financial connection between you.
Disassociation notices
If there is information on your file about people who are not members of your family or people you have no financial connection with you can write to the agency to "disassociate" yourself from them, explaining your reasons. If the agency refuses to accept your notice you can ask the Data Protection Register for help. The address is:
The Data Protection Register
Complaints Dept.,
Wycliffe House
Water Lane
Wimslow
Cheshire, SK9 5AF.
Can I appeal against a lender?
There is no right of appeal against a lender refusing you credit. Some companies are beginning to provide more details as to why you have been turned down which can help you to establish the reasons. However you are still only legally entitled to receive the name of the specific credit reference agency the lender consulted. You can always contact the company again if you have corrected any errors on your credit reference file, and ask them to look at your application again. Otherwise, it may be a case of shopping around for credit, making sure you are very careful to check the interest rates and terms of any loan you are offered.
Go to Top
Register of County Court judgements
If you are not sure whether you have any County Court judgements or whether the judgements have been registered, you can make a search against your name and address. Almost all County Court judgements are registered at the Registry Trust Limited.
Their address is :
The Registry Trust Limited
173-175 Cleveland Street
London, W1P 5PE.
There is a fee of £4.50 for a postal search of the register for each name and address searched.
Paying the judgement off
If your County Court judgement has been fully paid, you can ask the County Court in which the judgement was made to provide you with a "certification of satisfaction". There will be a fee payable of £10.00 for this and you will need to provide evidence to the court that the full balance including costs has been paid. The court will then automatically mark your entry on the register as satisfied. The judgement will stay on the register for six years. It will only be removed:
If you pay off the debt within one month of it being entered on the register.
The judgement is "set aside" by the court. This is only possible in very limited circumstances, for example if you didn’t receive the court papers.
Remember: You can always seek advice about any difficulty you are having in dealing with your debts.
Credit Secrets Bible ! The #1 Credit Course In America Click Here!
Everything You Know Is Wrong! About Being Debt Free That Is!! And It Will Keep You In Debt The Rest Of Your Life! Click Here!
Credit Repair Secrets Revealed! Credit Repair Is A Hot Topic Click Here!
Guaranteed Bad Credit Financing. Receive A Loan Or Credit Card Even With Bankruptcy!
Click Here!
Living On A Dime - Financial Independence Through Better Life Choices. Publisher Of E-books About Paying Off Debt, Saving Money, Frugal Cooking And Homemaking. Click Here!
Eliminate Debt Fast Without Bankruptcy Or Debt Consolidation. Click Here To Learn The Amazing Secrets Of How I Got Rid Of $63,000 Of Debt In Only 4 Months Without Filing Bankruptcy Or Using Any Type Of Debt Consolidation Service! Click Here!
My Miracle Loans Learn How To Easily Borrow Up To $1 Million Cash In Less Than 7 Days All With No Credit Check, No Collateral, No Proof Of Income, And No Interest Fees! Click Here!
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What is bankrupcy?
Bankruptcy is a way of dealing with debts that you cannot pay. Whilst you are bankrupt assets that you own might be used to pay off your debts. After a period of time (usually 12 months) all your outstanding debts are written off. The effects of going bankrupt are the same whether you file your own petition or are made bankrupt.
Changes to bankruptcy law under The Enterprise Act 2002
The Enterprise Act was introduced on 1 April 2004 in the UK, and changed insolvency law. Most of the changes came into force on 1 April 2004.
Prior to the Enterprise Ace bankruptcies lasted either 2 or 3 years depending on the value of the debts. Now every first-time bankrupt is discharged automatically within 12 months.
Pre Enterprise Act
If you have been made bankrupt before you will not be automatically discharged after 12 months. If you were made bankrupt at any time in the 15 years before your current bankruptcy order was made, you will be discharged on the earlier of 5 years from 1 April 2004 (i.e. 1 April 2009) or any earlier discharge date ordered by the court. You may apply to the court for your discharge 5 years after the date of the present bankruptcy order, if this date falls before 1 April 2009.
Your home
Under the law prior to 1st April 2004, if you own or have a financial interest in a property at the date of your bankruptcy order, it may be sold to pay your debts. When you are made bankrupt, your financial interest in a property automatically transfers to the trustee in bankruptcy (who may be an insolvency practitioner or the Official Receiver). The trustee will then recover any value in your interest in the property for the benefit of creditors. This can take place any time after your bankruptcy order has been made and is not affected by your date of discharge.
Post Enterprise Act
Under the Enterprise Act, the trustee has 3 years from 1 April 2004 (or the date you file for bankruptcy) to deal with your interest in any home that was your only or main residence (or that of your spouse or former spouse) at the date of your bankruptcy order. The trustee has the options of:
Selling it.
Applying for an order for sale.
Applying for an order for possession.
Applying for a charging order against the property.
Reaching a formal agreement with you that the property does not form part of your bankruptcy estate.
There is an exception to this rule when the trustee was unaware of your interest in a property before 1 April 2004. In this case, if you notified the trustee of the interest by 1 July 2004, the trustee has to deal with it by 1 April 2007. If you failed to notify the trustee by 1 July 2004, the trustee will have three years to deal with it from the date on which he or she becomes aware of that interest.
Income payments orders
You may apply to court to have an income payments order varied or stopped.
Income payment arrangements agreed with the Official Receiver will continue for 36 monthly payments unless your circumstances change.
Go to Top
Filing your own petition
You can make yourself bankrupt.
Obtain a form from your local County Court offices. It costs £345 plus £150 court fee, payable when you submit your form to the court. You may get help with the fee if you are on a low income.
Once the application is filed you are given a date for a hearing in front of a District Judge, which is often on the same day. The judge decides whether it is appropriate to make the order.
If the order is made you will then be required to see the Official Receiver. The Official Receiver will want to go through all your personal details with you such as National Insurance number, and pension policy details. This is usually by phone.
Once you have gone bankrupt any property that you own, including your home gets ‘vested’ in the Official Receiver, or if you have substantial assets, an appointed trustee. This gives them a legal interest in the property, which enables them to sell it.
Assets
Once the bankruptcy order is made the Official Receiver or appointed trustee may wish to sell assets.
Your assets are referred to as your estate but certain goods are exempt from inclusion. These are things such as:
Clothing.
Bedding.
Furniture and household equipment for basic domestic needs.
Items necessary for you to carry on your employment can be excluded e.g. tools, books or vehicles.
If you have valuable household items such as antiques or stereo equipment these could be sold in order to raise money. Your car might be sold if it is valuable but if it is necessary for your employment if may be exampt.
Go to Top
Your home and other property
If you own property and there is any equity (value) in it, it might be sold.
If the property is your family home the sale can be delayed for 12 months to give you time to find somewhere else to live.
With jointly owned property the Official Receiver is usually only entitled to the bankrupt person's share of the equity. It may be possible for the joint owner to make an offer to the Official Receiver to buy out the other person's share of the equity.
If there is no equity in the property then the Official Receiver may not want to sell it immediately. If you have a mortgage on the property you need to keep making the monthly payments to stop the bank/building society taking possession action.
If a property has not been sold at the end of the bankruptcy period the property must "revest" in the owner ie, she/he recovers legal rights over it. However to protect unpaid creditors a charge may be placed on the property. The debts then become secured on the property and are paid off if there is sufficient equity when the property is sold.
Will I have to pay anything from my wages?
This will only happen if your income is above average and it appears that you might have surplus income. The Official Receiver can look at your income and expenditure and decide if payments should be made and at what level.
When looking at how much you could pay they will take into account essential expenses such as your mortgage and housekeeping. If you will not pay voluntarily, the court can order you to pay.
The effects of bankruptcy
Bankruptcy affects your financial affairs in a number of ways:
Obtaining credit
You must declare your bankruptcy if you want to obtain credit of more than £500.
Go to Top
Bank accounts
You will have to close your bank account when you are made bankrupt. The bank may allow you to open another account.
Fuel and other utilities
Gas/electricity and phone companies usually want you to pay in a way that does not involve you having credit. This might be a pre-payment plan or meter, or by demanding a large deposit. If you live with a spouse or partner you could transfer the account to their name.
Your business
A business that is trading will normally close down. You can continue to be self-employed but some people find it difficult if it is the type of work which involves getting credit for more than £500. This can include having time to settle bills e.g. 30 days to pay.
Employment
Some types of employment may be affected.
If you belong to a professional body which prohibits bankruptcy you could be struck off, e.g. solicitors.
If you work in the finance industry you will lose your consumer credit licence.
Whilst you are bankrupt you cannot be a director of a company or hold a public office.
Offences
Previous actions may be considered an offence in bankruptcy and you could be fined or in some circumstances imprisoned. Examples of offences include:
Not keeping proper accounts for your business for up to two years before the bankruptcy.
Concealing ownership of property from the Official Receiver.
Giving property away to avoid it being included in the bankruptcy
Obtaining credit of £500 or more without telling the lender that you are bankrupt
Go to Top
After the bankruptcy period
Even after the bankruptcy period you may find it difficult to obtain credit. The bankruptcy order will be registered with credit reference agencies for 6 years and even after this time you may be asked whether you have ever been bankrupt when applying for some credit such as a mortgage.
