Avoid bankruptcy & learn how to manage your finances!
Not only will our debt consolidation program get you out of debt without having to file for bankruptcy, our program will also teach you the skills and information necessary to manage your own finances and how to handle your spending responsibly, preventing incidences of future debt from occurring. 

Click here for a FREE debt consolidation quote.

What types of debt can be considered for debt consolidation?

• credit cards

• bank lines of credit

• medical bills

• past-due utility bills

• IRS taxes

• department store credit cards

• collection agency debts

• personal loans

• repossessions

• some student loans

* Mortgages and automobile loans are generally NOT included in our debt consolidation plan.

What are the benefits of debt consolidation?
Creditors recognize that people who enter a debt consolidation program are trying to repay their obligations in good faith. 

Creditors are more willing to extend favorable terms to such clients in hope that they (the creditors) will avoid the considerable cost of turning the account over to a collection firm or avoid an extended drawn out process if the account holder goes through the expense of declaring bankruptcy.

Not only does our debt consolidation program help you avoid bankruptcy, it will help you get out of debt the fastest way possible, often helping you save thousands of dollars at the same time! With our debt consolidation plan, the average consumer is able to get out of debt 1-3 years on average. Normally, this same debt can take 10-15 years and thousands of dollars more to repay!

Our debt consolidation program will also teach you the skills and information necessary to manage your own finances and how to handle your spending responsibly, preventing incidences of future debt from occurring.

Click here for a FREE debt consolidation quote.

Setting up debt consolidation plans can be very useful and financially wiser than applying for a debt consolidation loan! 

Why?

The disadvantages of debt consolidation loan is that one transforms unsecured debt which is not backed by any collateral, into secured debt, which is. The family home is often used as collateral for a debt consolidation loan. If you are unable to meet the conditions of your debt consolidation loan agreement, you put your home at risk. If you fall behind on monthly payments, your home can be taken from you by the lender! 

The interest rates associated with debt consolidation loans are also VERY high. They range between 20-25% and yield no advantage in reducing monthly payments or total interest. Debt consolidation loans, including the interest, can take between 10 and 15 years to pay-off!

Click the link to learn more about debt consolidation loans.

Click here for a FREE debt consolidation quote.

What are the disadvantages of a debt consolidation program?
1. If you decide to use a debt consolidation program, delinquent payments and/or failure to make the minimum will automatically show show up on your credit report. 

2. If you feel that filing for bankruptcy would be a better alternative than debt consolidation, you will have to use the services other than that of our debt consolidation program. Our counselors tend to favor toward helping you to pay off your debt rather than advising you to file for bankruptcy. 

Click the link to learn more about filing for bankruptcy.

Will debt consolidation show up on my credit report?
When you work with a financial company to achieve credit repair or debt consolidation it is almost GUARANTEED to show up on your credit report. 

Shows as a Negative Situation:
This not a terrible thing. Think about it, would you rather your credit report say you paid your bills off through debt consolidation, or show further delinquency with no effort made to settle your debt? Although it is difficult to determine how future creditors are going to interpret your information, it shows that you are trying to amend your financial troubles. Your credit report will probably confirm that you've been hauling overdue balances, made late payments in the past 7 years, or even missed payments. This is bad, but not terrible.

Shows as a Positive Situation:
Depending on your past credit history, having debt consolidation show up on your credit report can actually be a positive incident. If you make your payments in full and on time to your collection firm, after you have made several payments your account will be shown as current! This process done by creditors is called "re-aging" your account. Basically, when you pay off debt, you revitalize your credit report. Showing that you are working through a credit counseling service may show future creditors that you needed help, but wanted to pay off your debts in full.

Click here for a FREE debt consolidation quote.

Two very important things consumers should know:
1. As mentioned earlier, once an individual makes three timely and consistent payments, creditors will re-age the delinquent account to current status, which helps individuals repair their credit rating.
2. Every consumer has the right to add a 15-line statement to his or her credit report explaining the circumstances for needing a debt management program.

