Tag Archive | "Personal Finance"

Filing for Bankruptcy Protection in Georgia

Filing for Bankruptcy Protection in Georgia

A State-by-State Guide to Filing for Bankruptcy Protection: Georgia

Bankruptcy laws vary from one state to another. Here is a breakdown of Georgia bankruptcy guidelines to help you understand the differences when filing for Chapter 7  Bankruptcy vs. Chapter 13 Bankruptcy.

Georgia Bankruptcy Guidelines

A Georgia bankruptcy lawyer will probably begin your consultation by explaining the difference between Chapter 7 and Chapter 13 bankruptcy. This often includes what is called a “means test.” This involves asking some very personal questions about your assets, debts and your financial goals. The answers you provide to these questions will help you and your bankruptcy lawyer determine if filing Chapter 7 or Chapter 13 bankruptcy is right for you.

Chapter 7 bankruptcy is usually called “liquidation” because the bankruptcy trustees in Chapter 7 bankruptcy cases may opt to sell any non-exempt property the debtor owns. In many Chapter 7 bankruptcy cases, the debtor does not own any non-exempt assets, so no property is sold. Unsecured debts may be completely discharged in Chapter 7, making it an attractive bankruptcy option.

If you are filing Chapter 7 bankruptcy, find out from your Georgia bankruptcy lawyer which and how much of your assets may be exempt from liquidation.

Georgia State Bankruptcy Exemptions

Homestead

* $10,000 for real or personal property, $20,000 if property owner is married.

Wages

* 75 percent of weekly earnings.

Automobiles

* Your interest in up to $3,500 in all motor vehicles.

Personal Property

* $1,500 for any implements, professional books, tools of the trade.
* Up to $300 in value in any one item.
* Up to $5,000 in household furnishings, good, clothes, appliances, books, animals, crops or musical instruments.
* $500 in jewelry.
* Certain retirement and insurance benefits may be fully exempt.

Note: Keep in mind all state bankruptcy laws and exemptions are complex. If you need legal advice or want to fully understand how Georgia laws affect you, please speak with an attorney in Georgia. State bankruptcy laws are subject to change at any time. For the latest information, read the full text of Georgia bankruptcy laws.

Links to Georgia Bankruptcy Lawyers:

moneylawyer.com

thebklawyer.com

Posted in BankruptcyComments (0)

Enrolling in a Debt Management Plan to Help Your Monthly Budget

Enrolling in a Debt Management Plan to Help Your Monthly Budget

Enrolling in a debt management plan
Signing up for a debt management plan may give you more breathing room in your monthly budget, but will it hurt your credit? Not as much as you may think. Using a debt management plan to pay off debt won’t hurt your credit score, but it may make it difficult to qualify for new credit.

Debt management plan: Protecting your credit score
When you enroll in a debt management program, you write a monthly check to a credit-counseling agency and the agency pays your creditors. A debt management plan usually lasts three or four years. A notation stating that you are paying an account through a credit-counseling agency appears on your credit report and remains until the account is paid in full. Paying an account through a credit counseling agency will not hurt your credit score.

Debt management plan: Qualifying for new credit
Participating in a debt management plan could make it difficult for you to qualify for additional credit, and some debt management plans prohibit consumers from applying for new credit anyway.

Some creditors may see that a person is in a debt management plan and decide that they have all the debt they can handle. Other creditors might view participation in a debt management plan as a positive step, a sign that a consumer has taken responsibility for and is serious about paying off debt.

The more a creditor bases a lending decision on a consumer’s credit score, the less a consumer’s participation in a debt-management plan is likely to matter. A typical creditor uses the FICO score. They don’t look at notations on the account. Paying off a big chunk of debt on your own or with the help of a debt management plan will give your credit score a boost.

Debt management plan: Late payments hurt your credit score
What will hurt your credit score? Not debt management plans. Instead, being 30 or 60 days late with any payments can adversely impact your credit rating. Those negative marks hurt your credit score and can mar your credit report for up to seven years.

