The repo man doesn't care that your finances are in limbo because you have recently divorced or that your employer informed you in the eleventh hour that you were being laid-off. The repo man only cares about the fees that they will receive once they recover your vehicle. So, you must protect yourself.

Here's an old fashion remedy for fighting the Repo man: If you know you will be able to come up with the money needed to pay your outstanding car note in a couple of months or so, switch cars with a friend until you get your finances straight. Better yet, HIDE IT in someone else's garage for a while. Make sure it is someone you did not list as a reference on the credit application because the Repo man will definitely check their addresses in search of your vehicle.

I know a guy who switched cars with his brother who lived in a different state. Within three months, he straighten out his finances and paid his three month delinquent car note to date, plus late fees. He saved himself the high cost of repossession and storage fees, deficiency costs, and the embarrassment of having his car repossessed (neighbors do watch).

The trick is to stay a step ahead of the repo man. Know their moves before they strike. This will help you prevent repossession, and the expense that goes along with it.

A. M. Harris is the author of The Broke Man's Survival Guide: 50 Clever Strategies to Use When You Are Unemployed, Underpaid or Just Dead Broke and Can't Pay Your Bills. For more information visit http://www.brokemansurvivalguide.com or call 1-888-340-4433.

-Develop a budget. While many people dread this very important step in reducing debt, it can be extremely important in taking control of your financial situation. Compare and contrast fixed expenses-mortgage payments, rent, car payments, and insurance premiums, for example–with variable expenses, such as entertainment and recreation. List all your expenses, even those that seem unimportant. This is an important step in determining your spending patterns, prioritizing expenses, and determining whether or not you have additional money to contribute to the monthly payments on your credit card.

-Consolidate, consolidate, consolidate. While debt consolidation is a sometimes daunting and drastic step, it can be an important move in the quest to reduce your credit card debt. If you're a homeowner, consider a second mortgage or a home equity loan to pay off high-interest rate debt. While these loans often require you to list your home as collateral, remember that if you start skipping out on credit card payments, you could easily lose your home. What's more, these loans provide tax advantages that are not available with many kinds of credit.

-Go to counseling. Credit counseling, that is. Many credit counseling organizations will help you come up with a feasible solution for ridding yourself of debt. You can find credit counselors on the Internet, and many credit unions, universities and military bases provide credit counseling programs.

Also, get in touch with your bank, friends, and/or family for a recommendation. Some of the services credit counselors provide: Advice on how to manage your debt, assistance in developing a budget, and classes and workshops that are geared towards teaching consumers about money management, credit card debt, and budgeting. Counselors can also recommend a debt management plan (DMP), which allows you to make monthly deposits to the specific counseling organization that you're working with. Your counselor will then develop a payment schedule with your creditors that includes lower interest rates or waives certain fees.

For more suggestions and information on how to manage your credit card debt, please visit http://www.informedcredit.com.

Beth West has an extensive background in marketing and public relations, serving in management positions in both the hospitality and software industries. Currently acting as the Director of Marketing for InformedCredit, Beth is also trying to launch a freelance writing business.

The Enterprise Act 2002 (bought into force in April 2004) was made to give honest people a fresh start in life, which would be free from the stress of debt. Not for the purpose of encouraging people to "use insolvency as a way of shaking off creditors". The writer implied that the provision, which allows the IP to request a restriction order on a bankrupt, is hardly used. Perhaps this is because, people who lodge petitions for bankruptcy have not gone out to get themselves into huge amounts of debt and are genuinely unable to repay their debt due to unforeseen circumstances, rather than fraud, recklessness or dishonesty.

If an Insolvency Practitioner suspects fraudulent or criminal behaviour, they will apply for a Bankruptcy Restriction Order (BRO) for the court to assess and decide what action to take.

The writer also states that "New" Government proposals due out in the next few days will make it easier for creditors to set up plans for repayments, an "Individual Voluntary Arrangement". Individual Voluntary Arrangements (IVA's) have infact been around since the 1986 Insolvency Act and used by employees and self employed people.

This only further questions the credibility of the writer and The Mail on Sunday for publishing such an article.

What the writer also doesn't realise is, people who have failed IVA's or not able to get an IVA add to the percentage of people petitioning for bankruptcy.

The worry that this article will have placed on people is not only unnecessary, but also misleading. The reduction in the terms of discharge from bankruptcy is supposed to be a positive change in The Enterprise Act 2002, not a negative one as implied in this article.

If you have sought advice, and you know you have no other option than to take the bankruptcy route then you should not be put off. "Nothing has changed", as Simon Wiggins of Ask the Expert informed one of his posters who read the article and was concerned by it.

If you would like further advice regarding your financial situation FCL Debt Clinic offer free debt advice which will enable you to see what your options are regarding resolving your debt problems.

Nicola Bullimore has been working with people regarding debt issues for a number of years. For more information regarding debt, please visit Debt Questions

You're in complete control in this area. And all it takes is some imagination and discipline-both of which are free.

Below are five major ways to save money in the basic areas of food, shelter, clothing and transportation. They're major expenses in your life – and places for major savings.

1. Home Cooking

Food is a major expense in everyone's budget.

But, in today's convenience food society, it's easy to overlook how much money can be saved by cooking meals at home. Plus, it's fun, creative, and healthier to make your own meals.

The key is to cook in "bulk" to stretch the food you buy over several meals.

If you're a busy person with little time to spare, a good investment is a slow cooker (or crock pot). Generally, they run from $20 to $80, depending on the size.

With a slow cooker, you can set aside some time on the weekend to cook stews, soups, and other delicious meals that can be frozen for weekday use.

After a hard day at work, all you have to do is pop the meal in the microwave!

More than likely, you'll enjoy an additional benefit – your taste buds will wake up from mass produced food and thank you for the delicious taste of a home-cooked meal!

2. Drive less, exercise more

Is owning a car expensive?

You already know the answer to that question, don't you?

Gas, maintenance, insurance costs. Plus the mental aggravation of being caught in traffic jams!

Why not carpool or take public transportation-the bus, train, or light rail?

Or, if you live close to work, walk or bike. You'll lose weight, lower your blood pressure, and see the world at a slower pace.

And, oh yes, you'll save a couple of thousand dollars in the process.

3. Cut housing costs

This is an easy and fun way to cut costs.

Instead of paying a contractor to come in to make changes or repairs, make them yourself.

Local hardware stores love your business and will help you with tips and tricks on home repair.

Also, do your own decorating and painting. You get two benefits by doing your own changes and repairs – you get the pride of accomplishment and you save money.

4. Cut clothing costs

This can be another major area of expenses, especially if you have a family.

So, try buying used clothing… dry clothes on the clothes line instead of in a dryer… learn how to mend clothes…

…well, you get the idea!

5. Quit your addictions

Okay, so this is not really an easy category, but if you enjoy cigarettes and a drink, this is where you can realize some major savings.

