Bankruptcy Act of 2005

Filing for Bankruptcy and How to Avoid Filing Bankruptcy using Debt Relief Services.

Before the Bankruptcy act of 2005 went into effect on October 17, 2005 thousands of consumers and businesses rushed to file chapter 7, Chapter 11, or Chapter 13. However the real impact to most consumers took place on January 1, 2006 when a condition of the bankruptcy act potentially doubled every credit card holder's monthly minimum payment. In the past creditors charged about 1% of your debt as the monthly minimum payment, this potentially resulted in the consumer paying only interest on the debt; never paying down any of the principal! This means you would be in debt continuously. Now as of 1/1/2006 credit card companies are required to charge 2% of your debt as the monthly minimum payment, which means many have found that their monthly bill has nearly doubled. For some the payment may not double exactly, some creditors already charged more than the 1%; to our knowledge the highest minimum was about 1.3%.

This increase in credit card payments combined with an increase in Mortgage interest rates on Adjustable rate mortgages (ARMs) has put millions of Americans at risk of having to file for bankruptcy. This website was created because we know how damaging debt and bankruptcy can be and want to direct consumers in this situation to resources that can help them solve their debt problem WITHOUT filing for bankruptcy.

 

   

What can you do about your debts?
Many consumers think that bankruptcy is their only option when facing a tough debt problem. Certainly, bankruptcy is one remedy, but it should only be used as a last resort when a consumer truly has no current income or expected future income and high debts. If this is your case contact a LOCAL bankruptcy attorney for a free consultation. If you would like to explore your alternatives to bankruptcy; here are your other legal options;

Credit counseling services

Best For:
Simple credit card debts under 15,000 and other miscellaneous bills such as car payments, loans and store cards.

Debt Negotiation/Debt Settlement

Who it is for:
Consumers with Credit card debts over 10,000 and or other UNSECURED debts such as medical bills, store card debt, gas cards, cell phone bills where the combined total is over $10,000. The consumer must be late on their bills, have a financial hardship such as the loss of income due to unemployment, a medical issue even divorce and are facing a potential bankruptcy.

Who it is not for:
If you can pay your bills on time, then debt negotiation is not for you. If you are dealing with secured debts such as home loans, car loans, student loans then debt negotiation is not for you. Also; debt negotiation can't provide relief for payday or cash advance services.

If you have high unsecured debts, are late on your bills and think you are headed for bankruptcy then a debt negotiation service could help you reduce these debts up to 60% or more, without a loan or a bankruptcy. Contact a debt negotiation company for a free consultation here.

Consolidation loans

Any and all debts. In short you are exchanging unsecured debt for secured debt. The difference in the interest rate on your consolidation loan compared to your current debts should be saving you money. Please also calculate the cost of the loan and the risk you are taking on by using your home as collateral for the loan.

Bankruptcy:

If you have a large debt load and no current income and no expected future income that can cover your current monthly debt burden then you should contact a bankruptcy attorney for advice. A bankruptcy attorney will help access your situation and determine which chapter of bankruptcy is best for you and which you may qualify for.

Debt Relief Resources:

Match My Budget at MatchMyBudget.com
Need to find a service to help with your debts? Match My Budget allows you to submit your request for help in one place and have up to 3 approved companies compete to eliminate your debts. This is a free and no obligation service!

The Debt Diet at TheDebtDiet.com
Official Debt Diet Home page can teach consumers how to efficiently get out of credit card debt on their own; even with very little income to work with. The strategy is simple, sound and proven. Learn how it works at TheDebtDiet.com

Foreclosure Prevention Services ihomesaver.com
If your home is in danger of being foreclosed on iHomesaver can help you. Get in touch with a home foreclosure prevention expert who can help you save your home. Free consultations to help you understand your options! iHomesavers foreclosure prevention services