What can I do to help myself?
1. Discipline -Try to regulate yourself to set aside a certain amount each month. If you have difficulty doing this on your own, many employers offer some sort of savings or retirement plan that allows for automatic deductions from your check. That way it's already set aside before you get paid. 

2. Credit Cards - "Buy now, pay later" is a powerful temptation. Remove the temptation by leaving your credit cards at home.

3. ATM Cards - Stay away from charges and tarnishing your budget by getting the money you need when you deposit your check.

4. Impulse Buying - Make a list of things you need when shopping and don't buy anything not on it.

5. Cash and Carry - Carry only a certain amount of cash with you. That way you can't spend more than you have on you at that time.

6. Minimum Monthly Payments - Up to 90%+ of your minimum credit card payment can go to interest alone thus taking years to pay off. Pay as much as you can afford or better yet, try not to use your card at all except in emergencies.

7. Temptation - When ever you feel you just have to have it, take a deep breath, step back and think it over for 24 hours. You may find that you really didn't need it after all.

8. Procrastination - Tomorrow never comes. The best time to start practicing smart money management is now!

Click here for a FREE debt consolidation quote.

What are debt consolidation loans?
Debt consolidation loans consolidate your monthly bills into just one monthly payment, hopefully at a lower average APR than your current bills. Debt consolidation loans transform unsecured debt into secured debt. A lender lends you money against your personal property, usually your home. This type of debt consolidation loan is called a home equity loan. If you are unable to meet the conditions of your debt consolidation loan agreement, you put your home at risk. If you fall behind on monthly payments, your home can be taken from you by the lender!

What types of debt can be considered for debt consolidation loans?

• credit cards

• department store credit cards

• car loans

• boat loans

• student loans

• furniture loans

• small Loans

• personal loans

• judgments or tax liens

• home improvement loans

What are the advantages of debt consolidation loans?
The main advantage of a debt consolidation loan is that it allows you to make payments to a single creditor rather than to many creditors and collection agencies who aggressively compete for your limited dollars, often to the point of debt harassment.

Listed below are some more advantages:

1. Lower payments - because of the lower rates and longer terms available you can drastically lower your monthly payments.
2. Lower interest rates - home loans and home equity loans generally have lower rates. 
3. Tax deductible interest - consult your tax advisor for details.
4. Flexibility with payments - longer terms give you the option of your regular low payment or paying more if you want to pay the loan off sooner.
5. Stops collection calls and aggressive collection tactics.
6. One manageable monthly payment to make instead of several.
7. Deal with judgments or tax issues.

What are the disadvantages of debt consolidation loans?
The disadvantages of debt consolidation loans is that one transforms unsecured debt which is not backed by any collateral, into secured debt, which is.

The interest rates associated with debt consolidation loans are also VERY high. They range between 20-25% and yield no advantage in reducing monthly payments or total interest. Debt consolidation loans, including the interest, can take between 10 and 15 years to pay-off!

Some debt consolidation loans are personal loans at extremely high interest rates. We don't recommend personal loans because you are trying to get out of debt, not deeper into debt. Technically, since you are borrowing more money, you're not really getting out of debt, you just created more debt, but hopefully at a lower APR to pay your bills off faster.

Debt consolidation loans can be financial suicide!
Lets say that by pledging your house as collateral, the banks give you a loan and you pay all of your high interest credit cards and loans. So far so good -- now you only have the loan to pay off. BUT -- your credit cards now have no balance and inevitably, you buy a few things here and there, and before you know it -- your credit cards are back to the limit. Now you have the 'consolidation loan' and the credit cards. Everybody says, "No that won't happen to me" or "I'll never do that" but people do this ever day and end up worse off then when they started.

In a study of the efficacy of debt consolidation loans, the FDIC concluded that "..some consumers will increase credit card and other consumer debt after a debt consolidation package is completed, thereby weakening their ability to repay outstanding debts and increasing the likelihood of bankruptcy."