Assume you're spending $5.00 a day on cigarettes. Added up over a year, that's an expense of $1825.

As for liquor or wine, we all know how expensive that is.

Assume you buy one bottle a week at $10 to share with family members or friends. That's $520 a year.

Add both amounts up, and the total is $2,345!

That's money that could be paying down your debt or going into savings.

And don't forget the health benefits.

You probably have many other ideas on how to save money in the five areas.

If it seems hard at times to cut costs in these places, remember one thing – you're on the road to keeping more of your money in your own pocket!

As the old saying goes: "Money saved is as good as money earned".

About The Author

Paul Davis writes for Debt Elimination 4U, showing ordinary people how to get out of debt and stay out! Visit the site at: http://debt-elimination-4u.com

Tip Number 3 – Your phone bill is another easy target when it comes to looking for ways to save money. Once a year, review your phone bills for the previous three months to see what local, local toll, long distance, and international calls you normally make. Write these figures down and then call several phone companies, which provide service in your area. Using the phone usage amounts you previously wrote down compare what these other providers offer in order to find the cheapest calling plan that meets your needs.

Another popular money saving alternative is a bundled package. A bundled package offers local, local toll and long distance, and possibly other services at a better rate then you would normally pay separately. Be sure to also check your phone bill to see if you have optional calling features or additional services, such as inside wire maintenance, that you don't need. Every non-essential option you drop could save you $30 or more each year.

Tip Number 4 – When making your phone rate comparison as outlined in tip number 3 make a mental note to identify if you make very few toll or long distance calls. If so then avoid calling plans with monthly fees or minimums. Another option would be to disconnect your phone service altogether and use dial around services such as 10-10 numbers or prepaid phone cards for your calls. When shopping for dial around service, look for fees, call minimum, and per minute rates. Treat prepaid cards as cash and find out if there is an expiration date.

Tip Number 5 – If you make a large amount of your phone calls away from your home make sure to shop around to find the best deal on cell phones and calling cards. Make sure to compare per minute rates and surcharges for cell phones, prepaid phone cards, and calling card plans to find how to save the most money. Cell phone plans offer so many options that failure to compare and find the best one that closely matches your calling patterns is like throwing money down the toilet.

These 5 quick tips could easily save you several hundred dollars a year, which you could put to better use in a savings program or to pay off higher interest loans and other bills.

Timothy Gorman is a successful webmaster and publisher of Best-Free-Insurance-Quotes.com. He provides insurance information and offers discount auto, life and home insurance that you can research in your pajamas on his website.

Other websites operated by Tim: Cellular-Phone-Solutions.com – Free information and resources regarding cell phones and cell phone plans.

Military-Loans-Online.com – Which provides free money saving loan quotes on all of your loan needs to include home equity loan information.

Tip Number 3 – When it comes to purchasing over the counter medicine brand name drugs are usually much more expensive than their generic equivalents, ask your physician and pharmacist if a less expensive generic or an over the counter alternative is available. Purchasing the equivalent generic drug can save hundreds of dollars through out the entire year. With the emergence of online pharmacies the opportunity to save even more money on medicine is significant. Take the time to search online for the best deals.

Tip Number 4 – With the high cost of gasoline draining consumer's pocketbooks any way to save money in this area is a welcomed tip indeed. You can save hundreds of dollars a year by comparing prices at different stations, pumping gas yourself, and using the lowest-octane called for in your owner's manual. You can save up to $100 or more (depending on your vehicle) a year on gas by keeping your engine tuned and your tires inflated to their proper pressure.

Tip Number 5 – Your vehicle can place a huge strain on your budget if you fail to perform routine repairs on your car when they are needed. The most important step that you can take to save money on these repairs is to find a skilled, honest mechanic. Be sure to aggressive shop around since not all auto mechanics charge the same amount for repairs and the quality of work performed is different based on the skill of the mechanic.

These 5 quick tips could easily save you several hundred dollars a year, which you could put to better use in a savings program or to pay off higher interest loans and other bills.

Timothy Gorman is a successful webmaster and publisher of Best-Free-Insurance-Quotes.com. He provides free money saving insurance information and offers discount auto, life and home insurance that you can research in your pajamas on his website.

Other websites operated by Tim: Cellular-Phone-Solutions.com – Free information and resources regarding cell phones and cell phone plans.

Military-Loans-Online.com – Which provides free money saving loan quotes on all of your loan needs to include home equity loan information.

CREATE THE SHEET

Start with either a sheet of legal paper — or a spreadsheet program — and create 12 columns. Label the top of each column with a month of the year, from January to December (duh!) Each row on your sheet will represent a different living expense — groceries, gasoline, Starbucks coffee in the morning on the way to work. You'll have better luck remembering everything that you spend money on if you think according to categories. "Automobile" would include gas, repairs, insurance, and taxes — while "grooming" might be divided into clothes, makeup, haircuts, and facials.

TRACK YOUR EXPENSES

How can you know what steps you need to take to reach your goal until you know exactly where you are right now? Most of us don't have a clue where our money goes — credit cards and ATM's make it easy for money to just slip through our fingers. The first step is to create a list of STATIC EXPENSES — things that cost the same amount every month, like rent and your car lease and student loan payments. Now these expenses are not completely "static" in the strictest sense of the word. You can reduce your rent or mortgage payment by finding a less expensive house — and you could increase your loan payments to get rid of the debt faster. But for now, just itemize your regular monthly costs.

Next, you want to evaluate your VARIABLE EXPENSES — those costs that fluctuate from month to month. Groceries, entertainment, utilities, and clothing all fall into this category. The great thing about variable expenses is that you control (at least to a certain extent) how much of your budget these items eat up. But some of these costs come in large and unexpected chunks — like car repairs and medical bills. So you might need to go through your last 12 months' credit card and bank statements to get a clear idea of how much daily life costs you. And don't forget about those expenses that are paid only intermittently — like insurance. Tally each expense and divide the total by 12, to give you a clearer idea of how your costs spread out over a year's time.

ROOT OUT MONEY LEAKS

Now I guarantee that you will not remember every expense, no matter how hard you strain your brain! Think about all of the things that you buy throughout your week without really paying attention — snacks at work, a magazine when you stop for gas, that cup of coffee on your way in every morning. And don't forget about the expenses you are racking up because of financial disorganization — interest charges on your credit card debt, late fees because you forgot to return that movie on time, overdraft charges because you didn't balance your checkbook. All of these fall into the category of unconscious spending. You just do it because it's a habit. And although you think that a dollar here or fifty cents there is insignificant, it can really add up.

