What is Bankruptcy?

Bankruptcy is a legal procedure in which a defaulter makes it known publicly that he lacks the funds to repay any dues. A court order sought for and released by the debtor, the purpose of bankruptcy is to gain time to repay his debts or even get a reprieve from some of the dues. Filing for bankruptcy must be done only in consultation with an attorney, as it has can have detrimental effects on your credit score and reputation. A bankruptcy claim is a black mark on an individual’s credit report, lasting for ten years. In this tenure, the individual can no longer seek any credit from other sources. Bankruptcy claims make it difficult to buy a car, rent a house, or do any financial planning, as he has become a risky proposition by creditors.

Bankruptcy Counseling:

Bankruptcy counseling involves receiving advice and guidance from debt counselors on the consequences of filing for bankruptcy. Before deciding to take this drastic step, one must first understand the following:

• What does filing for bankruptcy entail?
• What are the consequences of filing for bankruptcy?
• What are any alternatives to filing for bankruptcy?
• What type of bankruptcy should one file for? (which chapter in the US, or which segment in any other country)

Facts About Bankruptcy Counseling:

The following should be noted about bankruptcy counseling:

• A bankruptcy counseling session is taken prior to filing for bankruptcy.
• Counseling may take place over the phone, online, or face- to-face.
• A session can last up to 90 minutes
• Bankruptcy counseling can be undertaken from federal agencies like the National Foundation for Credit Counseling or from private sources.
• A bankruptcy counseling session from an authority offers a certificate of completion for the course. This certificate is to be included along with the bankruptcy petition upon filing for bankruptcy.
• Bankruptcy counseling sessions are mandatory as part of the pre-filing process.
• The agency providing the bankruptcy counseling session must be approved by the Executive Office for US Trustees.
• Agencies in North Carolina or Alabama must be approved by the local banking administrator.
• For individuals filing for bankruptcy under chapters 7 or 13, participation in a counseling session is mandatory within 6 months of filing the petition.

What Is Involved in a Bankruptcy Counseling Session?

Included in a bankruptcy counseling session should be:

• An overview of the process of Bankruptcy filing.
• A discussion regarding the advantages and disadvantages of filing for Bankruptcy.
• A look into the alternatives that can be sought instead of filing for bankruptcy.
• An analysis of the circumstances leading to the debtor’s situation.
• A personalized budget plan for the debtor.
• Guidance on measures to help address the bankruptcy situation.

By making it mandatory, bankruptcy counseling has become a timely intervention on the part of the federal government to help individuals facing this devastating financial situation. Bankruptcy counseling can be a blessing for debtors, providing an opportunity for them start afresh financially.

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Not Planning in Advance 

The majority of consumers pay their premiums such as health, car, home, and other insurance costs, annually. If you do not plan ahead, the sudden appearance of one of these large bills can throw your monthly budget dramatically off track, not only causing stress, but derailing your financial planning strategy. For financial security, leave a cushion for unexpected costs, and distribute the money for your insurance bills between all twelve months of the year instead of allowing them to pile up all at once.

Caving in to Pressure

Advertisements and pushy salespeople are paid to get you to part with your money. Avoid falling victim to these by practicing using the word “NO.” When you see an attractive advertisement, ask yourself if you really need what they are selling, and look at your shopping list to reinforce your answer. If it is on your list, go for it; if not, keep walking. Sales people will cajole, compliment, degrade and try just about every trick in the book to get you to buy their products. A good way to respond is to listen to their pitch and politely inform them that you will consider it for another time.

Improper Use of Unexpected Money

Sometimes we get money that was not planned for, and thus is deemed “extra”. Funds from sources such as inheritance, a tax return, gift money, or even a bonus from your job all fall under this category. Most families use these funds to splurge on vacations, luxuries, or items that were on the original spending plan, thus adding to their savings. A better way to put unexpected funds to good use is by immediately using half to add to your savings account, a quarter to pay down any credit card debt, and the remainder for family fun so you do not feel that you are denying yourself. Another option is to make any previously planned large purchases while you have cash. This will allow you to reduce your interest payments and give your budget breathing room for the rest of the year.