Individual voluntary arrangements
An individual voluntary arrangement (IVA) is arranged through the courts and can be a way of avoiding bankruptcy. To get an IVA you need to be able to raise a lump sum of money or to make regular payments from your income to your creditors.
Arranging an IVA
You need to find an insolvency practitioner who is prepared to act for you.
The insolvency practitioner prepares a proposal to put forward to your creditors. The creditors who together are owed 75% of your debt must agree to accept it as a full and final settlement. If it is for payments from your income the arrangement will usually last for two to three years. If the arrangement is not kept to then the practitioner or the creditors can apply for a bankruptcy order to be made.
Insolvency practitioner fees can be expensive and some will want some payment in advance. It is worth asking several practitioners what their charges are before asking them to act for you. You can obtain names of local practitioners by contacting the court offices or Official Receivers office for your area.
Remember: You can always seek advice about any difficulty you are having in dealing with your debts.
Credit Secrets Bible ! The #1 Credit Course In America Click Here!
Everything You Know Is Wrong! About Being Debt Free That Is!! And It Will Keep You In Debt The Rest Of Your Life! Click Here!
Credit Repair Secrets Revealed! Credit Repair Is A Hot Topic Click Here!
Guaranteed Bad Credit Financing. Receive A Loan Or Credit Card Even With Bankruptcy!
Click Here!
Living On A Dime - Financial Independence Through Better Life Choices. Publisher Of E-books About Paying Off Debt, Saving Money, Frugal Cooking And Homemaking. Click Here!
Eliminate Debt Fast Without Bankruptcy Or Debt Consolidation. Click Here To Learn The Amazing Secrets Of How I Got Rid Of $63,000 Of Debt In Only 4 Months Without Filing Bankruptcy Or Using Any Type Of Debt Consolidation Service! Click Here!
My Miracle Loans Learn How To Easily Borrow Up To $1 Million Cash In Less Than 7 Days All With No Credit Check, No Collateral, No Proof Of Income, And No Interest Fees! Click Here!
Bad Credit Personal Loan Source. Bad Credit Personal Loans Regardless Of Bad Credit - Up To $25,000. Click Here!
Changes to bankruptcy law under The Enterprise Act 2002
The Enterprise Act was introduced on 1 April 2004 in the UK, and changed insolvency law. Most of the changes came into force on 1 April 2004.
Prior to the Enterprise Ace bankruptcies lasted either 2 or 3 years depending on the value of the debts. Now every first-time bankrupt is discharged automatically within 12 months.
Pre Enterprise Act
If you have been made bankrupt before you will not be automatically discharged after 12 months. If you were made bankrupt at any time in the 15 years before your current bankruptcy order was made, you will be discharged on the earlier of 5 years from 1 April 2004 (i.e. 1 April 2009) or any earlier discharge date ordered by the court. You may apply to the court for your discharge 5 years after the date of the present bankruptcy order, if this date falls before 1 April 2009.
Your home
Under the law prior to 1st April 2004, if you own or have a financial interest in a property at the date of your bankruptcy order, it may be sold to pay your debts. When you are made bankrupt, your financial interest in a property automatically transfers to the trustee in bankruptcy (who may be an insolvency practitioner or the Official Receiver). The trustee will then recover any value in your interest in the property for the benefit of creditors. This can take place any time after your bankruptcy order has been made and is not affected by your date of discharge.
Post Enterprise Act
Under the Enterprise Act, the trustee has 3 years from 1 April 2004 (or the date you file for bankruptcy) to deal with your interest in any home that was your only or main residence (or that of your spouse or former spouse) at the date of your bankruptcy order. The trustee has the options of:
Selling it.
Applying for an order for sale.
Applying for an order for possession.
Applying for a charging order against the property.
Reaching a formal agreement with you that the property does not form part of your bankruptcy estate.
There is an exception to this rule when the trustee was unaware of your interest in a property before 1 April 2004. In this case, if you notified the trustee of the interest by 1 July 2004, the trustee has to deal with it by 1 April 2007. If you failed to notify the trustee by 1 July 2004, the trustee will have three years to deal with it from the date on which he or she becomes aware of that interest.
Income payments orders
You may apply to court to have an income payments order varied or stopped.
Income payment arrangements agreed with the Official Receiver will continue for 36 monthly payments unless your circumstances change.
Go to Top
Filing your own petition
You can make yourself bankrupt.
Obtain a form from your local County Court offices. It costs £345 plus £150 court fee, payable when you submit your form to the court. You may get help with the fee if you are on a low income.
Once the application is filed you are given a date for a hearing in front of a District Judge, which is often on the same day. The judge decides whether it is appropriate to make the order.
If the order is made you will then be required to see the Official Receiver. The Official Receiver will want to go through all your personal details with you such as National Insurance number, and pension policy details. This is usually by phone.
Once you have gone bankrupt any property that you own, including your home gets ‘vested’ in the Official Receiver, or if you have substantial assets, an appointed trustee. This gives them a legal interest in the property, which enables them to sell it.
Assets
Once the bankruptcy order is made the Official Receiver or appointed trustee may wish to sell assets.
Your assets are referred to as your estate but certain goods are exempt from inclusion. These are things such as:
Clothing.
Bedding.
Furniture and household equipment for basic domestic needs.
Items necessary for you to carry on your employment can be excluded e.g. tools, books or vehicles.
If you have valuable household items such as antiques or stereo equipment these could be sold in order to raise money. Your car might be sold if it is valuable but if it is necessary for your employment if may be exampt.
Go to Top
Your home and other property
If you own property and there is any equity (value) in it, it might be sold.
If the property is your family home the sale can be delayed for 12 months to give you time to find somewhere else to live.
With jointly owned property the Official Receiver is usually only entitled to the bankrupt person's share of the equity. It may be possible for the joint owner to make an offer to the Official Receiver to buy out the other person's share of the equity.
If there is no equity in the property then the Official Receiver may not want to sell it immediately. If you have a mortgage on the property you need to keep making the monthly payments to stop the bank/building society taking possession action.
If a property has not been sold at the end of the bankruptcy period the property must "revest" in the owner ie, she/he recovers legal rights over it. However to protect unpaid creditors a charge may be placed on the property. The debts then become secured on the property and are paid off if there is sufficient equity when the property is sold.
Will I have to pay anything from my wages?
This will only happen if your income is above average and it appears that you might have surplus income. The Official Receiver can look at your income and expenditure and decide if payments should be made and at what level.
When looking at how much you could pay they will take into account essential expenses such as your mortgage and housekeeping. If you will not pay voluntarily, the court can order you to pay.
The effects of bankruptcy
Bankruptcy affects your financial affairs in a number of ways:
Obtaining credit
You must declare your bankruptcy if you want to obtain credit of more than £500.
Go to Top
Bank accounts
You will have to close your bank account when you are made bankrupt. The bank may allow you to open another account.
Fuel and other utilities
Gas/electricity and phone companies usually want you to pay in a way that does not involve you having credit. This might be a pre-payment plan or meter, or by demanding a large deposit. If you live with a spouse or partner you could transfer the account to their name.
Your business
A business that is trading will normally close down. You can continue to be self-employed but some people find it difficult if it is the type of work which involves getting credit for more than £500. This can include having time to settle bills e.g. 30 days to pay.
Employment
Some types of employment may be affected.
If you belong to a professional body which prohibits bankruptcy you could be struck off, e.g. solicitors.
If you work in the finance industry you will lose your consumer credit licence.
Whilst you are bankrupt you cannot be a director of a company or hold a public office.
Offences
Previous actions may be considered an offence in bankruptcy and you could be fined or in some circumstances imprisoned. Examples of offences include:
Not keeping proper accounts for your business for up to two years before the bankruptcy.
Concealing ownership of property from the Official Receiver.
Giving property away to avoid it being included in the bankruptcy
Obtaining credit of £500 or more without telling the lender that you are bankrupt
Go to Top
After the bankruptcy period
Even after the bankruptcy period you may find it difficult to obtain credit. The bankruptcy order will be registered with credit reference agencies for 6 years and even after this time you may be asked whether you have ever been bankrupt when applying for some credit such as a mortgage.
Individual voluntary arrangements
An individual voluntary arrangement (IVA) is arranged through the courts and can be a way of avoiding bankruptcy. To get an IVA you need to be able to raise a lump sum of money or to make regular payments from your income to your creditors.
Arranging an IVA
You need to find an insolvency practitioner who is prepared to act for you.
The insolvency practitioner prepares a proposal to put forward to your creditors. The creditors who together are owed 75% of your debt must agree to accept it as a full and final settlement. If it is for payments from your income the arrangement will usually last for two to three years. If the arrangement is not kept to then the practitioner or the creditors can apply for a bankruptcy order to be made.
Insolvency practitioner fees can be expensive and some will want some payment in advance. It is worth asking several practitioners what their charges are before asking them to act for you. You can obtain names of local practitioners by contacting the court offices or Official Receivers office for your area.
Remember: You can always seek advice about any difficulty you are having in dealing with your debts.
Credit Secrets Bible ! The #1 Credit Course In America Click Here!
Everything You Know Is Wrong! About Being Debt Free That Is!! And It Will Keep You In Debt The Rest Of Your Life! Click Here!