So for a month, record every penny that leaves your hand, in the form of a check or cash or a credit card transaction. This may sound like a huge challenge, but you can do it! Make it convenient — my husband stuck a small pencil and piece of paper in his wallet so he would be reminded to make a note every time he made a purchase. You will be stunned when you see where your money is really going! My husband was shocked to find out that he was spending almost a hundred dollars a month on that morning coffee (am I picking on Starbucks too much?!) What's your vice — eating out when you are feeling lazy? Buying every new CD or magazine that comes out? I'm not suggesting that you completely eliminate these habits — just that you decide how often you can reasonably afford to indulge and still reach your other financial goals.

DON'T FORGET YOUR DEBTS

It's also important that you have some idea of your liabilities — debts that still have to be repaid. Did you figure these payments in with your monthly expenses? If you are only counting the minimum monthly payment, you will never pay your debts off. You may not be able to do it right now — but after we get your budget in order, the goal is to pay at least double the minimum amount on at least one of your liabilities each month. You should start with the credit card or loan that has the highest interest rate — then tackle the next highest after the first debt is paid off. And if you can afford to pay more than double, go for it. You aren't really free to start working on other financial goals until you know you are debt free.

TALLY UP YOUR INCOME

Do you really know how much you make? The tendency is to quote whatever is printed on your employment contract — to say, "I make _____ a year." But after taxes and Social Security and any other items that are deducted from your check, what are you actually bringing home? Take a minute to really examine all of your sources of income and calculate an honest total — you can't have a realistic budget without it!

WHAT'S THE VERDICT?

So, comparing income to expenses, how does it look? If you came out in the black, congratulations! How much do you have left over? Regardless of how small or large the amount is, start stashing it away into savings and investments! Your choice of how to proceed will depend on your financial goals — investing for retirement will involve less liquidity and more risk than just saving for next year's vacation. The main thing to remember is that you should build your savings and investments into your budget just like a bill — and take care of these long-term responsibilities FIRST, before other costs. That's the secret to good financial management.

Now, if you ended up in the red, we need to talk. The first step is to look at spending which can be reduced or even eliminated. Start by examining those "spending leaks" — if they give you pleasure and satisfaction, dandy. Certainly late fees and interest charges don't fall into this category! But you can still overdo a good thing.

Ask yourself if eating out 4 times a week gives you 4 times more pleasure than doing it just once. And could you get as much pleasure if you cooked a good homemade meal? Is the ridiculous mortgage on that 10,000 square foot house worth it? Or could you be just as happy (or even happier with less financial stress) in a place half the size? Also look for convenience expenses — things that we spend money on because we are overwhelmed, too busy, or just worn out.

Perhaps by re-evaluating how you use your time, you might discover that many of these expenses are just symptoms of misplaced priorities. When you arrive at a place where all of your spending decisions are DELIBERATE ones, you will find yourself several steps and quite a few dollars closer to a balanced budget that allows you to reach all of your financial goals.

Ramona Creel is a Professional Organizer and the founder of OnlineOrganizing.com — a web-based one-stop shop offering everything that you need to get organized at home or at work. At OnlineOrganizing.com, you may get a referral to an organizer near you, shop for the latest organizing products, get tons of free tips, and even learn how to become a professional organizer or build your existing organizing business. And if you would like to read more articles about organizing your life or building your business, get a free subscription to the "Get Organized" and "Organized For A Living" newsletters. Please visit http://www.OnlineOrganizing.com or contact Ramona directly at ramona@onlineorganizing.com for more information.

1. What is your total net income?

2. What are your debts and minimum monthly payments? (Don't include any extra money you are paying towards any debt. You want only your minimum required monthly payments.)

Okay, are you ready to begin?

The first thing you need to do is take a percentage of your NET income (a good beginning point would be 5%) and write this amount down at the top of a blank sheet of paper.

Next, write down each of your debts (not including utility bills, insurance payments, property taxes, etc.) in a column at the left side of your page. Beside each debt, write down your total balance and then your minimum monthly payment.

Once you have all of these down, divide your total balance by the minimum monthly payment. Write this amount next to each debt. Taking the debt that has the shortest payoff number, number this number 1. Taking the next shortest payoff, number it number 2 and so on until each debt has a number next to it. These numbers indicate the order in which you will begin to pay off your bills.

Now, here is where your 5% comes into play. For debt number 1 take the minimum monthly payment and add it to the 5% figure. Divide the total balance by this new amount to get the total months it will take to payoff the debt. For debt number 2, you will take the minimum monthly payment plus the 5% plus the minimum monthly payment of debt number 1 (since it will be paid in full) and add them together. Again take the total balance and divide it by your new monthly payment to figure your total months to payoff. Do this with each debt until you are finished.

Once you have completed this, add up the total months to pay off your debts to figure an estimate of how long it will take you to pay off all of your debt.

Example:

Visa total balance $6300.00 divided by minimum monthly payment of $153.00 = 41 (months to payoff) 2 (second to payoff)

Auto Loan $13000.00 divided by minimum monthly payment of $356.00 = 36 (months to payoff) 1 (first to payoff)

Mastercard $5266.00 divided by $96.00 = 54 3 (third to payoff)

Mortgage $43,000.00 divided by $325.00 = 132 4 (fourth to payoff)

The auto loan is the first to payoff because it has the shortest amount of time before it is paid in full. Then your Visa balance and so on.

Net Income = $1500.00 x 5% = $75.00

Taking your first debt to payoff which is the auto loan:

minimum payment $356.00 + $75.00 = $431.00 total balance $13000 divided by $431 = 30 (months it will take you to payoff this balance using additional 5%)

Visa: $153.00 + $75.00 + 356.00 (since this loan amount is paid in full) = $584.00 total balance of $6300.00 divided by $584.00 = 11 (months it will take to payoff credit card)

Mastercard: $96.00 + $75.00 + 153.00 + $356.00 = $680.00 total balance $5266.00 divided by $680.00 = 8

Mortgage: $325.00 + $75.00 + 96.00 + 153.00 + 356.00 = $1005.00 total balance $43,000.00 divided by $1005.00 = 43

Add your months together: 30 + 11 + 8 + 43 = 92 approximate months to have all of your debt (including you home) PAID IN FULL! This is about eight years! Can you imagine being debt free in eight years???? That means that your home would be free and clear and you would have 100% equity!

If you apply the above formula to your financial situation, you can be debt free without getting a second job or without working extra overtime! Imagine the time you can spend with your family and friends instead of working. Of course if you take a higher percentage of your net income, you will pay off your debt faster!

This is something that anyone can do based on simple math. The trick to remember is to NOT use your credit cards. In fact, cut all but one up! Get rid of them and just keep one in case of a major emergency. Start yourself a savings account to begin building up your emergency funds. Eventually set goals for yourself to save for college funds, retirement funds, etc.

Remember this fundamental rule:

PAY FOR CURRENT EXPENSES WITH CURRENT INCOME

Carolyn Shipp

http://macarolyn.tripod.com/sbtips

There is not one decisive answer. In most cases, there is strong reliance on the figures in the balance sheet.

