My Personal Finance Blog

Very few people have been left untouched by the financial upheavals of recent years. In the good times we tend to spend and not think about it too much. The social pressures to look as though you are “succeeding” are such that when the crunch comes, we find what were manageable debts have now become unmanageable.

People find themselves in a financial situation they never thought that they would be in – one that happens to other people, but never to them. That situation is called bankruptcy.

Bankruptcy no longer carries the social stigma it once did. It is often considered the mark of someone who had the guts to try and go it alone, but failed, through little of their own, (after all, it’s the banks we now all love to blame!)

However, this doesn’t make the actual process any less stressful, and in 2005 the government brought in the Bankruptcy Abuse Prevention and Consumer Protection Act, which made it even more stressful to claim bankruptcy.

One of the main purposes of the Act was to make sure individuals weren’t using the bankruptcy laws simply to avoid debt. By hiding their true earnings and assets, it had been possible for people to claim chapter 7 bankruptcy, where all assets are liquidated but the debtor emerges free of debt, to rid themselves of unwanted debt, and at the same time retain a comfortable standard of living afterward, and with a head start in improving their credit rating after discharge.

Now, anyone wanting to file for bankruptcy has to attend government approved credit counselling.

Anyone attending counselling must bring with them details of their income and assets, and their financial outgoings. They must also supply details of their creditors and amounts owed. This way the court can decide if the more popular chapter 7 bankruptcy is an option, or if in fact the debtor, albeit with a rearrangement of their debts under a chapter 13 bankruptcy, can afford to repay their debts over a period of time, usually 3-5 years. In this way the debtor does not escape the bulk of debt, and creditors get their money.

It will also determine if there are perhaps other ways the debtor could avoid bankruptcy altogether.

One way is by using debt settlement companies, who charge a fee to the debtor, but take over the debt, usually at a reduced amount which they negotiate on your behalf.

The advantage with these companies is that your credit record is nowhere near as badly affected as it is should you become a bankrupt.

However, care must be taken when using one of these companies as many have turned out to be scams, taking the debtor’s cash, but not dealing with the debt itself, leaving the debtor worse off.

As with all things in life, it is research that pays dividends.

Unfortunately, the options to get a new credit card are severely limited for people with less-than-desirable credit histories. The restrictions are so stern, in fact, that many consumers with bad credit are unable to buy simple consumer goods, or are slapped with very high interest rates.

There is good news, however, and it comes in the form of ‘no bank account’ credit cards. These cards allow people with low credit ratings and no bank accounts to enjoy the purchasing power of a credit card.

‘No bank account’ credit cards are usually pre-funded, meaning the cardholder ‘reloads’ it with money in order to use it. This arrangement is perfect for people who want to control their spending and limit themselves only to what they can afford. Most individuals recovering from bankruptcy use this type of card. It not only reestablishes credit history and demonstrates financial responsibility to creditors – it also affords users the convenience of a fully-functional credit card while living within their income.

If you are thinking about getting a ‘no bank account’ credit card, do not hurry – you should first shop around for the best deals.

The best ‘no bank account’ cards offer the same benefits as a regular credit card, such as rewards programs and online access and management. The card should be accepted in millions of locations around the world, and have ATM access for easy cash withdrawals, and other such convenient features.

You should also find a credit card provider that does not ask for annual fees or transaction fees, and offers free customer support either via the telephone or online. Some companies even go so far as to provide ‘wireless alerts’ to ‘no bank account’ credit cardholders – such a service will enable you to easily keep an eye on your account via text messages (SMS). The added features will certainly help you budget your finances even more effectively.

Debt settlement consumer protection act helps you to reap benefits. But how? This is a simple question but needs a serious explanation. This article tries to give that explanation to you. After the Federal economy was hit by recession, thousands of people were thrown out of their jobs by the employers. This created a serious financial crisis for the consumers. They failed to repay their debts and became defaulters. They eventually filed for bankruptcy and pulled down their credit score. They lost their credibility and failed to get any further credit from any creditor for the next 7-10 years that followed.