Debt management plan: Choose wisely
It is very important to choose a debt management plan carefully. If the agency administering the program misses or is late with a payment, it is your credit record that gets impacted. Enrollment and monthly fees for debt management plans vary widely. Some companies may charge several hundred dollars for their services, while others charge monthly fees of $20 or less.

With a debt management plan, a consumer usually gets reduced interest rates, lower monthly payments, no more late fees and fewer calls and letters from creditors. Debt-counseling agencies get their operating money by receiving a percentage of each client’s payments back from creditors.

If you are current on your bills, you may want to try negotiating new payment amounts and lower interest rates with creditors on your own. You never know what kind of deal you may land. And you may be able to make real headway on your debt by simply tightening your belt for a few months and freeing up more cash for debt payments.

Debt management plan: Monitor your debt counselor
If your situation is more serious or you just feel plain overwhelmed, you may want to talk to a debt counselor. If you decide to sign on for a debt management plan, be sure to monitor your credit bills carefully. Is the agency paying your bills on time as promised? You need to be vigilant and look at your statements regularly.

If you discover a problem with bills paid through a debt consolidation company or credit counselor, report the company to a local consumer protection agency or state attorney general‘s office. You can also file a complaint with the Better Business Bureau. For more ideas on how to monitor these companies, see some of the suggestions by the FTC on Debt Management Plans.

Examples of Debt Management Companies

Reblog this post [with Zemanta]

Posted in Debt Consolidation, Debt Management, Your BudgetComments (0)

FICO 101:  How to Improve Your FICO Score (Credit Score)

FICO 101: How to Improve Your FICO Score (Credit Score)

improve-your-fico-scoreAlmost every working American has a FICO score. Anyone with a Social Security number, a job, and any kind of debt is likely to have a record with one or all of the three major credit reporting agencies. This credit report history results in an algorithmic score that rates each individual’s creditworthiness. A higher FICO score means that a person is responsible in acquiring and paying debt, while a low score tells potential creditors that a person is a higher risk.

How is a FICO Score Determined?

Your FICO score is an algorithmic mathematical weighted formula. Your credit history shows how many creditors you have, what your credit limit is for each creditor, how much of your limit you have used, and also whether you pay on time and as agreed or have made late payments in the past.

Serious credit issues, such as repossession, foreclosure, and collections, will also show on your credit report, as well as financial judgments from a court of law. All these critical aspects are scored by their importance to provide a single number of your creditworthiness.

What Affects My FICO Score And How Can I Protect It?

Your FICO score must be treated with care, much like a pet. It needs constant nurturing, maintenance, and sometimes, it must be treated by a professional and bandaged for repair. A credit history can be damaged by anyone who reports your credit activity to the reporting agency without your consent. Subsequently, it is paramount to treat your creditors with respect and pay them as agreed.

Your credit report and FICO score can be damaged by the report of any of the following:

• Late Payments – If you miss a scheduled payment on a credit card, auto, or home mortgage payment, it will show on your report. Late payments are noted as simply late, and in increments of 30, 60, and 90+ late. The more days late your payment is, the lower your credit score. In fact, your credit score can drop almost overnight.

CREDIT TIP: Even if you cannot pay your creditors, you should make arrangements right away when you experience financial difficulty. Try to work with your creditors regarding a payment plan, which may prevent them from reporting a late payment on your credit score.

• Over Limit – Your credit card companies will report your maximum credit limit. If you charge more than that limit, your report will reflect it.

CREDIT TIP: Always stay well below your credit limit. Conventional wisdom says to keep your charged credit at 2/3 or below your limit for each creditor.

• Collection – If you fail to make payments for a period of time on a credit card or other debt, your account will close and be sent to a collection agency. Your credit report will show both the account closure and the new reporting by the collection agency, adding even more damage to your credit.

CREDIT TIP: Avoid collections by working with creditors directly. If you do end up in a collection account, pay it in full as soon as possible. The worst thing you could do is avoid the creditors and collection agencies.