If the negotiations with the creditors of the company (as to how to settle the dispute arising from the company's default) fails, the company itself can file (=ask the court) for bankruptcy in a "voluntary bankruptcy filing".

Enter the court. It is only one player (albeit, the most important one) in this unfolding, complex drama. The court does not participate directly in the script. To say its lines – court officials are appointed. They work hand in hand with the representatives of the creditors (mostly lawyers) and with the management and the owners of the defunct company.

They face a tough decision: should they liquidate the company? In other words, should they terminate its business life by (among other things) selling its assets?

The proceeds of the sale of the assets is divided (as "bankruptcy dividend") among the creditors. It makes sense to choose this route only if the (money) value generated by liquidation exceeds the (money) the company as a going concern, as a living, functioning, entity.

The company can, thus, go into "straight bankruptcy". The secured creditors will receive the value of the property which was used to secure their debt (the "collateral", or the "mortgage, lien"). Sometimes, they will receive the property itself – if it not easy to liquidate (=sell) it.

Once the assets of the company are sold, the first to be fully paid off will be the secured creditors. Only then will the priority creditors be paid (wholly or partially).

The priority creditors include administrative debts, unpaid wages (up to a given limit per worker), uninsured pension claims, taxes, rents, etc.

And only if there is any money left after all these payments, it will be proportionally doled out to the unsecured creditors.

The USA had many versions of its bankruptcy laws. There was the 1938 Bankruptcy Act, which was followed by amended versions in 1978, 1984 and, lately, in 1994.

Each state has modified the Federal Law to fit its special, local conditions.

Still, a few things – the spirit of the Law and its philosophy are common to all the versions. Arguably, the most famous procedure is named after the chapter in the law in which it is described, Chapter 11. Following is a small discussion of chapter 11 intended to demonstrate this spirit and this philosophy.

This chapter allows for a mechanism called "reorganization". It must be approved by two thirds of all classes of creditors and then, again, it could be voluntary (initiated by the company) or involuntary (initiated by one to three of its creditors).

The American legislator set the following goals, in writing the bankruptcy laws:

* To provide a fair and equitable treatment to the holders of various classes of securities of the firm (shares of different kinds and bonds of different types)

* To eliminate burdensome debt obligations, which obstruct the proper functioning of the firm and hinder its chances to recover and ever repay its debts to its creditors.

* To make sure that new claims received by the creditors (instead of the old, discredited, ones) equal, at least, to what they would have received in liquidation.

Examples of such new claims: owners of debentures of the firm can receive, instead, new, long term bonds (known as reorganization bonds, whose interest is payable only from profits).

Owners of subordinated debentures will, probably, become stockholders and stockholders in the insolvent firm will receive no new claims.

The chapter dealing with reorganization (the famous "Chapter 11") allows for "Arrangements" to be made between debtor and creditors: an extension or reduction of the debts.

If the company is traded in a stock exchange, the Securities and Exchange Commission (SEC) of the USA advises the court as to the best procedure to adopt in case of reorganization.

What chapter 11 teaches us is that:

The American Law leans in favour of maintaining the company as a going concern. A whole is larger than the sum of its parts – and a living business is worth more than the sum of its assets, sold separately.

A more in-depth study of the bankruptcy laws shows that they allow for three ways to tackle a state of malignant insolvency which threatens the well being and the continued functioning of the firm:

Chapter 7 (1978 Act) – liquidation

A District court appoints an "interim trustee" with broad powers. Such a trustee can also be appointed at the request of the creditors and by them.

The Interim Trustee is empowered to do the following:

* liquidate property and make distribution of liquidating dividends to creditors

* make management changes

* arrange unsecured financing for the firm

* operate the debtor business to prevent further losses

By filing a bond, the debtor (really, the owners of the debtor) is able to regain possession of the business from the trustee.

Chapter 11 – reorganization

Unless the court rules otherwise, the debtor remains in possession and in control of the business and the debtor and the creditors allowed to work together flexibly. They are encouraged to reach a settlement by compromise and agreement rather than by court adjudication.

Maybe the biggest legal revolution embedded in chapter 11 is the relaxation of the ages old ABSOLUTE PRIORITY rule, that says that the claims of creditors have categorical precedence over ownership claims. From now on, the interests of the creditors have to be balanced with the interests of the owners and even with the larger good of the community and society at large.

And so, chapter 11 allows the debtor and creditors to be in direct touch, to negotiate payment schedules, the restructuring of old debts, even the granting of new loans by the same disaffected creditors to the same irresponsible debtor.

Chapter 10

Is sort of a legal hybrid, the offspring of chapters 7 and 11:

It allows for reorganization under court appointed independent manager (trustee) who is responsible mainly for the filing of reorganization plans with the court – and for verifying strict adherence to them by both debtor and creditors.

Despite its clarity and business orientation, many countries found it difficult to adopt to the pragmatic, no sentiments approach which led to the virtual elimination of the absolute priority rule.

In England, for instance, the court appoints an official "receiver" to manage the business and to realize the debtor's assets on behalf of the creditors (and also of the owners). His main task is to maximize the proceeds of the liquidation and he continues to function until a court settlement is decreed (or a creditor settlement is reached, prior to adjudication). When this happens, the receivership ends and the receiver loses his status.

The receiver takes possession (but not title) of the assets and the affairs of a business in receivership. He collects rents and other income on behalf of the firm.

So, British Law is much more in favour of the creditors. It recognizes the supremacy of their claims over the property claims of the owners. Honouring obligations – in the eyes of the British legislator and their courts – is the cornerstone of efficient, thriving markets. The courts are entrusted with the protection of this moral pillar of the economy.

Economies in transition were in transition not only economically – but also legally. Thus, each one adopted its own version of the bankruptcy laws.

In Hungary – Bankruptcy is automatically triggered. It is not allowed to swap debt for equity. Moreover, the law provides for a very short time to reach agreement with creditors about reorganization of the debtor. These features led to 4000 bankruptcies in the wake of the new law – a number which mushroomed to 30,000 by 5/97.

In the Czech Republic- the insolvency law comprises special cases (over indebtedness, for instance ?). It delineates two rescue programs:

* A Debt to Equity Swap (an alternative to bankruptcy) supervised by the Ministry of Privatization.

* The Consolidation Bank (founded by the State) can buy a firm's obligations if it went bankrupt at 60% of par.

But the law itself is toothless and lackadaisically applied by the incestuous web of institutions in the country. Between 3/93 – 9/93 there were 1000 filings for insolvency, which resulted in only 30 commenced bankruptcy procedures. There hasn't been a single major bankruptcy in the Czech Republic since then – and not for lack of candidates.

Poland is a special case, always pitting horses against tanks, always losing the war, as a result. The pre-war (1934) law declares bankruptcy when confronted with a state of lasting illiquidity and excessive indebtedness. Each creditor can apply to declare a company bankrupt. An insolvent company is obliged to file a maximum of 2 weeks following cessation of debt payment. There is, indeed, a separate liquidation law which Allows for voluntary procedures.