Credit Repair Secrets Revealed! Credit Repair Is A Hot Topic Click Here!
Guaranteed Bad Credit Financing. Receive A Loan Or Credit Card Even With Bankruptcy!
Click Here!
Living On A Dime - Financial Independence Through Better Life Choices. Publisher Of E-books About Paying Off Debt, Saving Money, Frugal Cooking And Homemaking. Click Here!
Eliminate Debt Fast Without Bankruptcy Or Debt Consolidation. Click Here To Learn The Amazing Secrets Of How I Got Rid Of $63,000 Of Debt In Only 4 Months Without Filing Bankruptcy Or Using Any Type Of Debt Consolidation Service! Click Here!
My Miracle Loans Learn How To Easily Borrow Up To $1 Million Cash In Less Than 7 Days All With No Credit Check, No Collateral, No Proof Of Income, And No Interest Fees! Click Here!
Bad Credit Personal Loan Source. Bad Credit Personal Loans Regardless Of Bad Credit - Up To $25,000. Click Here!
What is an administration order?
An administration order is a single County Court order on to which you put all of your debts. It allows you to make a single payment into the County Court, whic will then divide the money amongst the creditors listed on your application form.
What are the advantages of an administration order?
Whilst the order is in place, none of the creditors listed on it can take any action against you without first getting the court’s permission. Visits from debt collectors, letters or phone calls from your creditors, should stop once the administration order has been made.
Having an administration order can save you a lot of time and trouble as the court deals with your debts on your behalf.
It can also save you money if you were spending a lot on postage or on bus fares to make your payments.
If you apply for a composition order at the same time as you apply for your administration order, then the amount of time for which you pay is limited, usually to three years.
What is a composition order?
If you are only paying a very small amount to your creditors, there is the danger that your administration order could last for years.
A composition order is a way of trying to ensure that this does not happen. If the District Judge makes a composition order, it means that you only have to pay part of your debts, usually an amount that you could manage to pay over a three year period.
Any outstanding balances are treated as written off, although County Court judgements, and the fact that you had an administration order, still show up on your credit records.
Although the court should automatically consider whether it is appropriate to make a composition order in your case, you can use the "anything else you would like the court to take into account" box at the end of the form to say you would like a composition order.
If you still do not get a composition order, you can apply for one separately, by writing to the County Court to request a hearing. You should normally do this when you have made payments for six to eight months. You can then request a composition order at the hearing.
Who can apply?
You get an administration order if:
You have at least one County Court or High Court judgement against you.
The total of your debts is not more than £5000. (You may have heard that this limit is going to increase. Unfortunately, it is not likely that this is going to happen in the near future).
How do I apply?
You can apply for an administration order on form N92 which you can get from your local County Court office. It comes with some notes to help you complete it.
Put the name of your local County Court on the form. This may be a different court to the one in which your creditors have sued you.
The first page of the application form asks for a list of your debts. You should list them all, priority as well as non-priority, but make it clear if you have separate arrangements to cover your priorities in case these are excluded from the order.
Quote the account number, and the address to which the court can send your payments. If your creditors have passed the debts on to a solicitor or debt collection agency, give this as the address for payment.
The other pages ask for details of your family and employment circumstances, and details of your financial situation. This is similar to your personal budget sheet and you can simply transfer the information on to the form, using the spaces marked "Other" for expenses which aren’t listed elsewhere.
Complete the box saying what you can afford to pay, otherwise the court staff will decide for you. You can get an idea of how much you can afford by adding your pro rata payments together, or by using the available income figure on your personal budget sheet.
Do not sign the form at this stage. This is because you need to take it to the court yourself and sign the declaration in front of a court officer, to say that the information it contains is true to the best of your knowledge. The court officer may go through the information you have put down, and query anything that is not clear.
Keep a copy of your form, in case there are any problems.
What happens after I have submitted my application?
Once the court has accepted your application form, they will inform your creditors that you have applied for an administration order and sometimes give an indication of the type of order they would wish to make (ie stating payment level and whether a composition is envisaged).
Your creditors then have 16 days in which to inform the court of any objections that they may have, such as they think the offer you are making is too low, or they disagree with the amount you say they owe or they do not wish to be included in the order.
If no objections are received within this time, and the court staff are happy with what you have offered, then the order will be made. Provided you pay what you have offered, the creditors can take no further action.
Once the order is in place, you make your payments to the court and not to the creditors.
A hearing could also be necessary if it appears that it would take a long time to pay off the debts.
If there is any problem at all, the order should not be made or refused at this stage. A hearing should be arranged for you to attend at court, and a District Judge will consider your application. If creditors have objected, they, or their representative, may attend the hearing too. You should be given a chance to state your case, and if the problems are then resolved, the District Judge will make the order.
You must attend the hearing. If you cannot go, you should write to the court explaining the reasons why, and asking for a new date.
Take statements or letters from your creditors with you as the court may want to see proof of your debts.
If your application is turned down you should seek advice. You may have grounds for appealing or re-applying.
How long does an administration order last?
Unless the judge makes a composition order or you stop making regular payments, an administration order will go on until all the debts are paid off in full. Your creditors may ask the court for your payments to be reviewed, or you can apply to the court to vary the terms of the order if your circumstances change.
Problems with applying for an administration order
Your application should not be refused without a hearing. Here are some problems you might come across:
Some of my debts are in joint names
When you fill in the administration order application form, you state that another person borrowed the money with you, and put down their name and address.
You should still put down the total amount of the debt, and count it in full when deciding if your debts are under £5000. This is because when you borrow money with someone else, you are liable for the whole amount, not just for half each. This is known as ‘joint and several liability’.
This may cause problems if the other borrower is your partner, as the creditor will still be able to go to them for the money even if you get an administration order. If the other person also has a court judgement and debts of less than £5,000, they can apply for their own administration order.
Even if all your debts are in joint names you will still have to apply for an administration order for each person.
If you have only one court judgement between you, but it is in joint names, you can use the same judgement to make separate administration order applications.
I have not got any available income
Your application may be refused if the information on the form makes it look as if you do not have enough money to pay what you have offered.
Take a copy of your personal budget sheet to the hearing. If you have kept up payments on court judgements in the past you can tell the court this to show that you can afford the payments you have offered.
Tell the District Judge about any other circumstances you think she/he may not have taken into account.
If you have been turned down without a hearing, or you have had a hearing but still don’t know why the District Judge has refused you an administration order, you may be able to get an explanation by writing to the court. Address your letter to the Chief Clerk.
Other issues
Problems may arise regarding arrears of ongoing matters such as water, electricity, gas, council tax or rent.
If you have a fuel repayment meter which is set to collect arrears, it is possible to have the debt included in the order and the fuel board will need to remove this from your current setting and reset the meter to disregard arrears accordingly.
If you do not have a prepayment meter but wish to include fuel arrears in the order, the fuel board may insist on installing one to prevent the account from falling into arrears again.
In some instances arrears of all priority debts may be allowed in the administration order. It is important to include all details.
I cannot afford the payment I have been ordered to make
You can apply to change the amount you pay each month if you think the court has set your payments too high, or if you have a change of circumstances that means you have less available income.
You can use an N244 form, which is a general County Court application form. You can get one from your County Court office.
State that you wish to apply for a variation in the payments you are making under the administration order, and say why you are applying. You can attach a copy of your personal budget sheet to show how you have worked out your offer.
At present, there are no hard and fast rules for making an administration order application. Practices differ from court to court and area to area.
Remember: You can always seek advice about any difficulty you are having in dealing with with your debt.
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Everything You Know Is Wrong! About Being Debt Free That Is!! And It Will Keep You In Debt The Rest Of Your Life! Click Here!
Credit Repair Secrets Revealed! Credit Repair Is A Hot Topic Click Here!
Guaranteed Bad Credit Financing. Receive A Loan Or Credit Card Even With Bankruptcy!
Click Here!
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Eliminate Debt Fast Without Bankruptcy Or Debt Consolidation. Click Here To Learn The Amazing Secrets Of How I Got Rid Of $63,000 Of Debt In Only 4 Months Without Filing Bankruptcy Or Using Any Type Of Debt Consolidation Service! Click Here!
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What are the advantages of an administration order?
Whilst the order is in place, none of the creditors listed on it can take any action against you without first getting the court’s permission. Visits from debt collectors, letters or phone calls from your creditors, should stop once the administration order has been made.
Having an administration order can save you a lot of time and trouble as the court deals with your debts on your behalf.
It can also save you money if you were spending a lot on postage or on bus fares to make your payments.
If you apply for a composition order at the same time as you apply for your administration order, then the amount of time for which you pay is limited, usually to three years.
What is a composition order?
If you are only paying a very small amount to your creditors, there is the danger that your administration order could last for years.
A composition order is a way of trying to ensure that this does not happen. If the District Judge makes a composition order, it means that you only have to pay part of your debts, usually an amount that you could manage to pay over a three year period.
Any outstanding balances are treated as written off, although County Court judgements, and the fact that you had an administration order, still show up on your credit records.
Although the court should automatically consider whether it is appropriate to make a composition order in your case, you can use the "anything else you would like the court to take into account" box at the end of the form to say you would like a composition order.