Rules to follow when you take out a debt consolidation loan:
1. DON'T BORROW MORE MONEY THAN THE EQUITY OF YOUR HOME!

2. NEVER SIGN A CONSOLIDATION LOAN WITHOUT FULL DISCLOSURE IN WRITING OF:

a) The principal amount that you are borrowing.
b) What the interest rate APR will be.
c) How many payments you will pay.
d) Closing costs, if any.

These variables should be clearly spelled out in the contract. IF IT'S NOT ON THE CONTRACT, DON'T SIGN!

3. If you don't know how to check their math and verify the monthly payments, don't sign the loan papers, you have no business taking out a loan. You'll have no recourse later because in court they'll just say "you signed the loan". Verbal statements or claims made by salespeople do not hold up in court. There are many unscrupulous "lenders" out there who prey off people who are naive or have bad credit. They'll offer you the world, lying through their teeth to get you to sign up to their program.

4. You should close out all the accounts you paid off with your debt consolidation loan, so you don't run up the balance again. This way you don't have double the potential for high credit amounts again.

What is bankruptcy?
Bankruptcy is a federal court process designed to help consumers and businesses eliminate their debts or repay them under the protection of the bankruptcy court.

Bankruptcy is when a debtor hands over his assets to the bankruptcy court and is relieved of the impending obligation to repay their unsecured debts. The debtor's remaining property is then administered for the creditors or is distributed among them. A bankruptcy proceeding can either be entered into voluntarily by a debtor or initiated by creditors. After a bankruptcy proceeding is filed, creditors, for the most part, may not seek to collect their debts outside of the proceeding. The debtor is not allowed to transfer property that has been declared part of the estate subject to proceedings.

While many more bankruptcies are declared than need to be, statistics show how many people feel their debt burden is more than they can handle: Personal bankruptcies are at an all time high! In 2000 there were more than 1.5 million declared. That figure is up 63% from just 10 years ago.

Click the link to learn how to file for bankruptcy yourself. You can save hundreds of dollars by doing it manually, as opposed to an attorney.

Before you even consider filing for bankruptcy you should:
1. Talk with your creditors. They may be willing to work out a modified payment plan. 

2. Use our credit counseling service/debt consolidation program. We will work with you and your creditors to develop debt reimbursement plans. Such plans require you to deposit money each month with our counseling service. We will then pay your creditors. Click the link for more info on debt consolidation plans. 

Click the link to receive a FREE debt consolidation quote..

3. Carefully consider a second mortgage or home equity line of credit, otherwise known as debt consolidation loans. While these loans may allow you to consolidate your debt, they also require your home as collateral. Click here to learn more about debt consolidation loans.

** Remember, except in unusual situations (being a tax protester or willfully failing to pay child support) you can't be thrown in jail for not paying your debts. Nor can a creditor take away such essentials as basic clothing, ordinary household furnishings, personal effects, food, Social Security, unemployment or public assistance.

When is filing for bankruptcy the best course of action?
Deciding if bankruptcy is the best means of resolving debt rather than a debt consolidation plan or debt consolidation loan is very difficult to answer because there are so many factors to consider which are often determined by outer conditions. You need to decide if your situation is a temporary or permanent problem. 

An example of a permanent situation: You have become disabled and are no longer able to work, unable to satisfy more than your monthly living costs, let alone debt. Your disability is permanent and unfortunately,  there's no chance of making more money. Bankruptcy may be your only alternative. 

An example of a temporary situation:  If you have fallen behind with creditors but you are still making a reasonable income with the possibility of promotions or raises, bankruptcy may not be the option to take. 

But what if neither one of these situations pertains to you? Here is a comparison to help you choose the best direction of achievement.

What is the impact of filing for bankruptcy? 
Despite the popularity of this procedure, many people do not understand the impact of filing bankruptcy on their financial future. A notation that you filed will be entered on your credit bureau file. This negative mark can remain on your credit bureau file for 10 years. While this bankruptcy notation is on your credit bureau file, you could be prevented from getting credit, a job, insurance, an apartment or opening a checking and/or savings account. It will be extremely difficult to get a mortgage on a new house or finance a car.
Even if you are able to get a car loan, your interest rates can be as high as 25%!