Bad debts are transferred to base portfolios and have one of three fates:

* Reorganization, debt-consolidation (a reduction of the debts, new terms, debt for equity swaps) and a program of rehabilitation.

* Sale of the corporate liabilities in auctions

* Classic bankruptcy (happens in 23% of the cases of insolvency).

No one is certain what is the best model. The reason is that someone has yet to come with answers to the questions: are the rights of the creditors superior to the rights of the owners? Is it better to rehabilitate than to liquidate?

Until such time as these questions are answered and as long as the microeconomic debt crisis deepens -we will witness a flowering of versions of bankruptcy laws all over the world.

About The Author

Sam Vaknin is the author of "Malignant Self Love – Narcissism Revisited" and "After the Rain – How the West Lost the East". He is a columnist in "Central Europe Review", United Press International (UPI) and ebookweb.org and the editor of mental health and Central East Europe categories in The Open Directory, Suite101 and searcheurope.com. Until recently, he served as the Economic Advisor to the Government of Macedonia.

His web site: http://samvak.tripod.com

Once these countries have clean water, and can grow crops to feed themselves and have inflow of investment capital, they can live a less impoverished life. Thus we bring them into the world as customers. They can then buy computers for schools, equipment to make roads and materials to build and thus we can create emerging markets by helping people rather than exploiting them. And everyone wins. We have more to gain long term if we are diligent in building than temporarily greedy short term for instant gain. Those who bet against markets and currencies are doing so at the detriment of everyone including their own longevity as a being. If we have more buyers of biotech products and genetically superior foods to feed the world and extend life of the individual thus getting more out of each persons personal experiences and education. If you live longer, you can do more and do it more efficiently as long as your health holds out.

If we work together we can set the Planet Plan up in such a way that will take into consideration the problems and manipulations of the past and turn them into gains for all. If someone speculates downside on a currency, which may make them rich, they will now be helping people of the world join the team and come out of impoverished situations. They can then begin to build and take care of their many other problems such as AIDS, malnutrition, tribal wars, crop failures, contaminated water, drug addictions, birth defects, excessive birth rates without controls, educational problems and mental illnesses caused by the entire list. We will also rid the world of these nut so religions and extremists. An educated populous will never buy that type of rhetoric or settle to live in such a hostile and negative environment. If no application is filed with the WTO, then there will be no gifts to these causes. Private foundations, United Nations Groups, Doctors Without Boarders, Red Crescent, Red Cross and others would still help the rest of the world and those countries not wishing to participate do not have to.

We will leave them alone, until which time they ask for help. A country, state cannot grow and sustain itself without the following things: Education, distribution, communication, basic infrastructure and a stabilized instrument of trade (and it could be anything; a flower, a cow, a bead, a rare metal, a raccoon skin). We are simply proposing the unit of currency to be the dollar or the future United-Euro (a future dollar-euro united), the WTO and simple rules to foster uninhibited growth without speculators causing inflation or devaluation of currencies for personal gains in currency trading. If they do, then their gains or losses will be the world's gains and therefore the commonality of greed in man's innate characteristics will continue to serve this human race well. In this case it gives to future growth and stability of a one world without catastrophic problems that effect real people in emerging states. A Monetary Planet Plan for emerging nations. Think about it.

"Lance Winslow" – If you have innovative thoughts and unique perspectives, come think with Lance; www.WorldThinkTank.net/wttbbs

In fact, it's the only budgeting plan that makes perfect sense. Budgeting to include debt management in your personal finance plan builds a good strong defense against credit card use.

Unexpected events and expenses play a significant role in creating debt for most of us. A good budgeting plan that prepares you for those events and provides a strong foundation to fall back on is essential for successful debt management.

This is where most self-created budgets fail. Even the best intentions are doomed if you are you guilty of this common oversight? Without a complete plan, we fall right back into the old credit card trap. Feeling helpless and cornered into using credit to just make ends meet.

Free yourself from the burden of credit card debt. You will never be financially independent as long as you have to depend on the credit card companies to survive.

Quit investing in the credit card companies and start investing in yourself!

Yes, I know the feelings all too well. Barely making ends meet, budgeting chaos, struggling to maintain "everything's O.K." while finances continue to get worse and worse. Stop the feelings of inadequacy and failure!

In today's fast moving society it's not unusual for the average family to be living way beyond their means. With that in mind, quit blaming yourself. This is the world we live in. Many of us have gotten trapped by society's expectations.

I made the decision to stop the madness and help myself! You can too! A budgeting plan that includes managing debt will help you succeed at money management.

Create a plan based on your individual needs…set your own goals…and begin your journey to lifelong financial security and independence! After all, we all have different needs and obligations, so everyone's plan has to be designed to suit their unique situation.

The key to financial success is to live within your means!

The key to independent wealth is living below your means! But wait…we're getting way ahead now. After living way beyond your means for so long, it's hard enough to scale down to reality. Once you have that mastered, and see how much money you didn't even know you had, you'll be eager to scale down even more!

Debt management is crucial for any budgeting plan to succeed. And, likewise, a good household budgeting plan is essential for any debt management program to succeed.

One cannot be successful without the other. Like "peanut butter and jelly" most of us can't have one without the other. They just go together!

Cheryl Johnson is a mother of four helping herself and others become and remain debt free. Publisher of http://www.simpledebtfreeliving.com Simple Debt Free Living – A self-help plan, ideas, and resources for debt reduction, personal budgeting, frugal living, and extra income opportunities.

The debt settlement process usually takes between 12 to 36 months, so consumers can wait for creditors makes the sensible decision to agree and negotiate. Besides the obvious benefit of debt settlement, another benefit is the help with creditor harassment. Debt settlement companies normally contact all your creditors and inform them that you are working with a debt settlement company and that you are now being represented. This is very important in that it helps minimize or eliminate creditor calls. The standard practice is to direct all communication to the debt settlement company that you are working with. However, it is important to remain cognizant of the fact that original creditors can still contact you legally, but most will comply with such requests.

The most important part of debt settlement is to complete settlement process with your creditors and or collection agencies. In order to do this, it is necessary for a debt settlement company to have you sign a contract and a document that legally authorizes them to negotiate with your creditors on your behalf; this is known as a "Limited Power of Attorney." During the settlement process, you will make a monthly deposit into a "settlement account" that will eventually be used for your debt repayment. As funds begin to accumulate in the account, the debt settlement company will start to negotiate with your creditors. Once a debt settlement offer has been agreed upon, you will need to send that amount, directly from your account, to the creditor. Once the payment has been made, that debt is considered settled in full. You will no longer owe anything on that debt and the account will be closed.

Alan Barnes
IAPDA Certified Debt Arbitrator
President and CEO of Debt Regret

http://www.debtregret.com

In the past decade Personal bankruptcies have doubled

Americans owed $1.9773 trillion in October 2003. This amount has increased 41% from what consumers owed in 1998.

