A Brief Explanation of Bankruptcy And A List Of DONT\’S Part 1
Filing for bankruptcy is a big deal. The most extreme of all financial makeovers, financial analysts continue to warn us that it should be a last resort that should not be entered into without knowing what you are doing.
Bankruptcy is stamped onto your credit report for a full ten years. And without a decent credit report, your ability to obtain a car, living situation or employment could be greatly hindered. If you are filing, do your best to plan for your bankruptcy.
In America, there are five chapters of bankruptcy that you can file for. Chapter seven is the most common form. When you file Chapter 7, a trustee will collect non-exempt property and then they will sell it and distribute the proceeds to your creditors. Chapter nine is a bankruptcy that is only available to municipalities. It\’s pretty much a form of reorganization, not liquidation.
Chapter eleven, twelve, and thirteen are more complex and they involve letting the debtor keep some or all of her property while they use future earnings to pay off the debt. Most consumers file chapter seven or chapter 13. Chapter 11 filings are mostly for businesses, individuals are allowed, but are rare. Chapter twelve is similar to Chapter 13 but is only available to \”family farmers\” and \”family fisherman\” in certain situations.
Now for the list of bankruptcy DON\’Ts.
First off, don\’t use your credit cards once you\’ve made this decision. It\’s just a bad idea to incur even more debt that you don\’t intent to repay. It makes you look suspicious, and you could lose your right to cancel out the debt in the bankruptcy. Thing is, there were bankruptcy reforms in 2005 that lowers the threshold on so called luxury purchases to five hundred dollars and extended the abuse period to ninety days before filing. Anything you buy in this period will be under extra scrutiny.
Mallory Megan is employed by a debt collection company. She also composes articles on business and finance, consumer spending and collection agencies. Grab a totally unique version of this article from the Uber Article Directory
Medical Debt Relief Act Evens Things Out….Sort Of
From 1999 to 2009, premium costs for family insurance have risen by one hundred and thirty one percent. That\’s easily over three times the rate at which wages rose during this time. In the recession, millions of jobs have been lost, putting workers who just lost their jobs at risk of also living without health insurance. For those who remain employed, employers are pushing more of the costs of health insurance onto their workers as they struggle with economic uncertainty. Then there are blue collar and retail workers, waitresses and the like who are paid less, work harder and are not offered health insurance plans at their jobs. No wonder that Americans are struggling to pay their medical bills.
In 2007, about seventy two million Americans struggled with their medical bills. A large amount of these people made paying off their medical bills their top priority, while they had to struggle to pay for basic necessities like food, rent or heat. More than THIRTY MILLION American adults used up ALL of their savings or BORROWED AGAINST THEIR HOMES in order to pay off medical bills. Unfortunately, in this time of economic hardship, many Americans could not stop the bill collector from knocking on their door.
Thirty million Americans are contacted every year by collection agencies for delinquent medical bills; many struggle to pay these. Many people are unclear as to why their insurance refused to pay a claim, others are confused about the amount they owe. Over half of people who were surveyed said that they were puzzled by the medical jargon on their bills, and one in four said confusion led them to allow bills to go past the due date or to be sent to a collection agency.
A medical bill that is being sent to collections will typically be reported to credit bureaus. Unpaid debts will results in a lower credit score. Medical accounts, even those that have been fully paid off will remain on a credit report for up to seven years. This will result in lower credit scores and increases the costs of mortgages, car loans, or credit card interest.
Luckily, Ohio Congresswoman Kilroy saw the consequences of outstanding medical bills. She decided to take action because she saw medical debt as unique. She introduced The Medical Debt Relief Act, which states that medical debt that is fully paid off or settled must be removed from a consumer\’s credit report within thirty days.
Although this does not fix our botched healthcare system, it would provide relief for those who have paid off medical debt, while the rest of us wait for better health care reform.
Mallory McGuinness is employed by a debt collection agency. She also does articles on business, finance, consumer spending, and debt collection. This and other unique content \’rmcb collection agency\’ articles are available with free reprint rights.