Bankruptcy credit Counseling Certificate Colorado

Bankruptcy Pros And Cons Explained

If you are thinking about file for bankruptcy due to a financial hardship, think again? You’re not alone; many thousands of Americans are experiencing financial pain in this economy. If you do declare bankruptcy you shoujld know it will really effect your credit score for a long time?

This is the hard choice many Americans have to face, unable to pay their debts due to either overspending or the housing market crash. What’s a person to do when they can’t seem to get ahead of their bills, and can’t borrow any more money? job loss is the worst, since in a bad economy it can easily take a year or more to replace a job. It seems as if the only thing to do is to declare bankruptcy and wipe out your debts, then start clean. But things have certainly changed, and there are more hurdles to bankruptcy than before. Weigh your options carefully before filing for bankruptcy. Learn more about Florida bankruptcy laws first.

The new bankruptcy laws put into effect in 2005 make it more difficult to declare bankruptcy, since guidelines are in place to prevent people from taking it lightly. You must meet certain income guidelines for one thing, so if you are making a lot of income then bankruptcy is not an option. If you have lost your job, then certainly it is much easier to qualify. However there are still hurdles to cross.

You must also pass a “means test” to see if you have income left over after paying off your bills at the end of the month. anything over a certain amount and you may not qualify. Again, if you are not making any income due to job loss, you would have not problem with this requirement. There is still a simple matter of taking a required credit counseling class, which must be done through an agency that is accredited by the government. This is a new stipulation added in 2005 to help people understand that it is a serious matter, and perhaps teach them to avoid this step in the future. It is also a way to develop a plan to pay off debts which is offered to the court for approval. Having a debt payment plan is a necessity and the court will go over this plan with you.

If you finally pass all the requirements and file for bankruptcy, what is next? If you have filed for Chapter 7, which is the way to wipe out your current debts including credit cards, personal loans, certain medical bills, and even taxes, then after the bankruptcy is discharged you are ready to start again. This means of course you must learn to be very frugal with your money, as any loans you do get will cost much more for at least the first several years. It is possible to build up your credit rating and FICO score again, with time. However a bankruptcy will stay on your record for 10 years, so do you really want that? Don't file until you get more information about bankruptcy law facts.

The better solution if you can possibly do it is to call all of your credit card companies and finance companies and work out a repayment schedule. Many times they will offer you some sort of a deal to lower your payments temporarily, lower the interest rate in some cases, and work with you to repay the amount. Getting help from a verified credit counseling service will make this much faster since most finance companies will take you more serious if you are working with a counseling service. But you must make payments on time, every time, in order to move forward with such a plan. Discipline is the key to any repayment plan, but it’s the best thing for your financial future so it may be a better solution in the long run.

What are my other options besides bankruptcy? Behind on bills? How to evaluate your options.

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