If you still do not get a composition order, you can apply for one separately, by writing to the County Court to request a hearing. You should normally do this when you have made payments for six to eight months. You can then request a composition order at the hearing.
Who can apply?
You get an administration order if:
You have at least one County Court or High Court judgement against you.
The total of your debts is not more than £5000. (You may have heard that this limit is going to increase. Unfortunately, it is not likely that this is going to happen in the near future).
How do I apply?
You can apply for an administration order on form N92 which you can get from your local County Court office. It comes with some notes to help you complete it.
Put the name of your local County Court on the form. This may be a different court to the one in which your creditors have sued you.
The first page of the application form asks for a list of your debts. You should list them all, priority as well as non-priority, but make it clear if you have separate arrangements to cover your priorities in case these are excluded from the order.
Quote the account number, and the address to which the court can send your payments. If your creditors have passed the debts on to a solicitor or debt collection agency, give this as the address for payment.
The other pages ask for details of your family and employment circumstances, and details of your financial situation. This is similar to your personal budget sheet and you can simply transfer the information on to the form, using the spaces marked "Other" for expenses which aren’t listed elsewhere.
Complete the box saying what you can afford to pay, otherwise the court staff will decide for you. You can get an idea of how much you can afford by adding your pro rata payments together, or by using the available income figure on your personal budget sheet.
Do not sign the form at this stage. This is because you need to take it to the court yourself and sign the declaration in front of a court officer, to say that the information it contains is true to the best of your knowledge. The court officer may go through the information you have put down, and query anything that is not clear.
Keep a copy of your form, in case there are any problems.
What happens after I have submitted my application?
Once the court has accepted your application form, they will inform your creditors that you have applied for an administration order and sometimes give an indication of the type of order they would wish to make (ie stating payment level and whether a composition is envisaged).
Your creditors then have 16 days in which to inform the court of any objections that they may have, such as they think the offer you are making is too low, or they disagree with the amount you say they owe or they do not wish to be included in the order.
If no objections are received within this time, and the court staff are happy with what you have offered, then the order will be made. Provided you pay what you have offered, the creditors can take no further action.
Once the order is in place, you make your payments to the court and not to the creditors.
A hearing could also be necessary if it appears that it would take a long time to pay off the debts.
If there is any problem at all, the order should not be made or refused at this stage. A hearing should be arranged for you to attend at court, and a District Judge will consider your application. If creditors have objected, they, or their representative, may attend the hearing too. You should be given a chance to state your case, and if the problems are then resolved, the District Judge will make the order.
You must attend the hearing. If you cannot go, you should write to the court explaining the reasons why, and asking for a new date.
Take statements or letters from your creditors with you as the court may want to see proof of your debts.
If your application is turned down you should seek advice. You may have grounds for appealing or re-applying.
How long does an administration order last?
Unless the judge makes a composition order or you stop making regular payments, an administration order will go on until all the debts are paid off in full. Your creditors may ask the court for your payments to be reviewed, or you can apply to the court to vary the terms of the order if your circumstances change.
Problems with applying for an administration order
Your application should not be refused without a hearing. Here are some problems you might come across:
Some of my debts are in joint names
When you fill in the administration order application form, you state that another person borrowed the money with you, and put down their name and address.
You should still put down the total amount of the debt, and count it in full when deciding if your debts are under £5000. This is because when you borrow money with someone else, you are liable for the whole amount, not just for half each. This is known as ‘joint and several liability’.
This may cause problems if the other borrower is your partner, as the creditor will still be able to go to them for the money even if you get an administration order. If the other person also has a court judgement and debts of less than £5,000, they can apply for their own administration order.
Even if all your debts are in joint names you will still have to apply for an administration order for each person.
If you have only one court judgement between you, but it is in joint names, you can use the same judgement to make separate administration order applications.
I have not got any available income
Your application may be refused if the information on the form makes it look as if you do not have enough money to pay what you have offered.
Take a copy of your personal budget sheet to the hearing. If you have kept up payments on court judgements in the past you can tell the court this to show that you can afford the payments you have offered.
Tell the District Judge about any other circumstances you think she/he may not have taken into account.
If you have been turned down without a hearing, or you have had a hearing but still don’t know why the District Judge has refused you an administration order, you may be able to get an explanation by writing to the court. Address your letter to the Chief Clerk.
Other issues
Problems may arise regarding arrears of ongoing matters such as water, electricity, gas, council tax or rent.
If you have a fuel repayment meter which is set to collect arrears, it is possible to have the debt included in the order and the fuel board will need to remove this from your current setting and reset the meter to disregard arrears accordingly.
If you do not have a prepayment meter but wish to include fuel arrears in the order, the fuel board may insist on installing one to prevent the account from falling into arrears again.
In some instances arrears of all priority debts may be allowed in the administration order. It is important to include all details.
I cannot afford the payment I have been ordered to make
You can apply to change the amount you pay each month if you think the court has set your payments too high, or if you have a change of circumstances that means you have less available income.
You can use an N244 form, which is a general County Court application form. You can get one from your County Court office.
State that you wish to apply for a variation in the payments you are making under the administration order, and say why you are applying. You can attach a copy of your personal budget sheet to show how you have worked out your offer.
At present, there are no hard and fast rules for making an administration order application. Practices differ from court to court and area to area.
Remember: You can always seek advice about any difficulty you are having in dealing with with your debt.
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Working out a personal budget
If you are experiencing financial problems it is advisable to work out a personal budget, because it helps you to:
See how much money is coming into your household
See how much is money is going out
Work out offers to creditors and courts which you can afford
Plan your household budget
Plan for future needs
Four steps
There are four steps to working out a budget and deciding how much of your income you can use to pay off creditors.
If you take these steps, you should be able to present a very clear and current summary of your financial circumstances in a format that is easy for others to understand. The aim is to increase clarity in your communications with creditors or courts.
Step one: Money coming in
Step two: Money going out
Step three: Money left to make payments to creditors
Step four: Making payments to secondary consumer creditors
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Guaranteed Bad Credit Financing. Receive A Loan Or Credit Card Even With Bankruptcy!
Click Here!
Living On A Dime - Financial Independence Through Better Life Choices. Publisher Of E-books About Paying Off Debt, Saving Money, Frugal Cooking And Homemaking. Click Here!
Eliminate Debt Fast Without Bankruptcy Or Debt Consolidation. Click Here To Learn The Amazing Secrets Of How I Got Rid Of $63,000 Of Debt In Only 4 Months Without Filing Bankruptcy Or Using Any Type Of Debt Consolidation Service! Click Here!
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See how much money is coming into your household
See how much is money is going out
Work out offers to creditors and courts which you can afford
Plan your household budget
Plan for future needs
Four steps
There are four steps to working out a budget and deciding how much of your income you can use to pay off creditors.
If you take these steps, you should be able to present a very clear and current summary of your financial circumstances in a format that is easy for others to understand. The aim is to increase clarity in your communications with creditors or courts.
Step one: Money coming in
Step two: Money going out
Step three: Money left to make payments to creditors
Step four: Making payments to secondary consumer creditors
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Everything You Know Is Wrong! About Being Debt Free That Is!! And It Will Keep You In Debt The Rest Of Your Life! Click Here!
Credit Repair Secrets Revealed! Credit Repair Is A Hot Topic Click Here!
Guaranteed Bad Credit Financing. Receive A Loan Or Credit Card Even With Bankruptcy!
Click Here!
Living On A Dime - Financial Independence Through Better Life Choices. Publisher Of E-books About Paying Off Debt, Saving Money, Frugal Cooking And Homemaking. Click Here!
Eliminate Debt Fast Without Bankruptcy Or Debt Consolidation. Click Here To Learn The Amazing Secrets Of How I Got Rid Of $63,000 Of Debt In Only 4 Months Without Filing Bankruptcy Or Using Any Type Of Debt Consolidation Service! Click Here!
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Important points when dealing with debt
Do not ignore the problem: it won’t go away. The longer you wait to deal with it or to take advice the worse the situation will be.
Do not borrow more to pay off your debts: In most cases this is very unwise as it digs a deeper hole and it could mean putting your house at risk. If you are considering this talk to an independent adviser first.
If you have lost a job or are off sick: check whether you have insurance. Check that you are obtaining all the benefits you are entitled to. Talk to an adviser.
Work out your own personal budget: make sure you show it or send it to your creditors when you tell them about your difficulties.
Get in touch with your creditors: explain your difficulties.
Deal with your finances effectively and efficiently: make sure you pay your priority debts first, for example: debts which means you could lose your home - rent or mortgage, your liberty - fines or Council Tax, or have your fuel supplies cut off.
Use the information to work out a reasonable offer to repay the money owed: you should only offer to pay what you have the ability to pay and an amount you can regularly maintain. You must be able to maintain prompt and regular payments, no matter how small and not offer large amounts that will inevitably result in you not keeping to your word.
Contact everybody you owe money to: you must include every creditor or you will run into difficulties eventually.
Do not give up if at first you do not succeed: ask to speak to senior people if the first person is unhelpful.
Fill in reply forms to court papers and let the court have all the facts: this information will assist the court to resolve your dispute and decide what you can reasonably afford to pay. Civil Courts are not criminal courts.
Always attend court hearings: If you have a court hearing go along and take your budget sheet with you. Try to talk to an adviser.