Impulse Purchases

There is no replacement for the little pleasures of life, but that does not mean you should spend money on them freely. Small impulse purchases are one of the fastest ways to reduce your savings to zero without ever knowing where that money went. To cut down on these little expenses, make a list before you go to the store—and that means any kind of store. Only purchase the items on your list, unless of course you forgot to add your medication or something critical to the list. Plan “fun” money into your budget and use it where it will do the most good. This way you can allow yourself to buy some of those small things without feeling guilty or losing sight of your long term strategy.

Underestimating the Cost of Ownership

When you make a large purchase—or even a small one, in some cases—there are additional charges that come along with that purchase. For example, buying a car adds monthly cost of gas, insurance, and maintenance. If you do not buy it outright, you also have to include interest charges. The same goes for purchasing expensive electronic devices, a home, or major appliances. By including these hidden expenses in your plans you can stay within your budget without depriving yourself.

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Proper Examination of Client’s Background

A reputable credit counseling agency will first and foremost assess the financial background of the client completely. The credit counselor will also try to get to the root of the problem before offering a solution, so as to help you overcome your debt in the fastest and least painful way possible.

While some people may be facing a problem with credit card debt, others may be caught in a bad financial situation owing to previous or pending loan payments. Some may have entered this precarious situation because of behavioral issues such as gambling or a spending addiction. Unforeseen emergencies such as illness, divorce, or loss of job can also drive people to get stuck in a bad debt situation.

You should do some research and choose the right credit counseling agency by staying clear of any that impose high interest rates and hidden charges. It pays to avoid any agencies that compel you to sign up for the agency’s debt management program without scrutinizing your credit report.

Assist With a Plan That Works

A reliable credit counseling agency will not only help the customer to manage his debt repayments and get out of bad debt, but will also help them manage their personal finances more effectively. Besides suggesting a suitable debt repayment plan, your credit counselor should also give good advice regarding responsible expenditures, saving money, budgeting, and other financial management skills.

Execution of Plan

Following a complete evaluation of your financial position, the credit counseling agency should be able to help you with the execution of the debt management plan until you are free of your debt. Customers should make an effort to attend all the credit counseling sessions without fail for maximum assistance and to help the counselor stay up-to-date on any progress that you have made.

Reputation and Credibility

As previously mentioned, it pays to do a bit of research before selecting a credit counseling service. You can check whether the agency you choose is a member of a renowned credit counseling organization like the National Foundation for Credit Counseling or the Association of Independent Credit Counseling Agencies. Finding the right agency to help you can allow you to settle your dues as quickly as possible and restart your life afresh.

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Is Credit Counseling Right for You?

A credit counselor can work with your creditors on your behalf to reduce both your interest rate and minimum payment on your credit card. In this way you will be able to settle your dues effectively and improve your credit score.

If your attempts to negotiate with your creditors have failed to give the desired results, then you can try and work out a payment plan before seeking the services of a third-party. But, even if this fails to yield the desired results, you can seek the help of a reputable credit counseling agency to help you overcome your financial issues as quickly as possible.

Even if you are thinking of filing for bankruptcy, the bankruptcy law has made it mandatory to receive credit counseling from a creditable credit counseling agency within 180 days of filing. Avoiding credit counseling will prevent you from going ahead with your bankruptcy filing.

Working With a Credit Counselor

You can use sites like www.nfcc.org and www.aiccca.org to find the best credit counseling agency to suit your needs. Your credit counselor will inform you about your negotiated monthly payment after speaking with your creditors. At this stage, you should be clear regarding the actual payment that will go to your creditors and the amount that will be retained by your credit counselor as a fee. You should also follow up with your lenders and creditors to know whether they are receiving payments from the credit counselor or not. If you miss more than two payments, your creditors can drop you from the program and your interest and payments may return to their original rates.

Credit counseling can help make your debt more manageable and gradually improve your credit score as your payments are reported on time. By staying with the same credit counselor for two to four years, you can enjoy debt recovery and an improved credit score. Credit counseling is the best way to overcome your financial crisis and start your life afresh. To find out more about the benefits of credit counseling, look online for agencies near you!