The average American household has $18,654 in debt not including mortgage debt.

In excess of 1 million homeowners currently have 3 or 4 mortgages on their homes. 1.8 million Homeowners have loans equal to 100% or more the value of their homes.

Personal bankruptcy filings in 2003, rose 7.8% from the same period in 2002

Average U.S. household with a mortgage, two college graduates who borrowed money for school and more than one credit card, owes about $112,000.

Do these scary statistics describe your situation? Do you feel trapped by your debt? There is hope! The key to escaping the trap of ever growing debt is simple: you need to spend less than you make. At LoseDebt.org we outline a free and simple debt elimination plan to help you get on track and start eliminating your Debt. Let us help you avoid bankruptcy and start the process of creating wealth.

Source:

1. http://moneycentral.msn.com/content/SavingandDebt/P70741.asp

Ryan C.
LoseDebt.org

Many times, people experience negative consequences so they develop new strategies. After a while, they discover that the new strategies produced the same results as the old strategies. So, they lapse into an endless cycle of strategizing to overcome failed efforts.

In personal finance, people find themselves in debt, so they borrow money to get out of debt. Note: the strategy that caused the problem won't often be the solution to that problem!

The real solution to the problem requires a careful evaluation of the assumptions upon which the failed strategies are based. This is tough because it requires people to change their minds and their actions. Yet, real solutions can't be developed apart from this process.

In personal finance, an individual must determine that personal debt is not the solution to the problems encountered at the end of the month. Granted most people carry huge loads of debt; but most people are broke! It's not working for them, why will it work for you?

The consequences you face are a result of the strategies you develop. The strategies are rooted in your assumptions about the way things really are. If you want to solve problems and stop pretending to be a victim of your circumstances, you'll embrace a new way of thinking. Otherwise, you're doomed to repeat encounters with the same negative consequences.

Get control of your thinking or someone will be glad to think for you!

Dr. Terry Hadaway is author of 30 Seconds to Chaos: Mastering the Art of "What If" Thinking and numerous articles. Visit http://www.30secondstochaos.com for more information on Dr. Hadaway and his straightforward approach to winning at life!

Creditors recognize that people who enter a debt consolidation program are trying to repay their obligations in good faith. Creditors are more willing to extend favorable terms to such clients in the hope that they (the creditor) will avoid the significant expense of turning the account over to a collections firm or avoid an extended drawn out process if the account holder goes through the expense of declaring bankruptcy.

Experienced Christian Debt consolidation and credit counseling services know this, and they have experience working with creditors to ease the burden of repayment. They can help you renegotiate loans, reshape payment schedules, reduce your interest rate or obtain a loan that consolidates your debt. Many of these firms are nonprofit; they are in the business strictly so that they can help fellow Christians to get back on their feet and free from the burden of unusually heavy debt.

If this sounds like something that suits your personal needs, you should consider contacting a Christian debt consolidation or credit counseling agency.

cCopyright 2005 by Retro Marketing.

Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including http://www.End-Your-Debt.com/ and http://www.HomeEquityHelp.net/

The second step is to align your priorities and decide where your debt repayment plan should begin and be the most concentrated. Pay off high interest loans before low interest loans to save you money.

Third, approach your creditors and ask about their available debt repayment plans. Tell them what you are interested in, and present them with your program for repayment. They may not accept this initial proposal, but it is a good way to begin the process.

Last, be committed to following through on the terms of your debt negotiation settlement. When you agree to the terms, and your creditors agree to the terms, you must both be willing to do your part to ensure your success in fighting debt is attained. Knowing how to negotiate a debt settlement isn't difficult, but it is essential to fixing debt problems and securing your future financial success.

Copyright c 2005 Credit Repair Facts.com All Rights Reserved.

This article is supplied by http://www.credit-repair-facts.com where you will find credit information, debt elimination programs and informative facts that give you the knowledge to correct your own credit and credit report. For more credit related articles like these go to: http://www.credit-repair-facts.com/articles_1.html

Since the bank needs to train their employees, provide a paycheck and benefits, pay for the branch building and in some cases supply uniforms, etc., it is conceivable that your one banking transaction per pay period could cost the bank $3 or more.

If you conduct your banking via an automated telephone system, the cost of this type of transaction is much less expensive. However, if you then require assistance from a telephone banker, the price goes from $1 for the automated process to as much as $2 for human contact. For the same reasons stated above, the training, location, computer equipment, etc. becomes more expensive when human interaction is needed.

Now it is clear why electronic banking methods are preferred by financial institutions. In fact, most banks are rewarding their customers with lower fees the more the customer does his/her banking electronically.

For example, even though Automatic Teller Machines (ATMs) cost the bank around $100,000 each plus the cost of the computer network and maintenance, the cost of these types of transactions drops to between $.50 to $1 each. Not only are these machines more cost effective, the 24-hour availability to customers is very convenient. With the ease and convenience of automatic clearing house (ACH) payments, this "checkless" process drops the price to around $0.25 each.

And finally, the Internet drops the expense even further to less than $0.10 a transaction. I realize that there is still some fear of banking electronically, but the security that banks have instilled with computer technology far surpasses the current security of traditional banking methods. If you lose your checkbook and wallet, the cost and worry of canceling these checks is very tedious. It's very possible that a thief could forge your name and deplete your accounts in a matter of hours.

The sophisticated computer technology, however, although not perfect, has a far more secure system to protect you and your money. Avoid being the bank's best customer. Attempt to cut your annual bank fees in half by educating yourself. Inquire about the options and products available to you with your banker. By asking about the alternative banking methods, you may find that your bank fees will drop considerably.

ABOUT ONE PAYCHECK AT A TIME, INC.

One Paycheck at a Time Inc. is the leading source for sensible debt reduction solutions. Its products include the One Paycheck at a Time paperback (ISBN: 1591133327), as well as an ebook format, and the eTools program. The author of the book and president of the company, Kimberly A. Griffiths, has been through the vicious cycle of debt herself and has made it her personal goal to share her experience to help others. More information can be found about the company and its products at http://www.OnePaycheckataTime.com

It is so very easy to spend more than we have, indeed it has become a way of life to many. Each month Peter is robbed to pay Paul. Our salary cheques are spoken for as soon as they hit our banks. People find themselves unable to clear their credit cards each month and then are forever playing catch up with high interest payments.

What can be done? The first thing is to face the situation. A full financial inventory is required listing everything you own of value, savings, bank accounts and other assets and matching that against everything you owe. Make sure you know what your monthly income is against your monthly outgoings. It is essential that you have the full picture before planning your next move.

The severity of your financial situation will dictate your next move. If your assets exceed your liabilities it may be as simple as arranging a loan from a responsible lender, such as your regular bank, and using this to settle the high interest credit card debt leaving you with one manageable monthly payment. We'll talk about the way forward after you have taken this step in just a moment.