Will filing for bankruptcy stop harassing phone calls from bill collectors?
When you file either kind of bankruptcy, something called an "automatic stay" goes into effect. The automatic stay bans nearly all creditors from taking any act to collect the debts you owe them unless the bankruptcy court lifts the stay and lets the creditor proceed with collections.

What are the different types of bankruptcy I can file for?
The two main types of consumer bankruptcies are Chapter 7 and Chapter 13.

Chapter 7:
Chapter 7 is designed for debtors in financial difficulty who do not have the ability to pay their existing debts. The purpose is to obtain a discharge of your existing debts. Under Chapter 7, a trustee takes possession of all your property. You may claim certain property as exempt under governing law. The trustee then liquidates all of your non-exempt property and uses the proceeds to pay your creditors according to priorities of the Bankruptcy Code. A filing under Chapter 7 is commonly called liquidation. 

Chapter 7 is the most common type of bankruptcy proceeding. As mentioned earlier, a bankruptcy proceeding can either be entered into voluntarily by a debtor or initiated by creditors. Chapter 7 bankruptcy is often looked at as a 10 year mistake. That is because if you file for Chapter 7, a notation to this effect can remain on your credit bureau file for up to 10 years. This can prevent you from getting credit, certain insurance and possibly a better job for the next 10 years. 

Click the link to learn how to file for bankruptcy yourself.

Chapter 13:
Chapter 13 is designed for individuals with regular income who are temporarily unable to pay their debts but would like to pay them in installments over a period of time. You are only eligible for Chapter 13 if your debts do not exceed certain dollar amounts set forth in the Bankruptcy Code.   Under Chapter 13, you must file a plan with the courts to repay your creditors all or part of the money that you owe, using your future earnings. Usually the period allowed by the courts to repay your debts will be not more than five years. Your plan must be approved by the court before it can take effect. 

Under Chapter 13, unlike Chapter 7, you may keep all your property, both exempt and non-exempt, as long as you continue to make payments under the plan. After completion of payments under your plan, your debts are discharged except alimony and support payments and long term secured obligations. If you file for Chapter 13, this notation can remain on your credit bureau file for 7 years.

If you can, choosing Chapter 13 over Chapter 7 bankruptcy can be much wiser. Why?
Although the majority number of people who file for bankruptcy choose Chapter 7, there are several motives why people select Chapter 13:

• If you received a Chapter 7 or Chapter 13 discharge within the previous six years, then you cannot file for Chapter 7 bankruptcy  unless you paid off at least 70% of your unsecured debts in a Chapter 13 bankruptcy. On the other hand, you can file for Chapter 13 bankruptcy at any time.

• You have precious non-exempt property.

• You're behind on your mortgage or car loan. In Chapter 7, you'll have to give up the property or pay for it in full during your bankruptcy case. In Chapter 13, you can repay the debts through your plan, and keep the property by making the payments required under the contract.

• You have debts that cannot be discharged in Chapter 7.

• You have co-debtors on personal (non-business) loans. In Chapter 7, the creditors will go after your co-debtors for payment. In Chapter 13, the creditors may not hunt for payment from your co-debtors for the remainder of your case.

• New creditors might be more inclined to grant you credit after a Chapter 13 than they would after a Chapter 7.

What generally happens in consumer bankruptcy cases?

Chapter 7:
In a Chapter 7 case, you file several forms with the bankruptcy court listing income and expenses, assets, debts and property transactions for the past two years. The cost to file is $200, which may be waived for people who receive public assistance or live below the poverty level. A court-appointed person, the trustee, is assigned to oversee your case. About a month after filing, you must attend a "meeting of creditors" where the trustee reviews your forms and asks any questions. Despite the name, creditors rarely attend. If you have any non-exempt property, you must give it (or its value in cash) to the trustee. The meeting lasts about five minutes. Three to six months later, you receive a notice from the court that "all debts that qualified for discharge were discharged." Then your case is over.

