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In 2004, 1,562,174 Americans sought protection from creditors through bankruptcy court – a per capita rate over ten times higher than during the worst years of the Great Depression! According to the Consumer Federation of America, in 2003 alone over 9 million consumers made initial calls with a credit counseling agency and in 2004 close to 2 million consumers were actually enrolled in varying types of assistance plans. These numbers clearly indicate that personal debt in the United States is higher than it has ever been and financial stress is very much a reality for millions of Americans, across all segments of society.

But how did this come to be? The economy has been relatively strong for over a decade so it can’t be about slow economic cycles. Why are so many Americans finding it difficult to handle debt loads? Is bankruptcy the inevitable conclusion for many of us? All financial experts are in agreement that in most cases, bankruptcy is not a pre-ordained outcome if help is sought early. However, given the type of consumer driven society we live in today, there is nothing to suggest that the rate of bankruptcies is going to decline.

IT HAS NEVER BEEN EASIER TO GET CREDIT

Personal debt in this country has now surpassed the 1.7 trillion dollar mark and continues to soar. 1995 was the first year American consumers used credit cards more than cash in the economy and there has been no looking back. The financial services sector is an extremely competitive multi-billion dollar industry and financial institutions are falling over each other to try and sign consumers up to their credit services. The average household receives 20 unsolicited credit card invitations each year and many of these offers require no credit check, credit history review or income verification. Today, the average American family carries 12 different credit card accounts and we seem to be using them all!

And if it wasn’t enough that the financial services companies are trying to tempt everyone with credit they might not be able to afford, retailers have also joined this game. Merchant specific credit cards were originally introduced as a way to gain customer loyalty by providing a convenience when shopping at the same store. As major ticket consumer goods have risen in price, retailers have had to come up with innovative ways to keep moving these products. Advertising no down payments, or no payments for a full year has appealed to our collective desire to enjoy today and pay tomorrow. It has allowed retailers to continue moving their products and whether planned or not, has resulted in a new cash cow because most people don’t pay off their cards every month. In fact, 88% of all consumers who buy products under deals where there is a grace period before any payment is due or interest is charged end up converting and keeping the amount on their credit cards. At interest rates of between 20 and 30% for most retail cards, this has become a very profitable activity for the merchants.

This last point bears further analysis. Financial institutions and retailers offering credit terms make an enormous sum of money on interest fees and late payments. Again, consider the average American household. The debt carried on those 12 credit cards equates on average to $8000.00 dollars. According to VISA, 48% of us cover only minimum payments from month to month so assume for this example $200. Provided these cards will not be used again for any additional purchases and using an average annual interest of 18%, it will take 62 months to pay down this debt at a total cost of $12,307.37. That is an additional $4307.37 in interest payments over 5 years or fully 35% of the money paid to clear this debt! No wonder lenders don’t mind minimum monthly payments.

PERSONAL DEBT LEVELS HAVE NEVER BEEN HIGHER

These developments have had a huge impact on consumer buying habits. Since 1990 the average American family’s debt load has increased by a whopping 46% (figure adjusted for inflation). It is no longer necessary to save up before buying something; credit is available for almost anyone and just about everyone is using it. The advent of the internet is also making it much easier to spend money. A click of a button, a credit card number and that new product you happened to find while surfing is delivered to your door a couple of days later. You don’t even have to get dressed to go shopping anymore! It has simply never been so easy to get material products or so challenging to adhere to the kind of fiscal self-discipline that is needed to stay out of debt in today’s society.

According to the American Bankruptcy Institute, personal bankruptcy is most often accompanied by either family breakdown (divorce), unexpected medical bills or sudden job loss. These are circumstances largely out of an individual’s control, but the primary difference in today’s society is that because the debt level being carried by most families is so high, there is no longer any savings for those “rainy days”. A survey conducted by MetLife supports this contention with its findings that fully half of all households in the United States live from paycheck to paycheck. If the average family is financially extended like this, it is no wonder bankruptcy may be the only option when sudden changes like divorce, medical bills or job loss occur.

This is no longer a phenomena of one particular segment of society. No household should feel ashamed or be under the impression that they are alone. But in order to safeguard their financial futures, consumers do need to realize the position they are putting themselves in and what they need to do before it becomes too late for anything except bankruptcy.