If it is not possible for you to obtain a consolidation loan you will need to manage your existing debts responsibly. The first thing to do here is check the interest rates being charged and shop around for better deals. It will be possible to transfer balances across to new lenders – provided your credit record has not been blemished by irregular and late payments or defaults.

At all costs it is important to take advice from a qualified person before entering into any arrangements with "alternative" lenders.

And, of course, there is the worse case scenario that when you do your financial audit you find that you have insufficient assets and insufficient income to meet your debts. The important thing to remember is that your problem will not go away. Ignoring bills and reminders will only make your situation worse. If your position is such that you are going to struggle to make the minimum payment, let your lender know. Contact them before they contact you and, on the whole, you will find them to be understanding and helpful. Put together a repayment plan that you can meet and send this to your creditors for agreement.

When you have done all you can to improve the immediate situation you must begin to repay the debt. The debt bearing the highest interest rate is to be repaid first, (this is your number one priority debt) with minimum payments only being made on other outstanding accounts. To protect your credit rating it is essential that at least minimum payments are made, on time, each month.

Once your number one priority debt is cleared you focus on making the same additional monthly repayments to the next most expensive account and continue with this until all debt is cleared.

Smart individuals will retain at least one credit card and use this each month, leaving their salaries on a high interest earning deposit account, only withdrawing funds when the card balance is due to be cleared. They live on borrowed funds for up to six weeks at a time whilst earning interest on their own funds. Clever.

However, you may find it easier at first to put all credit cards away until such time as you have mastered a new way of being around money.

Getting yourself clear of debt could take months or years depending on the level of indebtedness and the amount of disposable income you have to make repayments each month. Once you are debt-free the secret is not to find yourself in this situation again.

It is important to understand how the debt amassed. Do you not earn enough to sustain your current lifestyle? Are you spending more money than you need on mortgages, rent, utilities, groceries? Do you take the time to look at prices and shop around? What can you cut out of your life which has a cost and which is not essential? When you go on a spending spree, what need is this meeting? How else can you get this need met? It may be that your cost of living is high because of your working hours e.g. when working long hours it is easier to pick up a take away than to prepare a meal. It may be that you will want to consider seeking qualified help if over-spending is a behavioural problem or addiction.

Just making the effort to get out of debt is rarely enough. Real work is required to change your relationship with money to prevent the same situation recurring in the future. Building a new relationship with money and "things" is part of a personal growth and development path which we are each ready to follow at different stages in our lives. Some learn to handle money very young – others never do.

Donnie Harrison is a personal coach and professional mentor who works with individuals building professional practices, especially in the healthcare sector. Further information from http://donnieharrison.com

Personal debt reduction practices begin with a reevaluation of the money you spend and the money you make, and require a commitment to stop the debt cycle.

Throw away all credit offers as they come in and choose wisely before taking out any further loans. Get to know your habits and your current financial situation and stop all compulsive spending. This requires making lists of your bills; lists of your debts and then comparing these monetary amounts to the income you generate every week and month.

Self-reflection will tell you if you have your priorities in the right place, and you can then begin to prune your spending to better reflect what is important to you as well as to save money to spend on debt. Analyzing which debt and interest accrues fastest will help you to choose which debts to pay off the fastest.

Write down your plan of action and then hold yourself to the promises you have made to yourself. Financial freedom is within your grasp with just a little time and effort on your part. Each good decision builds on the one before to create a snowball effect of success in the debt repayment game. Personal debt reduction practices make sense for the long run and offer you a way to achieve financial freedom.

This article is supplied by http://www.credit-repair-facts.com where you will find credit information, debt elimination programs and informative facts that give you the knowledge to correct your own credit and credit report. For more credit related articles like these go to: http://www.credit-repair-facts.com/articles_1.html

Never forget that bankruptcy is your right as an American citizen, and it may be something worth pursuing.

Chapter 7 and Chapter 13

Chapter 7 bankruptcies allow debtors to eliminate most of their unsecured debt while at the same time protecting their assets. Unsecured debt includes charge card obligations, car payments, signature loans and other similar items for which there is no "security".

A Chapter 13 is an arrangement in which the individual is required to repay debts over time. Under these laws, the majority of bankruptcy filings by individuals are Chapter 7 proceedings.

Try Everything before You File

Evaluate your financial situation. Find out where the debt is coming from and compare it to your present financial income. Put it all down on paper and then make an objective decision based on the results.

If you are having difficulty with charge cards, contact the charge card company to try to work out a solution. Every charge card company has a department dedicated to helping clients with their bills without ever having to file for bankruptcy.

Another option which may well help you is consolidating your debt through a debt consolidation loan and thereby reducing the total payments to a smaller monthly figure. Check the Internet for Credit Counseling Companies. These companies work to combine your debt and reduce the interest on your accounts. A small service fee is added for counseling fees and costs.

Filing for Bankruptcy

The first step to actual bankruptcy is to contact a competent bankruptcy lawyer to file the papers for you. There is really no other choice, unless you know the "language of law" and can file them yourself. Even then, it would be safer to have a lawyer managing the actual filing for you. Bankruptcy appears to be a simple task of liquidation, but if you do not know the rules, laws, terms and deadlines, you will create more unwanted chaos in your life and possibly end up spending more to get yourself out of a situation you could have avoided! In a worst case, your case could be declined after all your work.

If you decide to declare bankruptcy, look at this as a new financial beginning; with new spending habits, and new ways of paying your bills in a timely manner.

Don't stay stuck in your past habits. Create some new habits for a new and improved credit report! Patience is the key word. Your credit didn't go bad in a month, so you're not going to restore your credit in a month either.

If you do not change your bad spending habits, you will find that even after experiencing the trauma of bankruptcy, you end up once again in stressful financial situations. Since you can only file bankruptcy every 10 years, this time there will be no solution! Learning skills to avoid the same financial problems is very important. Budgeting your money is a good place to start.

Budget your Money to Avoid Repeating Financial Mistakes

Let's make restoring credit your new start! The single most important suggestion for restoring your credit history, and your quality of life, is to create a working budget for your household.

Stop that groaning! Budgets are simply a plan that shows the flow of incoming and out going finances in your household. They are realistic and balanced, and they are also flexible in case of unexpected expenditures that will never fail to show up.

Look at a budget as if it were an inventory of your finances. Most people think that they have to have a lot of money to make a budget – but a good budget is going to help you to get that money, and know where it is going! Whatever amount you have coming in can best be spent following a sound budget.

How to Create a Budget

1. Figure out in dollars, the money you expect to have coming in for the next 2 months. The easiest way to do this is to note everything that comes into the household from all sources.