Chapter 13:
Chapter 13 is a little different. You file the same forms plus a proposed repayment plan, in which you describe how you intend to repay your debts over the next three, or in some cases five, years. The cost to file is $185 (it cannot be waived), and a trustee is assigned to oversee the case. Here, too, you attend the meeting of creditors. Often one or two creditors attend this meeting, especially if they don't like something in your plan. After the meeting of the creditors, you attend a hearing before a bankruptcy judge who either confirms or denies your plan. If your plan is confirmed, and you make all the payments called for under your plan, you often receive a discharge of any balance owed at the end of your case.

What debts are non-dischargeable for bankruptcy?
The debts listed below are non-dischargeable in both Chapter 7 and Chapter 13. If you file for Chapter 7, these will stay when your case is over. If you file for Chapter 13, these debts will have to be paid in full during your plan. If they are not, what's left will remain at the end of your case.

• any debts that you did not remember to register in your bankruptcy papers, unless the creditor learns of your bankruptcy case

• child support and alimony

• debts for personal injury or death caused by your intoxicated driving

• student loans, unless it would be an excessive adversity for you to repay

• fines and penalties imposed for violating the law, such as traffic tickets and criminal restitution

• recent income tax debts and all other tax debts

In addition, the following debts may be declared non-dischargeable by a bankruptcy judge in Chapter 7 if the creditor challenges your request to discharge them. These debts may be discharged in Chapter 13. You can include them in your plan, and at the end of your case, the balance is wiped out:

• debts you incurred on the basis of fraud, such as lying on a credit application

• credit purchases of $1,150 or more for luxury goods or services made within 60 days of filing

• loans or cash advances of $1,150 or more taken within 60 days of filing

• debts from voluntary or hateful injury to another person or another person's property

• debts from embezzlement, larceny or breach of trust

• debts you owe under a divorce decree or settlement unless after bankruptcy you would still not be able to afford to pay them or the benefit you'd receive by the discharge outweighs any detriment to your ex-spouse (who would have to pay them if you discharge them in bankruptcy).

Click the link to learn how to file for bankruptcy yourself.

What property might I lose if I file for bankruptcy?
You lose no property in Chapter 13. In Chapter 7, you decide on property you are qualified to keep from either a list of state exemptions or exemptions provided in the federal Bankruptcy Code. Most debtors use the exemptions provided by their state.

What items are exempt from being taken away when I file for bankruptcy?

• your cars, to a specific worth

• jewelry - You may be limited up to $1,000 or so in how much jewelry you can keep.

• personal property - You'll be able to keep most household goods, furniture, furnishings, clothing (other than furs, appliances, books and musical instruments).

• life insurance (cash or loan value, or proceeds), to a specific worth

• pensions - Pensions which qualify under the Employee Retirement Income Security Act (ERISA) are fully protected in bankruptcy. So are many other retirement benefits; often, however, IRAs and Keoghs are not.

• part of the equity in your home - Under the Bankruptcy Code, you can exempt up to $17,425 of equity. Some states have no homestead exemption; others allow debtors to protect all or most of the equity in their home.

• tools of your trade or profession, to a specific worth

• portion of unpaid but earned wages - In most states, you can protect at least 75% of earned but unpaid wages. Each state has different laws pertaining to garnishment of wages. You will have to check with an attorney or the Attorney General Consumer Affairs Office to see what the garnishment laws are in the state where you live.

• public benefits - Welfare, Social Security, and unemployment compensation that have accumulated in your bank account are all exempt.

Will I lose my house?
If you are behind on your mortgage payments, you will almost certainly lose your house if you file a Chapter 7 bankruptcy. Your mortgage lender will ask the bankruptcy court to lift the automatic stay to begin or resume foreclosure proceedings. In a Chapter 13 bankruptcy, you will not lose your house if you immediately resume making the regular payments called for under your agreement and repay your missed mortgage payments through your plan.