How Can I Improve My FICO Score?

If you have had past credit issues that affect your FICO score, there are strategies you can implement to start improving your score today.

• Payoff All Problem Credit – If your FICO score is affected by negatively closed or collection accounts, immediately pay them in full as soon as possible.

• Get A Secured Credit Card – If you’re unable to get an unsecured credit card, obtain a secured card with a deposit amount. Start making charges and paying your balance in full each month. This will help build your history of reliable monthly payments.

• Get A Personal Loan – Many banks and credit unions will allow you to obtain a personal loan with a savings or CD deposit as security. Obtain a small personal loan, such as $1000, and keep the money in the bank – don’t spend it! Immediately make the first payment and continue making regular payments each month thereafter. Your bank will report your good payment status, and your FICO score can start improving.

Credit is one of the most important personal issues for every consumer. Your credit report and score can determine whether you can get a home loan, a new credit card, and even affect whether you get a job. Treat it with care and you will succeed in keeping your FICO score in a positive range.

Reblog this post [with Zemanta]

Posted in All About Your Credit, Credit Score, Tips and Tools for Improving Your CreditComments (0)

The Obama Plan: What the Bailout Means to People Who Need Debt Relief

The Obama Plan: What the Bailout Means to People Who Need Debt Relief

debt-bailout-and-your-mortgageMillions of Americans are feeling the stings and arrows of the declining economy. In 2008, over 250,000 homes were foreclosed each month – which translates into three million homes foreclosed in the entire year. More credit card debt is racked up each month, and millions of Americans are looking to consumer credit counseling services for debt management help. Now that newly elected President Obama has signed his stimulus bill into law, what does that mean for the average American with debt management issues?

Who the Plan Will Not Help

First and foremost, Americans must realize that the stimulus plan is not “free money.” People who have uncontrollable debt management issues will not suddenly see their debt wiped away. With that said, the plan does provide debt help to those in serious trouble with their mortgages and credit card debt.

Remember that the bill is a financial plan to help stimulate the American economy, not pay off personal debt. However, by helping Americans manage and control debt, more expendable income can be spent on goods and services – which is exactly how the plan hopes to revive the economy.

How the Plan Can Relieve Mortgage Debt

Millions of American homeowners are feeling the financial crunch of extreme adjustable rate mortgage (ARM) interest hikes or job loss, and they find themselves unable to make their regular mortgage payment. With an average of 250,000 homes foreclosed per month, what are homeowners to do?

The mortgage bailout portion of the stimulus package tags $75 billion for the setup and aid of getting mortgage borrowers back on their feet to avoid foreclosure. Though the federal funds will not give you free money to pay off your back payments or reduce your principal balance, the money will be used to set up a government intermediary program that puts qualified borrowers and lenders together to discuss real solutions to mortgage problems.

A homeowner who is suffering a financial crisis and is having trouble meeting mortgage obligations can use the program to help set up and negotiate a loan modification. However, if you are not delinquent on your mortgage and have the financial ability to pay your mortgage, this plan will not help you. In addition, should you have an inability to provide evidence of future employment, mortgage companies are unlikely to help you through this plan either.

A loan modification is a change in the original mortgage terms, such as a lower interest rate or extension of payments that reduces the monthly payment amount. Working with the lender in this fashion could result in the forgiveness of much of the principal balance, limited forbearance, and ultimately, help homeowners keep their homes and avoid the expense and trouble of foreclosure.

The Benefit of Tax Rebates

President Obama has also passed tax rebates for most Americans. Taxpayers will receive a portion of their 2008 paid taxes back to them in cash. Some of that money may be needed to pay back taxes owed or can be spent directly on reducing piling credit card debt.

Americans who are careless about their debt management and spend more than their means will not see much help. It is people who are responsible and are making real efforts to pay off debt who will benefit from the stimulus bill.

Reblog this post [with Zemanta]

Posted in All About Loan Modification, Loan Modification in the NewsComments (0)