Nov 21, 2008

Debt Information

    • Debt Help USA No matter what your financial problems, there are methods, means, and if required, Certified Credit Counselors available to provide you with a fresh, stress-free beginning.
    • Debt Comparison According to the Federal Reserve, 43% of American families spend more than they earn.
    • Debt to Income Ratio Your debt to income ratio is another indicator of your current level of indebtedness and the potential you may have for future debt problems
    • Debt Management Debt management runs the gamut from creating a budget to filing for bankruptcy but in every case you must begin with an honest look at your debt problem.
    • Debt Management Budget A budget will provide you with a cold, hard look at your financial situation and is recognized as the first step in effective debt management.
    • Debt Warning Signs In addition to your debt to income ratio, there are several warning signs that it may be time to seek professional help.
    • Debt Consolidation When you consolidate debt, you usually combine several high-interest debts into one debt management plan payment at lowered interest rates
    • Credit After Debt Consolidation Pay your bills on time. The credit scoring system first considers your payment history
    • Recently, Bank of America purchased credit card firm MBNA and Citibank began gobbling up retail store cards. Only the future will tell how this will affect consumers
    • Consumer Debt Some consumer debt statistics published on the Internet are misleading.
    • Credit Card Debt Almost half of the citizens of the United States of America suffer with credit card debt.
    • The Federal Reserve System If you're wondering why you pay such high credit card interest rages, read up on Interest Rates and the Federal Reserve.
    • Loan Shark or Loan Officer In my humble opinion there is very little difference between the despicable loan shark and my friendly loan officer at the neighborhood bank.
    • Credit Counseling & Banktuptcy Individuals who wish to file a bankruptcy petition are now required to undergo credit counseling.
    • Credit Counseling Services Certified credit counselors assist you in getting your debt under control. They provide you with the information needed to manage your finances into the future, to build wealth, and to create and maintain personal financial independence.
    • Credit Counselor Requirements Last year, the House of Representatives and the Senate each passed a different bankruptcy reform bill containing wide-ranging changes in the bankruptcy laws applicable to individuals.
    • Debt Repayment Plans Nonprofit credit counseling services offer a variety of services that may include counseling, debt repayment plans, and education.
    • How Do Credit Counseling Services Operate? The organizations receive funds from creditors in the form of a negotiated percentage fee based on payments transmitted to the creditors through clients' debt repayment plans.
    • Standards for Approval The United States Trustee Program develops standards for approval of credit counseling services throughout the country.
    • Free Credit Report You are now able to obtain a free annual credit report from each of the nation wide consumer reporting companies.
    • Free Credit Rating Report Everyone has seen it on the Web. Get your “Free Credit Report! Instantly!” And with a click of a mouse you get sucked in and scammed by one of the many credit report “impostors” that have infested cyberspace.
    • Your Access to Free Credit Reports The Federal Trade Commission’s position on your Access to Free Credit Reports
    • Bankruptcy Some can’t get past the stigma, others see bankruptcy as a tool but the majority of people filing for bankruptcy are decent folk like you or me.
    • Bankruptcy Facts In the year 2003, one in every 73 American households filed for bankruptcy.
    • Famous Bankrupts “You're fired!” That’s right the Donald himself fell pray to the bankruptcy courts!
    • Bankruptcy Court The objective of a bankruptcy court is to give an honest debtor a "fresh start" by relieving them of the majority of their debt
    • Bankruptcy Documents These are the documents that you need to start your bankruptcy.
    • Bankruptcy Law The new bankruptcy law will affect all people filing for bankruptcy
    • Credit Counseling Requirement 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.
    • Chapter 7 Bankruptcy The court liquidates all of your assets and dispenses them amongst your creditors in exchange for erasing your debt.
    • Chapter 11 Bankruptcy A Federal Bankruptcy Act where a business debtor can maintain control of its business and operations, under court supervision, as long as current debts remain paid.
    • Chapter 13 Bankruptcy In a Chapter 13 agreement, the court enforces a debt repayment plan that allows you to keep your property.
    • Filing for Bankruptcy: All the rules have changed as of the April 20, 2005
    • Involuntary Bankruptcy There are occasions where your creditors may petition for an involuntary bankruptcy against you.
    • United States Trustee Program The United States Trustee Program is the component of the Department of Justice that protects the integrity of the nation's bankruptcy system.
    • The Federal Reserve System There is much confusion regarding the Federal Reserve System. The Federal Reserve System operates like a private corporation.
    • Fed Boosts Rates Again August 9, 2005: The Federal Reserve raised the target for a key short-term interest rate by a quarter of a percentage point for the 10th consecutive time Tuesday. The move was widely expected on Wall Street, as several recent economic reports have indicated that the economy remains relatively strong.
    • Fed hikes rates, says Katrina impact appears temporary Federal Reserve policymakers lifted their base rate by a quarter-point to 3.75 percent, saying that Hurricane Katrina is likely to have only a temporary impact on the US economy. It was the 11th consecutive rate hike by the central bank's Federal Open Market Committee, which devoted much of its statement to Katrina's impact.
    • Loan Shark or Loan Officer A loan shark is a person (usually mob connected) that loans money at interest rates exceeding the interest rate allowed in a given state. These amoral, unethical gentlemen make their own rules and levy late penalties as they wish without concern for the debtors' health or well-being. These ‘businessmen’ are guilty of the crime of usury; a moral and ethical crime that targets the new middleclass, the working poor.
    • U.S. Interest Rates by State The maximum legal interest rates, by state. Where, exactly, are the headquarters of the major credit-card companies? Hmmmm …