If continued spending patterns and money management habits do not appreciably change, the number of personal bankruptcies will continue to skyrocket. And even if this final step may be the only option for some, financial experts do warn that although it will serve to either liquidate (Chapter 7 proceeding) or discharge (Chapter 13 proceeding) debt, the repercussions will last for at least ten years. Any future credit will only be available at the highest interest rates, it may affect approval for insurance policies and even in job selection. Recent amendments to federal bankruptcy legislation have now made it much more difficult to obtain a chapter 7 hearing, so even if bankruptcy is the chosen option, it may still require a repayment plan that does not eliminate a consumer’s debt obligations. Bankruptcy should not be taken lightly.

Given our consumer society, there is no indication that these record debt levels are going to change. It may be harder in future to declare bankruptcy, but that won’t solve the problem. Perhaps what is needed is a tightening up of the credit approval processes so consumers don’t have such easy access to levels they cannot possible sustain given income levels. But as long as lenders continue to earn such high revenues through interest, late payment fees etc. it is unlikely we’ll see change here.

Kavar Peter is a successful freelance writer with a focus in several industries, including credit issues, credit counseling and debt consolidation tips and information.

Practically every person or small company faces fiscal misfortune throughout their economic life. Because of this, bad debt will likely creep up. An individual sometimes can confront these drawbacks due to job loss, divorce, unexpected passing in the family or just plain bad personal financial supervision. Companies generally come across disaster inside the first couple years of business. At fault for a company shutting down can range from increased competition, mistakes, loss of important accounts to name a couple. No matter the origin, bad debt may lead to bankruptcy. In spite of this, there are bankruptcy alternatives that may mitigate damage to your individual credit report and your business credit standing.

Insolvency is described as a lack of ability of a company or a person to fulfill money owed to creditors. If a company files, the debt holder (yourself or the establishment) is bound to release all exemption free real property and assets for elimination. While private items are retained, you likewise promise a particular part of your realized revenue to the creditors based upon a structured repayment program. Your credit bureau grading will go zero for a long time, which entails that you won’t be capable of receiving funding for whatever private or business organization for a extended period of time.

Problems such as unpaid debt can cause trouble. Bankruptcy proceedings are exceedingly abrasive and can contribute to unpleasant ideas and actions. Looking for beneficial directions out of a hard place before you get to insolvency court is better. Debt resolution could be that option for you.

perhaps you are inquiring why a financial institute will wish to work with yourself to resolve the debt remember that settlement is an alternative for them as well. In certain insolvancy judicial decisions a lending institution carrying unsecured debt might possibly obtain nothing at all. Nevertheless, when their client makes out a negotiation the lending institution can recover at least percentage, if not every bit, of the debt they hold. Consider also that when totaling up the interest that has been sent in before along with the late fees and over-limit fees they may have possibly charged, the financial institute might be money ahead even prior to the liquidation program.

Debt settlement is a manageable alternative for those seeking help with debt problems. When just a single, solitary installment is missing, almost all credit lines obtain an exceedingly significant interest charge that then weighs on the existing balance. This interest rate hike will make it increasingly problematic to pay back the charge card in the coming weeks which may most likely send your debt spinning out of control. Debt settlement will let you to pay off your debt with simply a part of what is owed without destroying your FICO score for 10 years.

Not only will they work with you to ensure that you are getting the best deals on the interest rates, they will also counsel you on the methods to avoid such debt structure again and teach you how to rebuild credit. They have the inside information that is necessary to make all of that happen. They can and will negotiate good debt settlement arrangements with your creditors. Creditors are more likely to accept these arrangements from a professional consumer credit counseling service rather than from Joe Average, as its less of a risk to them as they know these agencies can live up to their promises. Consumer Credit Counseling services also motivate you to make sure you see it out to the end. Counseling companies are legitimate companies that strive to get you out of debt, but some may not be. So how can one benefit from Consumer Credit Counseling and still remain safe? First of all you may need to take a retrospective look at your life and decide if you are really willing to change your spending habits no matter what the cost. This is the hardest part, changing oneself. The consumer credit counciling agency should be able to assist you with ways to change your lifestyle and avoid making these mistakes again. This part takes real commitment and a driven purpose. Credit counseling services typically take longer to complete than debt reduction services. The average length of time to liquidate debt through a credit counseling service is 5 years whereas in debt reduction programs can be completed in less than a year. If you are behind in your debts and were to call your creditors now, explain your situation to them, and ask for a reduction in the balance vs. bankruptcy – most will accept immediately. So why should you pay an exorbitant fee just to get someone to make a phone call for you? Proper negotiation requires knowledge of the law, what your rights are, forms and some instruction. It would be even better if these companies offered some assistance in the form of advice.