If you are current on your mortgage payments, you will not lose your house if you file for Chapter 13 bankruptcy, as long as you continue to make your mortgage payments. In Chapter 7 bankruptcy, whether or not you will lose your house depends on the amount of equity you have in the property and the amount of any homestead exemption (which varies state-to-state) to which you are entitled.

If the total amount of debt against your house is less than the market value, you may lose your house unless a homestead exemption entitles you to all or most of the equity.

If I rent, will I be evicted?
If you are current on your rent payments and file for bankruptcy, it's unlikely your landlord would ever find out. But if you are behind on your rent, there's a good chance that your landlord will begin eviction proceedings to get you out. Your inclination may be to file for bankruptcy just to get the automatic stay in place to stop the eviction. This will work, but not for very long. Expect your landlord to come into court to have the stay lifted, which is likely to be granted.

** One of the biggest worries you may face in considering filing for bankruptcy is the possible loss of your home or apartment. Though there are a few situations where you may lose your home or apartment, keep in mind that bankruptcy is not designed to put you out on the street.

Can I be denied when I file for bankruptcy?
Bankruptcy isn't always a sure thing. With the increase in bankruptcy filings has come an increase in the number of cases being bounced out of court. 

With over a million people filing for bankruptcy during each year, many bankruptcy courts are taking a hard look at who is filing and why. And increasingly, courts are rejecting debtors' claims and throwing them out of court.

In searching out valid bankruptcy claims, many judges look to the totality of the circumstances, focusing on some of the following questions.

• Do you have disposable income each month?

• Is your income steady?

• Are you eligible for a Chapter 13 bankruptcy?

• Could you use non-bankruptcy solutions, such as negotiating directly with creditors, to repay your debts?

• Can you reduce your expenses without depriving yourself of necessities?

• Do other factors make you an appropriate candidate for a Chapter 7 discharge?

In addition, a court will dismiss a bankruptcy claim and possibly jail the person who brought it if he or she defrauds the court. If you lie, hide or cheat, it will probably come back to haunt you more profoundly than your current debt crisis. You must sign bankruptcy papers under penalty of perjury, swearing that everything in them is true. If you deliberately fail to disclose property, omit material information about your financial affairs or use a false Social Security number to hide your identity as a prior filer, and the court discovers your action, your case will be dismissed and you may be prosecuted for fraud. But the law does not punish those who make honest mistakes. If you accidentally leave something off your papers or misstate something on your forms, you can correct your papers or explain the mistake to the trustee. Fraud, which will get you into legal trouble, is very different; basically, it is something that cannot be explained or for which the only explanation is: "The dog ate my homework."

While prosecution for fraud is rare, it's on the rise.

Click Here to learn more about bankruptcy fraud.

Will I be able to apply for a car loan or mortgage before the 10 years is up?
After several years, it will not be as hard to purchase a house or get a car loan. Just be prepared to explain your reasons for filing for bankruptcy. You may have to call several mortgage brokers or car dealerships before you get the loans you need. Oddly, some mortgage lenders recommend bankruptcy to remove high debt loads, enabling potential home buyers to qualify for loans.

If you are going to apply for a cash loan, do not apply for an open credit line, apply for a small installment loan with a bank or credit union. Follow these guidelines when applying for a loan:

• Have a specific purpose in mind for the loan. Be honest. If the purpose is to reestablish credit, say so.

• Try and keep the loan request as minimal as possible.

• Be prepared to use savings or a CD as collateral for the loan.

• Be aware you’ll pay a much higher interest rate. You’re considered a risk.

What about opening a checking account?
Banks are more concerned about bounced checks than bad credit when deciding whether they want you as a customer. You can order a copy of your ChexSystems report to see if there are any reports of account mismanagement that would limit your ability to open a checking account.

More useful links for information related to bankruptcy:
American Bankruptcy Institute (http://www.abiworld.org).

Commercial Law League of America (http://www.clla.org).

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