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What to Look For In a Consumer Credit Counseling Service

You should research and select a credit counseling agency that is trustworthy before disclosing your financial information. There are several factors that are crucial to the right agency. For instance, take care to select an agency that is affiliated with a national association, such as the National Foundation for Credit Counseling (NFCC). Also, figure out the details of the company before disclosing information about yourself. Important information like certifications, licenses, complaints and affiliations of the company should be cross-checked before trusting it you’re your finances and your future.

Additionally, find out about the services provided by the agency during the interview. Once you have reviewed all their terms fully, you can provide personal information like your social security number. It is also recommended that you sign the documents after going through the them carefully at home. The counselor you work with should be polite, easy to talk with and non-judgmental.

The fees pertaining to credit counseling varies widely from one agency to another. One option is to choose a non-profit agency that may be able to work out a debt consolidation plan for you entirely free of charge. If the cost of an agency is very high, consider searching for other affordable credit counseling agencies in your location or online.

What to Expect From a Counseling Service

You should be able to discuss all information pertaining to your debt and financial status within a private area, or discreetly with your counselor within the credit counseling office.  Obtaining your online credit scores and reports can go a long way to clearly understanding your financial position. Based on a scrutiny of your situation, your debt counselor should be able to draft out a budget plan that covers both your payments to creditors as well as living expenses. The counselor will then begin negotiating with your lender for forgiveness of fees and lower interest rates. If all of these things are not enough to yield the necessary results, you may be asked to go in for debt consolidation. The agency will start paying all of your creditors on a monthly basis following your debt consolidation. Your credit card will be closed if and when you opt for credit counseling. While a credit counselor cannot solve all of your problems overnight, he can surely help you to regain better control of your finances. While there is no easy way out of a sticky financial situation, credit counseling services are the surest way to enjoy financial stability after a period of hard work.

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For many people in America it has become a habit to spend overtly and get into debt. Intervention may be needed to help them emerge from the debt trap into which they have trapped themselves. Since overcoming debt can be a serious challenge, debtors can utilize the aid of reliable counseling services to set themselves free from their financial bind and start afresh.

People who already have a poor credit score should take care to get their finances in order by seeking the help of a credit counseling agency. Because continuous default on your credit card payments can lead to the denial of car loans or bank loans for mortgages, it is important to resolve this issue quickly. If your credit history has been damaged by unpaid debts, it can be extremely difficult to get ahead in business or life.

Debt management services can not only help you with debt recovery but can also offer assistance with debt restructuring. Some agencies can even negotiate loan payments for you by representing you with your creditors. Through credit counseling you can become more knowledgeable about your current financial position and the steps you need to take to improve your financial situation. It is stressful to deal with perpetual disturbing calls or letters from creditors, and this can take a toll on your health. Additionally, constant anxiety and stress can interfere with your performance in the workplace. By taking action to resolve your debt situation today, you can make a better future for yourself tomorrow.

Credit counseling is offered free of charge by a number of debt consolidation companies. You can regain control of your finances by taking advantage of this resource. Have your monthly budget reviewed by a financial expert. You can seek credit counseling help for:

• Reducing or eliminating interest charges from your credit cards.
• Saving money for the future.
• Preventing bankruptcy.
• Avoiding harassment from creditors.
• Repaying your debts with one simple monthly payment.

Do some simple research to find the best credit counseling agency for you. Most reputable credit counseling agencies do not charge a fee for the initial visit. By being transparent and revealing your exact financial position, you can be given better advice to deal with your financial crisis.

Seek credit counseling help today to set yourself free from the worry caused by debt. Credit counseling has millions to find peace of mind and financial security for their families. Repaying your loans and managing your debts can be a stressful endeavor on your own. With a credit counseling service, you can secure the best returns available for your future by learning to manage your finances and investments in a sustainable way.

The post Why Should You Choose Credit Counseling to Help Manage Your Financial Obligations appeared first on Alliance Credit Counseling.

Debt Help through Credit Counseling Services

By working as an intermediary between consumers and credit card companies, credit counseling agencies can help you recover from your debt by putting your finances in order. Credit counseling services can benefit you in a number of ways, including the following:

Review of Your Budget

On the basis of a review of your financial situation, your counselor can create an affordable monthly payment plan that can be agreed upon by both you and your creditor.

Time

Debt repayment can proceed for a period of 5 years, based on the size of your debt and how much you can afford to pay each month.