Always keep copies of any letters or court forms you send or receive.
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Everything You Know Is Wrong! About Being Debt Free That Is!! And It Will Keep You In Debt The Rest Of Your Life! Click Here!
Credit Repair Secrets Revealed! Credit Repair Is A Hot Topic Click Here!
Guaranteed Bad Credit Financing. Receive A Loan Or Credit Card Even With Bankruptcy!
Click Here!
Living On A Dime - Financial Independence Through Better Life Choices. Publisher Of E-books About Paying Off Debt, Saving Money, Frugal Cooking And Homemaking. Click Here!
Eliminate Debt Fast Without Bankruptcy Or Debt Consolidation. Click Here To Learn The Amazing Secrets Of How I Got Rid Of $63,000 Of Debt In Only 4 Months Without Filing Bankruptcy Or Using Any Type Of Debt Consolidation Service! Click Here!
My Miracle Loans Learn How To Easily Borrow Up To $1 Million Cash In Less Than 7 Days All With No Credit Check, No Collateral, No Proof Of Income, And No Interest Fees! Click Here!
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Do not borrow more to pay off your debts: In most cases this is very unwise as it digs a deeper hole and it could mean putting your house at risk. If you are considering this talk to an independent adviser first.
If you have lost a job or are off sick: check whether you have insurance. Check that you are obtaining all the benefits you are entitled to. Talk to an adviser.
Work out your own personal budget: make sure you show it or send it to your creditors when you tell them about your difficulties.
Get in touch with your creditors: explain your difficulties.
Deal with your finances effectively and efficiently: make sure you pay your priority debts first, for example: debts which means you could lose your home - rent or mortgage, your liberty - fines or Council Tax, or have your fuel supplies cut off.
Use the information to work out a reasonable offer to repay the money owed: you should only offer to pay what you have the ability to pay and an amount you can regularly maintain. You must be able to maintain prompt and regular payments, no matter how small and not offer large amounts that will inevitably result in you not keeping to your word.
Contact everybody you owe money to: you must include every creditor or you will run into difficulties eventually.
Do not give up if at first you do not succeed: ask to speak to senior people if the first person is unhelpful.
Fill in reply forms to court papers and let the court have all the facts: this information will assist the court to resolve your dispute and decide what you can reasonably afford to pay. Civil Courts are not criminal courts.
Always attend court hearings: If you have a court hearing go along and take your budget sheet with you. Try to talk to an adviser.
Always keep copies of any letters or court forms you send or receive.
Credit Secrets Bible ! The #1 Credit Course In America Click Here!
Everything You Know Is Wrong! About Being Debt Free That Is!! And It Will Keep You In Debt The Rest Of Your Life! Click Here!
Credit Repair Secrets Revealed! Credit Repair Is A Hot Topic Click Here!
Guaranteed Bad Credit Financing. Receive A Loan Or Credit Card Even With Bankruptcy!
Click Here!
Living On A Dime - Financial Independence Through Better Life Choices. Publisher Of E-books About Paying Off Debt, Saving Money, Frugal Cooking And Homemaking. Click Here!
Eliminate Debt Fast Without Bankruptcy Or Debt Consolidation. Click Here To Learn The Amazing Secrets Of How I Got Rid Of $63,000 Of Debt In Only 4 Months Without Filing Bankruptcy Or Using Any Type Of Debt Consolidation Service! Click Here!
My Miracle Loans Learn How To Easily Borrow Up To $1 Million Cash In Less Than 7 Days All With No Credit Check, No Collateral, No Proof Of Income, And No Interest Fees! Click Here!
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Tuesday, 9 December 2008
Credit Score Repair
In excess of 30 million people in the USA have low credit scores (under 620) that mean they will be paying a high interest rate on loans. Millions of others have reasonable credit but with a little work could improve their scores and receive more favorable rates.
The first thing to do is find out exactly where you stand. You are probably well aware that you can get a free credit report once a year from each of the major 3 credit bureaus but you must purchase your credit score. Credit scores are the 3 digit number that represents an individual’s ability to repay loans on time. The numbers range from about 300 to 850, the higher the number the better the credit risk and therefore the lower the interest rate charged. Once you have determined where you are, you’re ready to make the changes necessary to improve your score.
Pay down or pay off your credit cards. At least get your balances below 30% of the credit limit on each card. Start with the ones that are closest to their limit
Use your cards wisely. A big balance will negatively affect your score even if you pay it off regularly.
Make sure that your lender is showing the correct credit limit. If your lender is showing a lower limit, your score may be artificially depressed
Make your credit card payment about a week in advance of your monthly closing statement.
Use the oldest of your cards. The older the credit history the better. Many consultants recommend that you charge a small amount to your oldest cards and pay it off in full before the monthly closing statement.
If you have been a good customer and for one reason or other made a late payment, you can write to your lender and request a ‘goodwill adjustment’ which erases your late payment from your report.
For more delinquent accounts you could make 12 payments on time and then ask the lender to ‘re-age’ your account, minimizing the affect past delinquencies have on your report.
If you had a fight with a creditor that eventually went to collections you can continue to protest that the charges were unjust or contact the credit bureaus and dispute the account as ‘not mine’. Collection agencies rarely bother to verify this if the amount is old and / or small enough.
Correct errors on your credit report.
There are a couple of other maneuvers to avoid:
Do not ask a creditor to lower your credit limit.
Do not make late payments
Do not consolidate your accounts. It is generally better to have small balances on a few cards than a large balance on one.
Do not apply for new credit that you don’t need.
Most of the above suggestions have a great affect when applied to mediocre or troubled credit. Scores in the 700 range a far more difficult to improve. If your credit score is in the ‘excellent’ category, (760 or higher) there is no point in concerning yourself with attempting to improve an already good thing. Sit back and take solace in the fact that you don’t have the worries that a lot of us do.
Credit Secrets Bible ! The #1 Credit Course In America Click Here!
Everything You Know Is Wrong! About Being Debt Free That Is!! And It Will Keep You In Debt The Rest Of Your Life! Click Here!
Credit Repair Secrets Revealed! Credit Repair Is A Hot Topic Click Here!
Guaranteed Bad Credit Financing. Receive A Loan Or Credit Card Even With Bankruptcy!
Click Here!
Living On A Dime - Financial Independence Through Better Life Choices. Publisher Of E-books About Paying Off Debt, Saving Money, Frugal Cooking And Homemaking. Click Here!
Eliminate Debt Fast Without Bankruptcy Or Debt Consolidation. Click Here To Learn The Amazing Secrets Of How I Got Rid Of $63,000 Of Debt In Only 4 Months Without Filing Bankruptcy Or Using Any Type Of Debt Consolidation Service! Click Here!
My Miracle Loans Learn How To Easily Borrow Up To $1 Million Cash In Less Than 7 Days All With No Credit Check, No Collateral, No Proof Of Income, And No Interest Fees! Click Here!
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The first thing to do is find out exactly where you stand. You are probably well aware that you can get a free credit report once a year from each of the major 3 credit bureaus but you must purchase your credit score. Credit scores are the 3 digit number that represents an individual’s ability to repay loans on time. The numbers range from about 300 to 850, the higher the number the better the credit risk and therefore the lower the interest rate charged. Once you have determined where you are, you’re ready to make the changes necessary to improve your score.
Pay down or pay off your credit cards. At least get your balances below 30% of the credit limit on each card. Start with the ones that are closest to their limit
Use your cards wisely. A big balance will negatively affect your score even if you pay it off regularly.
Make sure that your lender is showing the correct credit limit. If your lender is showing a lower limit, your score may be artificially depressed
Make your credit card payment about a week in advance of your monthly closing statement.
Use the oldest of your cards. The older the credit history the better. Many consultants recommend that you charge a small amount to your oldest cards and pay it off in full before the monthly closing statement.
If you have been a good customer and for one reason or other made a late payment, you can write to your lender and request a ‘goodwill adjustment’ which erases your late payment from your report.
For more delinquent accounts you could make 12 payments on time and then ask the lender to ‘re-age’ your account, minimizing the affect past delinquencies have on your report.
If you had a fight with a creditor that eventually went to collections you can continue to protest that the charges were unjust or contact the credit bureaus and dispute the account as ‘not mine’. Collection agencies rarely bother to verify this if the amount is old and / or small enough.
Correct errors on your credit report.
There are a couple of other maneuvers to avoid:
Do not ask a creditor to lower your credit limit.
Do not make late payments
Do not consolidate your accounts. It is generally better to have small balances on a few cards than a large balance on one.
Do not apply for new credit that you don’t need.
Most of the above suggestions have a great affect when applied to mediocre or troubled credit. Scores in the 700 range a far more difficult to improve. If your credit score is in the ‘excellent’ category, (760 or higher) there is no point in concerning yourself with attempting to improve an already good thing. Sit back and take solace in the fact that you don’t have the worries that a lot of us do.
Credit Secrets Bible ! The #1 Credit Course In America Click Here!
Everything You Know Is Wrong! About Being Debt Free That Is!! And It Will Keep You In Debt The Rest Of Your Life! Click Here!
Credit Repair Secrets Revealed! Credit Repair Is A Hot Topic Click Here!