One of the most popular questions we get from clients is “do I qualify to file a ch 7 bankruptcy?” While the bankruptcy laws are thought to be accessible to everyone, they can be confounding, and the recent bankruptcy laws have changed how courts determine if someone is entitled to file for ch 7 and ch 13 bankruptcy. Let’s look at who can file a chapter 7 bankruptcy?

Individual – You must be an individual to file ch 7. You can be married or single. You do not have to file with your spouse if you are married. If you are married and filing alone you will have to include your spouse’s income to be considered for your eligibility to file.

Income – The chapter 7 means test will check if you have available income accessible to pay some or all of your debts. You are eligible for a chapter 7 if your income is lower than the state median for a family of your size.

You can still qualify for chapter 7 if your income is higher than the median in your state by showing your living expenses. Your living expenses will then be compared to standard allowances the IRS has ordered for housing, groceries and other normal expenses. If you have other expenses that are needed to live such as special medical needs, these can also be included to lower your disposable income.

If you are left with over $10,000 in disposable income you cannot file a chapter 7 bankruptcy, but if it’s less than $6000 you qualify. If it’s between $6000-10,000 and you can pay at least 25% of your unsecured debt then you do not qualify for ch 7, if you cannot pay at least 25% then you can file chapter 7 bankruptcy. As you can see, the means test is confusing if you have disposable income because your income is higher than the median, so you should discuss your eligibility with a bankruptcy attorney.

Guest Article Provided By: BankruptcyFormProcessing.com where you can find chapter 7 bankruptcy information, and DoItYourselfBankruptcyForms.com where you can find free bankruptcy forms online.

Why has ‘debt consolidation’ become such a common phrase nowadays? Unfortunately, the answer’s straightforward – it’s because debt has become a way of life for so many. It’s a sorry reality for even the youngest adults in our society, as illustrated in a recent publication from Rainer, the national charity for under-supported young people.

Published in May 2008, the report looks at credit, debt and other financial issues confronting today’s youngsters. It ‘picks apart some of these challenges and, drawing on the direct experience of the young people facing them, sets out the action required to overcome them’.

‘Unavoidable route into debt’
Joyce Moseley, Rainer’s Chief Executive, talks of the ‘often unavoidable route into debt’. On Rainer’s behalf, research and consulting organisation YouGov found that 90% of the young people questioned were in debt by the age of 21. One in five 18-24 year-olds had already found themselves more than £10,000 in debt.

As they start their adult lives, most young people find themselves with very little disposable income anyway, so once debt repayments start taking a ’slice’, it’s all too easy for their finances to deteriorate rapidly. This goes a long way towards explaining the popularity of debt consolidation loans among young people…

Consolidation – a route out of debt
For many young borrowers, the most important benefit of debt consolidation is simply a reduction of monthly outgoings. Replacing multiple debts with a single consolidation loan gives them a chance to arrange affordable repayment terms. This can mean the debt will take longer to pay off – and possibly cost more in the long run – but cost less each month.

At the same time, a consolidation loan may well come with a lower interest rate than the debts they’re paying off, especially if they’re high-interest debts from (for example) credit cards, store cards and overdrafts.

Consolidating debt also makes it simpler to manage. Remembering one payment per month is much easier than remembering five. Lenders often issue penalty charges for late / missed payments, so a consolidation loan can actually help people keep their debts from growing.

Consolidation – do it the right way
However, there are risks involved with debt consolidation. When someone pays off their debts (overdraft, credit / store cards, etc.), they have to be careful they don’t let these debts start growing again. In fact, it’s often a good idea to cancel cards and overdraft facilities, since it’s all too easy to borrow a bit here and a bit there until they’re in a worse situation than they were before they consolidated their debts – they’ll have to make payments to the consolidation loan every month as well as to the new debts they’ve run up!

Examine to see if the moneylender who is tending to give you a credit loan is honest. At this present you can check over interest rates quickly on the internet and see to it if there are other sneaky conditions you should be aware of.

The Dutch translation says: Woon je in Dirksland of Raalte en heeft u BKR verleden. Lenen met en BKR codering is nog nooit zo gemakkelijk geweest. Haal snel een andere auto met gsm mini kredieten bkr, 275837 euro is gewoon mogelijk om te lenen. Van Gennep tot Wageningen, geld lenen met BKR is hier geen enkel probleem.

