Those endeavoring to avoid bankruptcy must devote time to researching debt reduction options. The Internet provides a multitude of information on personal financial management. Before purchasing products or services professing to reduce or eliminate debts, one should exercise caution.
Consumers who are contemplating bankruptcy should seek the counsel of reputable professionals. The Bankruptcy Abuse Prevention and Consumer Protection Act enacted new bankruptcy laws that have made filing difficult and perplexing. BAPCPA mandates that individuals and couples who petition the court receive credit counseling from a U.S. Trustee-approved agency.
Sometimes, credit counselors can assist individuals in avoiding bankruptcy. Credit counseling agencies can sometimes negotiate with creditors to reduce outstanding balances, lower interest rates, or eradicate late fees and penalties.
Consider working with one of the authorized U.S. Trustee agencies if you decide to seek credit counseling. If they are unable to avoid bankruptcy, they will have satisfied the BAPCPA credit counseling requirements.
For homeowners who have accumulated home equity, debt consolidation may be a viable option. The property is used as collateral for a second mortgage taken out by homeowners. Using funds from the home equity loan, outstanding debts are settled. The interest rates on home equity loans are significantly lower than those levied by credit card companies and can substantially reduce monthly payments.
Numerous consumers use credit cards to cover the costs of daily living. This can result in thousands of dollars in additional interest fees and debt. When debtors cannot pay their credit card bills in full or only make the minimum monthly payment, they are stealing their own money.
Reviewing where money is being spent can reduce wasteful expenditures and potentially prevent bankruptcy. Carrying a small notebook and recording each expense is a simple method to calculate expenditures. Most people are surprised to discover how much money is spent on items they do not require.
As the cost of living continues to rise, it is essential to be proactive and monitor expenditure patterns. Most utility companies offer budget plans that enable customers to pay the same amount each month as opposed to having bills that fluctuate. Numerous phone service providers offer bundle packages that enable customers to save money by bundling their telephone, internet, and cable services.
Purchase cell phone plans that include free evening and weekend conversations. Eliminate subscriptions to magazines and book clubs. Utilize grocery coupons and thrift or consignment stores for clothing, furniture, and domestic items.
Consult three or four bankruptcy attorneys if indebtedness has reached a point where filing for bankruptcy is the only option. The majority of law firms offer free consultations to discuss available options.
There are two categories of personal bankruptcy: Chapter 7 and Chapter 13. When feasible, BAPCPA requires debtors to repay a portion of their debts. Prior to the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), many consumers filed Chapter 7 to have all of their debts discharged. Today, the majority of consumers are required to file Chapter 13 bankruptcy and establish a court-approved repayment plan.""
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