On the other hand, the creditors also took the hit of the recession. As more and more consumers filed for bankruptcy, the creditors lost their liquidity and they failed to manage their costs. They lost their financial equilibrium and reached the verge of bankruptcy. The economy suffered because of this and rolled further back into recession. The Federal govt. took steps to curb this situation. As a part of the debt settlement consumer protection act, the govt. introduced tax breaks for the creditors and also released billions of US dollars into the economy. The govt. announced that those creditors who agree for settlement deals will get a reduction in taxes and can use the stimulus money released in the market to cover up the costs and the loss that they incur.

It is because of this reason that the creditors started opening up for the debt settlement deals and wiped out a certain percentage of the debt that the consumers have. They incurred loss which is later covered by the govt. policies of tax breaks and stimulus cash. The consumers on the other hand can easily get debt relief through settlement. The only conditions that they need to fulfill is to have an overall consolidated loan of $10,000 or more. Anything less than that is not entertained for settlement. Once the consumers get a good deal, they need to repay the remaining amount of the debt to the creditor in one single payment. This is how the consumers can benefit from the debt settlement consumer protection act.

Debt settlement consumer protection act means a lot for every consumer in America who is burdened with unsecured debts. This means that if you have unsecured debts and if you are an American citizen, the debt settlement consumer protection act will make sense to you. But how? What exactly happens because of this act? Let us find out!

After the US economy went into recession, the consumers, the creditors and the economy as a whole suffered. Thousands of people lost their jobs and they found it difficult to repay their debts. As a result, they became defaulters and finally filed for bankruptcy. Once the consumers successfully filed for bankruptcy, the creditors lost their liquidity and they failed to manage their costs. It is because of this reason that the creditors lost their financial equilibrium and they will eventually reach the verge of bankruptcy. This forced the economy to roll further back into recession. This is a critical situation and to cure this ailment, the Federal govt. announced tax breaks for the creditors and alongside this, the govt. also released billions of dollars into the economy. It announced that the creditors who agree for settlement deals will enjoy a reduction in the taxes and can use the stimulus money released into the market to make up for the loss that the creditors bear.

It is because of this reason that the creditors opened up for the debt settlement deals. The loss that they bear because of the money that they lose due to settlement is covered by the govt. policies. The consumers began to benefit from this. Those who have an overall credit debt of $10,000 or more can get settlement and elimination of the debt by a certain percentage. The consumers are then required to repay the remaining amount of the money to the creditor in one single payment. Once they pay off this balance, they become debt free. This is what debt settlement consumer protection act will mean for you!

People Around the globe are making efforts to get out of the huge debts which have turned their lives upside down. People are in situation of distress and they are unable to survive in such depress conditions. Most of them are trying to camouflage from these upcoming issues related to debts. They are being very peculiar in handling these debts with caution. Through debt settlement firms, people are getting relief from their massive liabilities but on the cost of high charges. By signing an agreement with these reliable companies, many people were able to circumvent their loans

Recently, a different scenario has come in front of the people where the representatives of the government have decided to propose legislation against these firms to minimize their charges to provide solutions to the people who are under the burden of huge debts. This was laid down in an act named “The Debt Settlement Consumer Protection Act introduced by Charles Schumer and Claire Mc Caskill”.

These new modifications have given an opportunity to people so they can make amendments in the following conditions provided by the debt settlement companies. Because of the introduction of these new laws, the experts are authorized to restrict the financial institutions for changing their rules. The new laws have given a relief to the consumer as the debt settlement companies have to control them accordingly.

The new legislation has provided people with a clear vision that if anybody is willing to settle the debts, then they should not make disbursements to their moneylenders because a bargain basement is required. If the settlement deal with the creditors become successful, then the clients are liable to pay them for their service charges. The Documentations are must in dealing with any financial agreement in order to have security and these citations will be providing details of the settlement before charging their client any fee. Through this act of legislation, the consumer protection has been increased as the FTC can take severe actions against the companies providing debt relief. The new laws also restrict people to file for bankruptcy as there are legitimate options prevailing in the market.