Guaranteed Bad Credit Financing. Receive A Loan Or Credit Card Even With Bankruptcy!
Click Here!
Living On A Dime - Financial Independence Through Better Life Choices. Publisher Of E-books About Paying Off Debt, Saving Money, Frugal Cooking And Homemaking. Click Here!
Eliminate Debt Fast Without Bankruptcy Or Debt Consolidation. Click Here To Learn The Amazing Secrets Of How I Got Rid Of $63,000 Of Debt In Only 4 Months Without Filing Bankruptcy Or Using Any Type Of Debt Consolidation Service! Click Here!
My Miracle Loans Learn How To Easily Borrow Up To $1 Million Cash In Less Than 7 Days All With No Credit Check, No Collateral, No Proof Of Income, And No Interest Fees! Click Here!
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Credit after Bankruptcy
Credit after Bankruptcy
Listed below are the most popular ways of rebuild your credit after having filed for bankruptcy:
Credit Card after Bankruptcy
Apply for an unsecured credit card. Should you receive an unsecured card, use it for necessary purchases only and pay it off diligently. Always leave 50% of your available credit limit open to help quickly establish a decent credit score.
Secured Credit Card or Loan after Bankruptcy
Apply for a secured credit card. Your bank will require you to make a deposit in the amount of the credit available on the card. If you find yourself in this position it may be to your advantage to apply for a secured loan. Ask your banker to lend you money based on the deposit that you have made.
Installment Loan
Make sure that the loan is an installment loan, lasting 12 months or more. This will ensure that the loan is reported to the credit bureaus. Also talk to the banker to determine the lowest amount that they will lend. Some banks will not lend less than $10,000 in an installment loan. Small local banks often have lower installment loan limits.
Multiple Credit Lines after Bankruptcy
Don't apply for several credit cards at once when attempting to build your credit score. Multiple credit inquiries reflect negatively on your credit rating, further lowering your credit score.
Open checking and savings accounts to show creditors that you pay your bills and have cash available.
Obtain a credit card from a major department store that reports to credit agencies. Make small purchases and pay bills promptly. It won't help improve your credit score if the department store account you have doesn't report to the nations 3 major credit bureaus.
Credit Repair After Bankruptcy
Using credit wisely is essential to repairing credit after bankruptcy, as well as maintaining your credit score and your overall creditworthiness. It is important to keep all of your lines of credit in good standing so that you can quickly apply for more credit which will increase your credit rating.
Guidelines for Rebuilding Credit after Bankruptcy
Here are a few general guidelines to follow when rebuilding credit after bankruptcy.
Use your available credit only when cash is not acceptable, for example, use your credit cards to reserve hotel rooms or make airline reservations. Using credit to buy items you don't have cash for can put you back on the road to bankruptcy.
Pay bills on time to maintain a good credit history, and always pay more than the minimum payment. You should actually attempt to pay the total balance.
Keep the balance on your credit cards less than half of your available credit limit. If your balance is close to the available limit, your credit score may decrease.
Pay your mortgage on time, and be sure to never pay your mortgage more than 30 days past due.
Request your Credit Report
Creditors use credit reports to decide whether to extend credit. Many credit reports are rife with errors, so as you begin to re-establish your credit score, request a copy of your credit report on a regular basis from a credit reporting agency and review it for accuracy.
Be sure to dispute any inaccuracies that are on your report. Also, be sure that your credit report stays current and reflects accounts that are in good standing.
You also shouldn't just grab any secured card. Look for the following:
No application fee and reasonable annual fee. Some secured cards tack huge upfront and annual charges onto their accounts; you don’t need to pay these to build your credit.
Reports to the major credit bureaus. You’re not doing your credit score any good unless your payment history is being reported to the three major bureaus: Equifax, Experian and TransUnion. Call and ask if the card issuer regularly reports to all three before you apply.
Converts to an unsecured card after 12-18 months of on-time payments. Good behavior should get you upgraded to a regular credit card within a year or two.
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Listed below are the most popular ways of rebuild your credit after having filed for bankruptcy:
Credit Card after Bankruptcy
Apply for an unsecured credit card. Should you receive an unsecured card, use it for necessary purchases only and pay it off diligently. Always leave 50% of your available credit limit open to help quickly establish a decent credit score.
Secured Credit Card or Loan after Bankruptcy
Apply for a secured credit card. Your bank will require you to make a deposit in the amount of the credit available on the card. If you find yourself in this position it may be to your advantage to apply for a secured loan. Ask your banker to lend you money based on the deposit that you have made.
Installment Loan
Make sure that the loan is an installment loan, lasting 12 months or more. This will ensure that the loan is reported to the credit bureaus. Also talk to the banker to determine the lowest amount that they will lend. Some banks will not lend less than $10,000 in an installment loan. Small local banks often have lower installment loan limits.
Multiple Credit Lines after Bankruptcy
Don't apply for several credit cards at once when attempting to build your credit score. Multiple credit inquiries reflect negatively on your credit rating, further lowering your credit score.
Open checking and savings accounts to show creditors that you pay your bills and have cash available.
Obtain a credit card from a major department store that reports to credit agencies. Make small purchases and pay bills promptly. It won't help improve your credit score if the department store account you have doesn't report to the nations 3 major credit bureaus.
Credit Repair After Bankruptcy
Using credit wisely is essential to repairing credit after bankruptcy, as well as maintaining your credit score and your overall creditworthiness. It is important to keep all of your lines of credit in good standing so that you can quickly apply for more credit which will increase your credit rating.
Guidelines for Rebuilding Credit after Bankruptcy
Here are a few general guidelines to follow when rebuilding credit after bankruptcy.
Use your available credit only when cash is not acceptable, for example, use your credit cards to reserve hotel rooms or make airline reservations. Using credit to buy items you don't have cash for can put you back on the road to bankruptcy.
Pay bills on time to maintain a good credit history, and always pay more than the minimum payment. You should actually attempt to pay the total balance.
Keep the balance on your credit cards less than half of your available credit limit. If your balance is close to the available limit, your credit score may decrease.
Pay your mortgage on time, and be sure to never pay your mortgage more than 30 days past due.
Request your Credit Report
Creditors use credit reports to decide whether to extend credit. Many credit reports are rife with errors, so as you begin to re-establish your credit score, request a copy of your credit report on a regular basis from a credit reporting agency and review it for accuracy.
Be sure to dispute any inaccuracies that are on your report. Also, be sure that your credit report stays current and reflects accounts that are in good standing.
You also shouldn't just grab any secured card. Look for the following:
No application fee and reasonable annual fee. Some secured cards tack huge upfront and annual charges onto their accounts; you don’t need to pay these to build your credit.
Reports to the major credit bureaus. You’re not doing your credit score any good unless your payment history is being reported to the three major bureaus: Equifax, Experian and TransUnion. Call and ask if the card issuer regularly reports to all three before you apply.
Converts to an unsecured card after 12-18 months of on-time payments. Good behavior should get you upgraded to a regular credit card within a year or two.
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Bankruptcy Court
Bankruptcy is a Federal issue and as such bankruptcy court proceedings are not held in state court but in one of 94 Federal Judicial Districts.
The objective of a bankruptcy court is to give an honest debtor a "fresh start" by relieving them of the majority of their debt, and to effectively repay creditors an amount that the debtor has available for payment.
New Federal Bankruptcy Law
The new bankruptcy law will affect all people filing for bankruptcy. In addition to increased fees, the new federal bankruptcy law requires that individuals who file for bankruptcy must first go through credit counseling. It is felt that credit counseling will protect individuals from filing for bankruptcy unnecessarily.
Congress established the United States Trustees to further supervise and administrate bankruptcy proceedings.
United States Trustee Program
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, which opens a new era in the history of bankruptcy law and practice, was passed by Congress and signed into law by President Bush on April 20, 2005.
The United States Trustee Program is the component of the Department of Justice that protects the integrity of the nation's bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws.
The Act gives the U.S. Trustee Program new responsibilities in a number of areas, including:
Implementing the new “means test” to determine whether a debtor is eligible for chapter 7 (liquidation) or must file under chapter 13 (wage-earner repayment plan).
Supervising random audits and targeted audits to determine whether a chapter 7 debtor's bankruptcy documents are accurate;
Certifying entities to provide the credit counseling that an individual must receive before filing bankruptcy
Certifying entities to provide the financial education that an individual must receive before discharging debts; and
Conducting enhanced oversight in small business chapter 11 reorganization cases.
In addition to the above summary, there are 25 new changes to the Personal Bankruptcy Law.
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Guaranteed Bad Credit Financing. Receive A Loan Or Credit Card Even With Bankruptcy!
Click Here!
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The objective of a bankruptcy court is to give an honest debtor a "fresh start" by relieving them of the majority of their debt, and to effectively repay creditors an amount that the debtor has available for payment.
New Federal Bankruptcy Law
The new bankruptcy law will affect all people filing for bankruptcy. In addition to increased fees, the new federal bankruptcy law requires that individuals who file for bankruptcy must first go through credit counseling. It is felt that credit counseling will protect individuals from filing for bankruptcy unnecessarily.
Congress established the United States Trustees to further supervise and administrate bankruptcy proceedings.