Cost

The fee for credit counseling services depends on your ability to pay. While some agencies may accept monthly payments, others expect an payment upfront. You should understand the terms and conditions completely before signing any credit counseling agreement. You can also come to a final decision after comparing various credit counseling services personally or online.

Debt Repayment Plan

Depending on the terms of your new repayment plan, your creditors will be paid a monthly amount. You should keep a regular running tab to monitor that promptness and regularity of the payments to your creditors.

Interacting with Creditors

Your credit counselor will communicate directly with your creditors on your behalf once your debt repayment plan has been finalized. This saves you the stress of threatening letters and frustrating phone calls from creditors.

Fee Waivers

While your credit card balances cannot be reduced through counseling services, your interest rates and credit card fees can be lowered with this type of debt help. This can enable you to clear the pending amounts within a shorter span of time. However, it is important to remember that any debt that cannot be repaid within five years may not be eligible for resolution through credit counseling.

Debt Settlement: to Avoid Bankruptcy

Debt settlement is the only option in the event that your credit balances are so high that you are planning to file for bankruptcy. In such a situation, a debt settlement company can negotiate a reduced amount on your behalf to pay off your debts. If this is agreeable to your creditors, you will then pay a smaller quantity than the actual amount borrowed to settle your debt. You should take care to pay for settlement service only after receiving an itemized cost statement and written documentation of the services provided. Debt settlement services advise clients to save money for paying the settlement amount instead of paying their creditors. While this can damage your credit, this is the only option if you are planning to file for bankruptcy.

The post Credit Counseling and Debt Settlement – Know the Difference appeared first on Alliance Credit Counseling.

With the help of this fund, qualified home owners can obtain an interest-free loan of up to $36,000 to pay their mortgage and allied expenses for up to three years. In addition to future payments, the loan can also be used to make all the mortgage payments current. You can bring down your monthly payments to an affordable level or refinance an expensive second mortgage by taking advantage of the second mortgage refinance program.

Who Can Apply?

Completing the eligibility questionnaire is mandatory before applying for the N.C Foreclosure Prevention Fund online or in person. To be eligible, home owners must:

1. Be a legal U.S. citizen.
2. Own a primary residence in North Carolina.
3. Be experiencing financial hardship through no fault of theirs, or an issue such as serious illness, divorce or death of a co-signor, and searching for employment.
4. Be able to make their mortgage payment once assistance ends.

In addition to the above, the home owner should have experienced this temporary financial hardship or loss of job after January 1, 2008, and their mortgage payment history record should have been in an acceptable condition prior to their income loss or recent unemployment. Other than those listed above, the agency will also consider certain other factors when approving applicants for the N.C. Foreclosure Prevention Fund.

How To Get Help?

If you are found eligible to receive funds under the N.C Foreclosure Prevention Fund should:

1. Get in touch with a housing counselor in a partner agency located near you.
2. Call 1-888-623-8631 (Monday to Thursday, 8:00 a.m. to 9:00 p.m.; Friday, 8:00 a.m. to 8:00 p.m.; and Saturday, 9:00 a.m. to 5:00 p.m.)

By working through HUD-approved counseling agencies across the State, the N.C. Foreclosure Prevention Fund helps struggling homeowners by offering:

• Free help with respect to foreclosure prevention
• Details pertaining to other housing help programs in case they are not eligible for a loan under the aforementioned fund.

Before contacting your local housing counselor for help, you can read through the complete eligibility questionnaire online. Before scheduling an appointment with the housing counselor, gather details regarding the types of documents that should be brought along with you. 

The post North Carolina Foreclosure Prevention Fund – Who is Eligible to Apply? appeared first on Alliance Credit Counseling.

The NC Foreclosure Prevention Fund offers interest-free loans to qualifying home owners in North Carolina to help save their homes from foreclosure.

The program offers various solutions to assist different categories of people—namely the unemployed, under employed and those seeking employment. Under this program, property owners can receive:

• Monthly mortgage payments even while availing unemployment compensation.
• Monthly mortgage payments while taking part in a retraining program.
• Up to $30,000 of a second mortgage.
• A vast portion of the pending mortgage amount.