A bank in Attleboro Massachusetts or so may have a total completely different actual interest rate for a 22500 dollar bank loan then a merchant bank in Danville California Davenport Iowa and that makes a huge clear gap in your monthly costs. Be lustrous today to check out if you have a super bargain or if you don’t with the merchant bank that offers you a money loan. It doesn’t matter if you live in Gatlinburg Tennessee or in Fullerton California a upright online examination will relieve you often a lot of disorder. This is why now you need to check and run into if you can have a bank loan at a fine percent rate of interest. 12.9 percent loan rate may look so comely but will it stay the same after you’re going to pay back your money loan. A lot of the banks wil show you a interest rate that looks estimable but doesn’t feel well or so after some time.

Gregory Pennington comment on latest insolvency statistics

Commenting on the recent release of the UK Insolvency Services 3^rd quarter statistics, Gregory Pennington, the debt help & advice specialist said:

“The news is further confirmation of the financial difficulties many British citizens currently face due to rising costs of living,”

“Since the effects of an economic downturn tend to filter through gradually, it’s very possible that we will see increasing numbers of people falling into debt over the next few months.

They also issued advice to consumers to ensure they seek debt help and advice early, rather than letting it get out of control.

“For that reason, we urge all consumers to take care of their finances, and anyone who finds themselves struggling with debt should seek expert debt advice as soon as possible.”

The statistics showed that three hundred people are declared insolvent everyday, a total of just over 27,000 in the period between July & September 2008 (a rise of 8.8% on the previous quarter).

Bankruptcies & IVAs (individual voluntary arrangements) also increased at 12.1% & 3.3% respectively.

Gregory Pennington specialise in debt help & debt advice for UK consumers. The firm advises on the best course of action for a client’s specific financial circumstances.

http://www.gregorypennington.com
http://www.insolvency.gov.uk/

Start with credibility. It’s not easy to know if the prices quoted by lenders are reliable. Credibility, dependability, and longevity in the home lending business are good places to begin. Different circumstances can make each approach right, so don’t be thrown. Different lenders charge different fees. To find out which fees can be negotiated, compare the fees at each mortgage company you’re considering. Although most mortgage experts say that rates 9 percent are pretty much the same wherever you go, give or take this tiny 11 percentage. Arranging a mortgage is seen as the standard method by which individuals and businesses can purchase residential and commercial real estate without the need to pay the full value immediately.

Translated in Ducth is says: Woon je in Moordrecht of Utrecht en heb je BKR notering’ Lenen met zonder BKR registratie is nog nooit zo eenvoudig geweest. Verwen jezelf met een andere caravan met geldleningen met negatieve bkr notering, 159780 euro is altijd mogelijk om te lenen. Van Midden-Drenthe tot Franekeradeel, financieren met zonder BKR registratie is hier geen enkel probleem.

So how do you find a lender or broker you can trust’ It is a transfer of an interest in land, from the owner to the mortgage lender, on the condition that this interest will be returned to the owner of the real estate when the terms of the mortgage have been satisfied or performed.

See which lenders are charging fees 5 percent and for how much. Many of these fees are fixed but some can be negotiated.

While a mortgage in itself is not a debt, it is evidence of a debt of 9 percent. Some will quote you precise, competitive rates 8 percent. Both banks and brokers have their strengths and weaknesses. Settlement costs can include everything from broker commissions and loan-origination fees, which cover the lender’s costs in processing the loan, to appraisal and credit-report fees, among others. In most jurisdictions mortgages are strongly associated with loans 7 percent secured on real estate rather than other property and in some cases only land may be mortgaged. Brokers work with many mortgage bankers and, as a result, can sometimes find slightly more competitive rates 11 percent perhaps lower but dealing directly with a mortgage banker can move a loan along more quickly. Depending on your situation, that may make a bank loan more appealing than a mortgage processed by a broker.

In other words, the mortgage is a security for the loan that the lender makes to the borrower. But others will claim low rates to bring in customers or tell you that the rates 5 percent offered by competitors will change.

See mortgage loan for residential mortgage lending, and commercial mortgage for lending against commercial property. And of course, each loan and each borrower are different. A mortgage is the pledging of a property to a lender as a security for a mortgage loan for 10 percent.