United States Trustee Program
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, which opens a new era in the history of bankruptcy law and practice, was passed by Congress and signed into law by President Bush on April 20, 2005.
The United States Trustee Program is the component of the Department of Justice that protects the integrity of the nation's bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws.
The Act gives the U.S. Trustee Program new responsibilities in a number of areas, including:
Implementing the new “means test” to determine whether a debtor is eligible for chapter 7 (liquidation) or must file under chapter 13 (wage-earner repayment plan).
Supervising random audits and targeted audits to determine whether a chapter 7 debtor's bankruptcy documents are accurate;
Certifying entities to provide the credit counseling that an individual must receive before filing bankruptcy
Certifying entities to provide the financial education that an individual must receive before discharging debts; and
Conducting enhanced oversight in small business chapter 11 reorganization cases.
In addition to the above summary, there are 25 new changes to the Personal Bankruptcy Law.
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Guaranteed Bad Credit Financing. Receive A Loan Or Credit Card Even With Bankruptcy!
Click Here!
Living On A Dime - Financial Independence Through Better Life Choices. Publisher Of E-books About Paying Off Debt, Saving Money, Frugal Cooking And Homemaking. Click Here!
Eliminate Debt Fast Without Bankruptcy Or Debt Consolidation. Click Here To Learn The Amazing Secrets Of How I Got Rid Of $63,000 Of Debt In Only 4 Months Without Filing Bankruptcy Or Using Any Type Of Debt Consolidation Service! Click Here!
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Filing for Bankruptcy
When you file for bankruptcy, you are legally declaring that you are unable to pay your debts. Filing for bankruptcy will severely affect your credit rating and stay on your personal credit report for up to 10 years.
Notice of Alternatives
An individual who wishes to file a bankruptcy case would receive a written notice of alternatives containing:
a brief description of chapters 7, 11, 12, and 13 and the general purpose, benefits , and costs of proceeding under each chapter;
a brief description of services that may be available from a credit counseling service;
warnings about penalties for concealment of assets and false oaths or statements; and
notice of the possibility of an audit. Unless the court ordered otherwise, an individual debtor (or debtor's attorney or bankruptcy petition preparer) would have to file a certificate with the court to show that the debtor received and read the notice of alternatives. If the debtor failed to file a certificate within 45 days after filing the bankruptcy petition, the case would be dismissed automatically on the 46th day.
Credit Counseling Requirement for Bankruptcy
“Credit is like a looking-glass, which when sullied by a breath, may be wiped clear again; but if once cracked can never be repaired.” --- Sir Walter Scott
Individuals who wish to file a bankruptcy petition are now required to undergo credit counseling through an approved credit counseling service within 90 days before filing the bankruptcy petition.
The credit counseling requirement would be fully waived only if the United States Trustee determined that the approved credit counseling services for a district were not reasonably able to provide adequate services for the additional individuals who would otherwise seek such services. United States Trustees would annually review any such determination.
Find an approved Credit Counseling Service in your area.
Bankruptcy Post Petition
Under certain circumstances, a debtor would be permitted to file the bankruptcy petition first and then undergo credit counseling within 30 days post-petition. In either case, a debtor would have to file with the bankruptcy court a certificate of compliance from the credit counseling service and a copy of the debt repayment plan, if any, developed through that service.
Automatic dismissal would not occur if a debtor failed to file a certificate from a credit counseling service pre- or post-petition. Instead, the United States Trustee or a party in interest could move to dismiss the case based on the debtor's ineligibility.
Bankruptcy Alternative Budget Analysis
The credit counseling provision would require debtors to participate in an individual or group briefing that outlines opportunities for available credit counseling and helps them perform an initial "budget analysis."
Although the term "budget analysis" is not defined in the law, it appears to contemplate an analysis of the debtor's income and expenses, including all secured and unsecured debts and considering the debtor's available disposable income, to determine whether the debtor can pay creditors through a debt repayment plan without imposing undue hardship on the debtor or the debtor's dependents.
Approved Bankruptcy Alternatives
The United States Trustees would have responsibility for approving credit counseling services. Approved services would be included on a list provided to debtors and maintained by the bankruptcy clerk for each judicial district.
Only the listed agencies would be authorized to provide the certificates of compliance that debtors must file with the bankruptcy court. The credit counseling provisions would take effect 180 days after the date of enactment of the Act.
Find a Bankruptcy Lawyer in your area.
Bankruptcy and Reaffirmation Agreement
Should there be a certain debt that you wish to repay rather than be included in your bankruptcy filing, you could apply to the court for a special payment plan to retire that debt.
In some cases a person's vehicle may be deemed as a necessity. When the car loan is reaffirmed, you keep the car as long as you make the payments under the new terms.
Read about the Bankruptcy Abuse Prevention, Consumer Protection Act of 2005 and the New Bankruptcy Law.
How did your Congressperson vote on the Bankruptcy Abuse Prevention, Consumer Protection Act...
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Everything You Know Is Wrong! About Being Debt Free That Is!! And It Will Keep You In Debt The Rest Of Your Life! Click Here!
Credit Repair Secrets Revealed! Credit Repair Is A Hot Topic Click Here!
Guaranteed Bad Credit Financing. Receive A Loan Or Credit Card Even With Bankruptcy!
Click Here!
Living On A Dime - Financial Independence Through Better Life Choices. Publisher Of E-books About Paying Off Debt, Saving Money, Frugal Cooking And Homemaking. Click Here!
Eliminate Debt Fast Without Bankruptcy Or Debt Consolidation. Click Here To Learn The Amazing Secrets Of How I Got Rid Of $63,000 Of Debt In Only 4 Months Without Filing Bankruptcy Or Using Any Type Of Debt Consolidation Service! Click Here!
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Notice of Alternatives
An individual who wishes to file a bankruptcy case would receive a written notice of alternatives containing:
a brief description of chapters 7, 11, 12, and 13 and the general purpose, benefits , and costs of proceeding under each chapter;
a brief description of services that may be available from a credit counseling service;
warnings about penalties for concealment of assets and false oaths or statements; and
notice of the possibility of an audit. Unless the court ordered otherwise, an individual debtor (or debtor's attorney or bankruptcy petition preparer) would have to file a certificate with the court to show that the debtor received and read the notice of alternatives. If the debtor failed to file a certificate within 45 days after filing the bankruptcy petition, the case would be dismissed automatically on the 46th day.
Credit Counseling Requirement for Bankruptcy
“Credit is like a looking-glass, which when sullied by a breath, may be wiped clear again; but if once cracked can never be repaired.” --- Sir Walter Scott
Individuals who wish to file a bankruptcy petition are now required to undergo credit counseling through an approved credit counseling service within 90 days before filing the bankruptcy petition.
The credit counseling requirement would be fully waived only if the United States Trustee determined that the approved credit counseling services for a district were not reasonably able to provide adequate services for the additional individuals who would otherwise seek such services. United States Trustees would annually review any such determination.
Find an approved Credit Counseling Service in your area.
Bankruptcy Post Petition
Under certain circumstances, a debtor would be permitted to file the bankruptcy petition first and then undergo credit counseling within 30 days post-petition. In either case, a debtor would have to file with the bankruptcy court a certificate of compliance from the credit counseling service and a copy of the debt repayment plan, if any, developed through that service.
Automatic dismissal would not occur if a debtor failed to file a certificate from a credit counseling service pre- or post-petition. Instead, the United States Trustee or a party in interest could move to dismiss the case based on the debtor's ineligibility.
Bankruptcy Alternative Budget Analysis
The credit counseling provision would require debtors to participate in an individual or group briefing that outlines opportunities for available credit counseling and helps them perform an initial "budget analysis."
Although the term "budget analysis" is not defined in the law, it appears to contemplate an analysis of the debtor's income and expenses, including all secured and unsecured debts and considering the debtor's available disposable income, to determine whether the debtor can pay creditors through a debt repayment plan without imposing undue hardship on the debtor or the debtor's dependents.
Approved Bankruptcy Alternatives
The United States Trustees would have responsibility for approving credit counseling services. Approved services would be included on a list provided to debtors and maintained by the bankruptcy clerk for each judicial district.
Only the listed agencies would be authorized to provide the certificates of compliance that debtors must file with the bankruptcy court. The credit counseling provisions would take effect 180 days after the date of enactment of the Act.
Find a Bankruptcy Lawyer in your area.
Bankruptcy and Reaffirmation Agreement
Should there be a certain debt that you wish to repay rather than be included in your bankruptcy filing, you could apply to the court for a special payment plan to retire that debt.
In some cases a person's vehicle may be deemed as a necessity. When the car loan is reaffirmed, you keep the car as long as you make the payments under the new terms.
Read about the Bankruptcy Abuse Prevention, Consumer Protection Act of 2005 and the New Bankruptcy Law.
How did your Congressperson vote on the Bankruptcy Abuse Prevention, Consumer Protection Act...
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Everything You Know Is Wrong! About Being Debt Free That Is!! And It Will Keep You In Debt The Rest Of Your Life! Click Here!
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Guaranteed Bad Credit Financing. Receive A Loan Or Credit Card Even With Bankruptcy!
Click Here!
Living On A Dime - Financial Independence Through Better Life Choices. Publisher Of E-books About Paying Off Debt, Saving Money, Frugal Cooking And Homemaking. Click Here!