The duration and extent of assistance under this program vary depending on the property owner’s needs and circumstances. The maximum loan amount is fixed at $36,000, or up to 3 years of assistance.

NC Foreclosure Prevention Fund – Program Benefits

• Pay off previous pending payments.
• Make mortgage payments promptly and easily.
• Pay off a current second mortgage (can enable property owners to pay their primary mortgage without hassle).
• Possible forgiveness of the loan.
• For second mortgages, repayment can be made in 30 years. The only exceptions to this rule lie under conditions of home sale, ceasing to be the principal residence, or refinancing. 
• Homeowners who qualify can stop foreclosure proceedings against them for a period of up to 120 days. The N.C. Housing Finance Agency is responsible for placing a temporary stay of foreclosure.

Eligibility Requirements

Homeowners must meet the following criteria to be eligible for this program:

• Should have been unemployed owing to economic conditions since January 1, 2008.
• Should be eligible for unemployment compensation benefits (some exceptions exist).
• Should have possessed stable employment and maintained a good credit history before losing their job.
• Should have a mortgage that is secured by real property.
• Should be a legal U.S. resident with their primary property in North Carolina.

How to Apply for the NC Foreclosure Prevention Fund?

You can approach any one of the reputable credit counseling agencies in your area or online about getting assistance under this program. The credit counselors may ask you to participate in a brief telephone interview to ascertain your eligibility for the loan. Once you are found to be eligible, you will be called for a more comprehensive interview. Offered by the North Carolina Housing Finance Agency, the North Carolina Foreclosure Prevention Fund is funded through the U.S. Department of Treasury’s Hardest Hit Fund®.

Conclusion

You can avoid foreclosure on your home by receiving assistance under the North Carolina Foreclosure Prevention Fund. To know more about the program and ways of getting assistance, contact your nearest housing counseling agency today! The NC Foreclosure Prevention Fund can come to your rescue!

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Financed through the U.S. Department of Treasury’s Hardest Hit Fund, the NC Foreclosure Prevention Fund is a boon to home owners facing foreclosure of their properties to tide them over until their financial crisis blows over. The NC Housing Finance Agency offers this type of foreclosure help by partnering with all participating HUD approved housing counseling agencies. Property owners can know more about this type of foreclosure help or assistance by logging on to www.NCForeclosurePrevention.gov.

Home Protection Program and Loan Fund

The North Carolina Foreclosure Prevention Fund is based to a large extent on the successful, smaller Home Protection Program. The North Carolina Home Protection Program and Loan Fund is another type of NC foreclosure help, or assistance program, that enables workers who have lost their jobs (resulting from bad economic conditions) to avoid foreclosure of their homes. This program was designed by the General Assembly in 2004 and is operated by the North Carolina Housing Finance Agency. To qualify for a loan under this program, you must meet all of the following criteria:

• Should have had a stable job and a good credit history prior to your losing your employment.
• Should have lost your job owing to precarious economic conditions
• Should possess a mortgage that is secured by real property
• Should be able to repay your mortgage amount following the end of assistance

Assistance from this program is available on a first-come, first-serve basis. Homeowners can contact the Home Protection Program Counseling Agency in their area to seek assistance. The power to approve or deny loans is wholly vested with North Carolina Housing Finance Agency.

The temporary 120-day stay of foreclosure is the characteristic feature of the aforesaid program. The stay of foreclosure will be imposed once the property owner’s filled-in application is received by the Agency as under the North Carolina statute. While the stay can safeguard the homeowner from foreclosure, it cannot safeguard against late payments being mentioned on his credit report, collection, or payment of any mortgage-related obligations.

State Home Foreclosure Prevention Project

Created by recent legislation on August 17, 2008, the State Home Foreclosure Prevention Project (SHFPP) is now led by the Commissioner of Banks in partnership with other agencies. The Project works to bring down the number of subprime foreclosures in North Carolina. Project partners include legal assistance organizations, housing counselors, community organizations and mortgage services.

Conclusion

Out of many offers of assistance for foreclosure, the North Carolina Foreclosure Prevention Fund is the most effective, helping you to stall foreclosure proceedings on your property almost instantly. Through the NC Foreclosure Prevention Fund, you will be able to make affordable mortgage payments and avoid foreclosure.

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