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Feature Article

The New “Means Test” is Just Plain Mean!

by DebtHelp-USA

Ok, so I drew the short straw on this assignment but what can you do? I was asked to sort out the new means test in the new Bankruptcy Abuse Act.

This little gem has been read into law in an effort to provide a 3 pronged formula with which the Bankruptcy Courts can determine if a debtor is abusing the system or not (§ 704(b)(2)), and if actually found in desperate financial straits, under which Bankruptcy Chapter the debtor could find protection.

After Octoberf 17th 2005, if your income is above the state median, you will not be allowed to file Chapter 7, but will be funneled into a Chapter 13 repayment plan. You can find your state median income here

Here’s how it works (Fed’s math, not mine):

  • Take your monthly income, deduct your allowable expenses* and multiply it by 60 = __________. This is the figure you will be judged by.
  • You will be judged as abusing the system if this figure is greater than the following:
    • 25% of your general unsecured claims = ____________ or
    • $6,000.00 or
    • $10,000.00 (the maximum limit provided, at the court's discretion)

*I knew you were going to ask what’s considered allowable expenses. There is a proposal to base allowable expenses on IRS published figures. Here they are:

Do a test. Plug in some realistic figures, do the calculations and see if you come in over the $6,000.00 criteria, over the 25% unsecured limit, or over the $10,000.00 maximum limit. If you did, you are considered to be abusing the system and you can forget about filing for Chapter 7 Bankruptcy.

The means test requires passage of all three of the criteria to avoid presumption of abuse. In other words, one strike and you’re out! This of course eliminates all possibility of the common man from obtaining financial relief under the Bankruptcy Abuse Prevention Act.

In my opinion the new means test is just plain mean! It prevents most of us from utilizing the safety net provided by Chapter 7 of the Bankruptcy Act. The minimum debt requirements (25% of unsecured) eliminate low income individuals, if you have the grand amount of $100.00 per month disposable income you will be prevented from filing under Chapter 7.

The changes to the Bankruptcy Act will affect thousands. If you are teetering on the edge of bankruptcy, you’d better take a long, hard look at it and make a decision well before October 17, 2005.

Procrastinating debtors are rushing to file before the deadline. Bankruptcy filings were up 8% in the first quarter of 2005 and are expected to continue rising as we approach the Oct. 17 deadline.

It is important for you to look before you leap. In some cases filing for bankruptcy will not cure what ails you. Secured loans, (mortgages, car loans, etc?) can’t be erased. Neither can student loans or taxes be forgiven in a bankruptcy. Be very sure that eliminating your unsecured debt will give you enough breathing space to handle your remaining loans. What would be the point of filing for bankruptcy if you were no better off?

In my opinion this draconian measure affects us one and all, from the working poor to the wealthy. If you have the time, check out how your Congressperson voted.

So there you have it ’til next time. Perhaps an article on the temperature of Caribbean beach sand, the pendulum tendency that a hammock displays in warm summer breezes? Well I can still dream can’t I?

Be kind to each other,

DebtHelp-USA

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