Eliminate Debt Fast Without Bankruptcy Or Debt Consolidation. Click Here To Learn The Amazing Secrets Of How I Got Rid Of $63,000 Of Debt In Only 4 Months Without Filing Bankruptcy Or Using Any Type Of Debt Consolidation Service! Click Here!
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Consumer Debt In The USA
Consumer Debt Statistics
Some consumer debt statistics published on the Internet are misleading. A popular misconception is that on average, Americans have almost 3 credit cards, 4 retail credit cards, and 2 debit cards. That’s almost 9 cards per cardholder amounting to an average $8,000.00 of credit card debt per household.
Consumer Debt according to the US Federal Reserve
However, the last published statistics by the US Federal Reserve on family finances indicated something much different:
In reality, most Americans owe nothing to credit card companies.
Most households that carry balances owe $2,000 or less.
Only about 1 in 20 American households owes $8,000 or more on credit cards.
23.8% of American households have no credit cards at all -- no bank cards, no retail cards, nothing.
Another 31.2% of the households the Fed surveyed paid off their most recent credit card bills in full.
So together, the households that owed nothing on credit cards equaled 55% of the total.
If you're wondering why you pay such high credit card interest rates, read up on Interest Rates and the Federal Reserve.
Truth about Consumer Debt in America
According to the Federal Reserve, 43% of American families spend more than they earn. Other independent studies maintain that over-spending American families spend $1.22 for every dollar they earn.
Check out the median family income for your state.
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Guaranteed Bad Credit Financing. Receive A Loan Or Credit Card Even With Bankruptcy!
Click Here!
Living On A Dime - Financial Independence Through Better Life Choices. Publisher Of E-books About Paying Off Debt, Saving Money, Frugal Cooking And Homemaking. Click Here!
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Some consumer debt statistics published on the Internet are misleading. A popular misconception is that on average, Americans have almost 3 credit cards, 4 retail credit cards, and 2 debit cards. That’s almost 9 cards per cardholder amounting to an average $8,000.00 of credit card debt per household.
Consumer Debt according to the US Federal Reserve
However, the last published statistics by the US Federal Reserve on family finances indicated something much different:
In reality, most Americans owe nothing to credit card companies.
Most households that carry balances owe $2,000 or less.
Only about 1 in 20 American households owes $8,000 or more on credit cards.
23.8% of American households have no credit cards at all -- no bank cards, no retail cards, nothing.
Another 31.2% of the households the Fed surveyed paid off their most recent credit card bills in full.
So together, the households that owed nothing on credit cards equaled 55% of the total.
If you're wondering why you pay such high credit card interest rates, read up on Interest Rates and the Federal Reserve.
Truth about Consumer Debt in America
According to the Federal Reserve, 43% of American families spend more than they earn. Other independent studies maintain that over-spending American families spend $1.22 for every dollar they earn.
Check out the median family income for your state.
Credit Secrets Bible ! The #1 Credit Course In America Click Here!
Everything You Know Is Wrong! About Being Debt Free That Is!! And It Will Keep You In Debt The Rest Of Your Life! Click Here!
Credit Repair Secrets Revealed! Credit Repair Is A Hot Topic Click Here!
Guaranteed Bad Credit Financing. Receive A Loan Or Credit Card Even With Bankruptcy!
Click Here!
Living On A Dime - Financial Independence Through Better Life Choices. Publisher Of E-books About Paying Off Debt, Saving Money, Frugal Cooking And Homemaking. Click Here!
Eliminate Debt Fast Without Bankruptcy Or Debt Consolidation. Click Here To Learn The Amazing Secrets Of How I Got Rid Of $63,000 Of Debt In Only 4 Months Without Filing Bankruptcy Or Using Any Type Of Debt Consolidation Service! Click Here!
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Debt Help Facts
It takes a great deal of personal courage to face your debt problems head on.
The United States Trustee Program has been advised that clients typically have an 80 percent debt to income ratio when they seek credit counseling from a nonprofit organization.
About one third of all clients opt to develop a debt repayment plan. Out of that one third, approximately 50 percent of the clients who begin debt repayment plans complete their plans, while the remaining 50 percent generally drop out within six months to one year.
By comparison, approximately 35 percent of all chapter 13 debtors complete reorganization plans, with the balance of the cases being dismissed or converted.
Another one third of all clients who seek nonprofit credit counseling are able to work out their finances without a debt repayment plan. About 23 percent of all clients need to take some other type of action, such as seek part-time employment or address substance abuse.
Americans collectively owe nearly 2 Trillion dollars. That's about $18,500.00 per household not including mortgage debt. Credit card debt, which has almost doubled in the last decade, is a major factor in our increasing debt load. Lydia Sermons-Ward, spokeswoman for the National Foundation for Credit Counselors said,
“There is a tendency for consumers to take advantage of credit offers without really thinking through the consequences of overspending.”
The upward surge of credit card debt is challenged only by the rapid increase in mortgage debt. Many lenders are becoming worried that the record low mortgage rates have prompted many homeowners to over-borrow, increasing an already onerous debt load.
Current trends indicate that a significant percentage of homeowners are re-financing to take advantage of lower interest rates, but apparently many more are re-financing to receive cash. The average home owner equity loan is approximately $25,000.00.
One of the results of all this borrowing is the increasing number of homeowners who have three or more mortgages on their property. It is estimated that nearly 2 million American homeowners have mortgages equaling 100% or more of the value of their homes.
Mortgage debt is much larger than the amounts owed to credit card companies. On average, American homeowners owe about $70,000.00, about 20% of American homeowners owe more than $100,000.00 and the numbers are growing each day.
A mortgage is both a debt and an investment in your financial future. It's a debt that you must pay, but it is also an investment through which you add to the equity in your home with each payment. It is paramount to protect this secured investment when considering debt management programs.
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Everything You Know Is Wrong! About Being Debt Free That Is!! And It Will Keep You In Debt The Rest Of Your Life! Click Here!
Credit Repair Secrets Revealed! Credit Repair Is A Hot Topic Click Here!
Guaranteed Bad Credit Financing. Receive A Loan Or Credit Card Even With Bankruptcy!
Click Here!
Living On A Dime - Financial Independence Through Better Life Choices. Publisher Of E-books About Paying Off Debt, Saving Money, Frugal Cooking And Homemaking. Click Here!
Eliminate Debt Fast Without Bankruptcy Or Debt Consolidation. Click Here To Learn The Amazing Secrets Of How I Got Rid Of $63,000 Of Debt In Only 4 Months Without Filing Bankruptcy Or Using Any Type Of Debt Consolidation Service! Click Here!
My Miracle Loans Learn How To Easily Borrow Up To $1 Million Cash In Less Than 7 Days All With No Credit Check, No Collateral, No Proof Of Income, And No Interest Fees! Click Here!
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The United States Trustee Program has been advised that clients typically have an 80 percent debt to income ratio when they seek credit counseling from a nonprofit organization.
About one third of all clients opt to develop a debt repayment plan. Out of that one third, approximately 50 percent of the clients who begin debt repayment plans complete their plans, while the remaining 50 percent generally drop out within six months to one year.
By comparison, approximately 35 percent of all chapter 13 debtors complete reorganization plans, with the balance of the cases being dismissed or converted.
Another one third of all clients who seek nonprofit credit counseling are able to work out their finances without a debt repayment plan. About 23 percent of all clients need to take some other type of action, such as seek part-time employment or address substance abuse.
Americans collectively owe nearly 2 Trillion dollars. That's about $18,500.00 per household not including mortgage debt. Credit card debt, which has almost doubled in the last decade, is a major factor in our increasing debt load. Lydia Sermons-Ward, spokeswoman for the National Foundation for Credit Counselors said,
“There is a tendency for consumers to take advantage of credit offers without really thinking through the consequences of overspending.”
The upward surge of credit card debt is challenged only by the rapid increase in mortgage debt. Many lenders are becoming worried that the record low mortgage rates have prompted many homeowners to over-borrow, increasing an already onerous debt load.
Current trends indicate that a significant percentage of homeowners are re-financing to take advantage of lower interest rates, but apparently many more are re-financing to receive cash. The average home owner equity loan is approximately $25,000.00.
One of the results of all this borrowing is the increasing number of homeowners who have three or more mortgages on their property. It is estimated that nearly 2 million American homeowners have mortgages equaling 100% or more of the value of their homes.
Mortgage debt is much larger than the amounts owed to credit card companies. On average, American homeowners owe about $70,000.00, about 20% of American homeowners owe more than $100,000.00 and the numbers are growing each day.
A mortgage is both a debt and an investment in your financial future. It's a debt that you must pay, but it is also an investment through which you add to the equity in your home with each payment. It is paramount to protect this secured investment when considering debt management programs.
Credit Secrets Bible ! The #1 Credit Course In America Click Here!
Everything You Know Is Wrong! About Being Debt Free That Is!! And It Will Keep You In Debt The Rest Of Your Life! Click Here!
Credit Repair Secrets Revealed! Credit Repair Is A Hot Topic Click Here!
Guaranteed Bad Credit Financing. Receive A Loan Or Credit Card Even With Bankruptcy!
Click Here!
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