Many people would probably cringe at the mere thought of having to file for bankruptcy. But in reality, many are forced to seek out bankruptcy as it is the only viable solution to their debt problem. While nobody wants to have a bankruptcy credit report, in certain circumstances, it can actually be beneficial not only for the borrower but for the borrower’s family as well.

Below is a list of the possible benefits of filing for bankruptcy:

The chance to be free from debts. A Chapter 13 Bankruptcy will discharge you from all your obligations to your creditors. However, it is worth noting that not all types of debts can be discharged by bankruptcy such as student loans, liens, family support, to name a few.

The court shall be the one to decide whether you will be eligible for a Chapter 13 Bankruptcy based upon the result of your Income Means Test. If you fail test, the court may rule a Chapter 7 Bankruptcy which will put you under a five-year repayment plan.

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With our present economy experiencing a slump, people from all walks of life are affected. It does not matter whether you have been a long-time employee for a solid company or a business owner, the fact is that no one is exempted from financial crisis and the consequences it brings.

Today, more than ever, people do seek out bankruptcy not just to get a chance to recover from bad debt but to save their families from being out in the streets as well. This article presents the reasons why people file for bankruptcy.

• Sudden loss of employment. One of the worst damages brought about by recession is the unexpected loss of job. Obviously, getting laid off in the middle of a crisis can be very difficult especially if you are the breadwinner of the family. Aside from not having a regular means of income, being unemployed also means not getting the benefits that a company provides.

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The Federal Trade Commission (FTC) warns consumers against seeking credit repair assistance from scammers and illegal credit repair agencies. True enough, going through a financial crisis can make anyone vulnerable to scams and rip-offs. Recognizing the signs of fake credit repair services can help you stay out of the danger. What are these signs that you should be aware of?

Upfront payment. A genuine credit repair or credit counselling agency must never demand for upfront payment before providing service as it is a direct violation of the laws stipulated in the Credit Repair Organizations Act.

Advises you to lie or use false information. If your credit counsellor encourages you to violate the law, then obviously you are dealing with the wrong agency. For instance, you may be told to declare a different Social Security Number or use your EIN (Employer Identification Number) to change your credit identity.
Lying or using false information to get away from your obligations will not resolve the problem. It will only put you in far worse situation. In the end, you will find yourself in an even bigger dilemma than you are in right now. In fact, you will be charged and prosecuted for the crime of fraud.

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If you are presently struggling with bad credit history or overwhelming debt, do yourself a favour and save some money by helping yourself. Below are some practical credit repair tips for you:

Look into your credit report. When was the last time you looked at your credit file? If you haven’t done so within the past six months, then it’s about time that you order a copy from each of the three credit report agencies (Experian, Equifax and TransUnion).

Did you know that even the smallest error in your report can affect your rating? The good news is that you can undo those errors by sending a dispute letter to the three credit report agencies. After 30 days, you should be sent a reply to your dispute along with an updated copy of your report.

Pay off all debts you can. While it may not be possible for you to pay off all your debts at once, try to pay off as much as you can from your current charges. Pay special attention to your debts with the highest interest rates as these are the ones you want to get out of your way first. Keep up with your up-coming payments. Be sure that you will not again fall behind on your bills.

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To maintain good credit, you need to be constantly aware of the status of your credit report. After ordering a copy of your report, what’s the next step to do?

For some people, examining their reports for the first time can be intimidating. This article talks about the basic information that you should know about what your credit report reveals.

Personal Information

This section contains personal information (name, address, phone number, Social Security number, driver’s license number). It also contains your residential history and employer history. Do not just scan through this part as you could miss errors, incorrect spelling, wrong digits, etc. Bear in mind that even a single wrong detail in your report could bring about complications.

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