2. Next figure out how you spend that money normally. Do you "scatter" your paycheck away, buying lots of smaller items – could be fast food spending, extras at the check out line, etc. Do you like the electronic or big-ticket items buying, forgetting all about the bills? If your budget is going to be realistic then you'll need to be honest and accurate when recording. You are by now becoming painfully aware of your spending habits concerning your money!

3. Now use the information that you gathered to form two columns. Title one, 'Income' and the other, 'Expenses'. The budget you are making will be for ONE month since that is the cycle for most bills such as housing, telephone, car payments and so forth.

4. List separately, in the appropriate column, the name of the expense.

5. Enter the dollar amount next to the appropriate item on the list for that specific expenditure.

Don't forget to add any goals you may have, such as saving 10%. This would be placed in the 'Expenses' column with an approximate dollar amount – let's say $40.00 a month.

Now comes the hard part! Chances are you found that you are trying to spend more than you have coming in! This is "upside down living"! This cannot happen! You cannot spend more than you make!!

Now you must sit down, with other household members, if applicable, and evaluate what you can live without, and how you can change some habits. Maybe cooking at home more than eating out would save your family money every week. Maybe cutting out the impulse buying, or the video games, or turning down the air conditioning – whatever it takes to make the Income column not exceed the Expenses column so you can begin new spending habits after your bankruptcy.

Restoring your credit is the long-term goal. This will take some control and restraint when something you think you REALLY want is right there – but hang on! Getting accustomed to a budget usually takes 3-4 months. Keep your eyes on your goal!

New Laws:

Legislation is being considered that may make it more difficult to obtain a Chapter 7 bankruptcy. If this occurs, someone filing for Chapter 7 bankruptcy will have to show proof that their income is under their State's median, or average, in order to be eligible. If their income is over, they would be required to file Chapter 13. Chapter 13 makes provisions for all debt to be repaid at agreed upon installments, instead of declaring a complete bankruptcy, or elimination of debts. If you must consider bankruptcy, be certain that you are aware of the ever-changing legislation controlling your specific situation.

Under the new proposed law, credit counseling will be required for anyone filing.

The author: Bradley Sproson. You can also view more consumer debt related articles on Filing Bankruptcy by visiting http://www.4-debt-elimination.com.

Debt elimination avalanches are a good way to get rid of any existing debts that you might already have. Once you have a budget, you should have a certain amount of money each month going toward one debt or another. If you end up with any extra money one month, you should make sure that you either put it away and save it, or that you put it toward your existing debts.

The avalanche comes in once you are finally successful at paying off one or more of your debts. Instead of using the extra income you get each month on other purchases, you should apply that money to one of your existing debts. The result is that you'll be paying off your remaining debts even faster than you were before. The more debts you pay off, the faster your remaining debts are paid – and the sooner you will get out of debt.

Another thing that you should think about when you're looking toward getting out of debt is debt consolidation. This may be more effective than a debt elimination avalanche, but you should be careful. While you are the only person in charge of how much you pay while you're working on the debt avalanche, debt consolidation requires putting somebody else in charge of your debt, which may not be the best idea if you get involved with the wrong company.

However, if you have several student loans, then you might find it easiest to consolidate your different student loans in order to lower your interest payments.

You can even start budgeting and paying off your debt while you're a student. Just remember, the sooner you start paying your debts, the sooner you'll be completely financially free. It might be harder at first, but it is possible to eliminate debt for students.

Erwin Tjong is an Internet Marketer and a member of Elite Team which a Marketing System that specifically to provide SUPPORT and TRAINING for everyone who joined the Financial Freedom Society Inc.) To learn more about his business please visit : http://www.EliteTeamOz.com

Luxury item #2: Make some time to make a wish list!

While putting the wheels in motion on reducing debt, there's a happier issue to think through as well: What is it you really want out of life? Peace of mind (and of household) starts with asking these Really Big Questions!

More importantly (assuming you actually care about your relationship), what is it your partner craves? If you don't know, well… it can be fun finding out. Too many financial planning exercises are painful, which is why not enough people do them. This exercise, finding out what really matters to you both, isn't.

What are the things in life that really feel like luxury to you? Now is the time to identify them, and separate out the smaller, less satisfying things you're paying for that keep you from getting what you really want.

To keep to the spirit of fun, I've found it's useful to agree to some simple ground rules:

* Make some unbroken wish list time for the two of you

* There are no such things as 'silly ideas' or 'waste of money' items during the wish list time (that will come later on during a reality-check period)

* No impulse spending during the wish list time! Window shop if you want, share a seat in front of the computer if you're looking online… my preference is to go hang out in antique markets and bohemian shopping districts for ideas, but you might prefer to go visit a travel agent's office or web site. It DOESN'T matter!

* Each partner gets equal time to show off their ideas if they want it.

Being realistic, there will, of course, be a price tag associated with the wish list. Also being realistic, not all luxuries cost an arm and a leg, either. If you have the iron will to make a strict budget and do without so that you can go hang out in Tuscany for a month next fall, good for you (and yours!) If you're like me, though, it may make sense to make do with lesser luxuries.

Luxury item #3: Keep looking until you find reasonably-priced luxuries that really make your life more worth living, then revel in them!

That's all it takes. If you get this far, you've done a few extremely healthy things. For starters, you've actually talked to your sweetie about money, without it being a crisis! You've spent some time dreaming together. You've examined your debt and thought about what it's costing you. And with any luck, you've found at least one thing you can enjoy without feeling guilty about what it's costing you… because it's an investment in your piece of mind.

–

Print and Internet publication rights are granted, free of charge, for this article, provided the credit paragraph and copyright remain intact.

If you use this article in HTML form, please set resource link as a hyperlink. Please e-mail me the URL of any place the article is posted, or a copy of any electronic newsletter or eZine, etc. A copy of any printed publication using this article would be greatly appreciated (contact me via e-mail for mailing address!)

About The Author

c Andy White, budget guy for Coudy Coffee – because life is too short for mediocre coffee. For gourmet coffee and espresso; coffee gifts, information and resources, visit http://www.coudycoffee.com.

andy@coudycoffee.com

Like you, many people continue making their minimum monthly payments believing that they are making progress. They are living in a state of denial saying "Someday, somehow, something will happen. Things will get better, and my debt problem will be gone." Then years go by and they only find themselves in a downward spiral getting nowhere. They have paid their creditors thousands of dollars but their debt load never gets lighter. For example, if you were to continue making minimum payments on a $9,000 debt, and not add any more debt, it will take you over 10 years to pay it off. You will end up spending many thousands more than the original amount and 80% of the money paid will have gone to interest and fees. Most people add more debt as they go, so the reality is this – Without an aggressive approach to terminating debt once and for all, you will NEVER get rid of debt.

Today, people have options. There are four strategies for dealing with problem debt you will see advertised: Debt Consolidation, Consumer Credit Counseling Services (CCC), Bankruptcy, and Debt Negotiation. Each strategy must be considered carefully!

Debt Consolidation – The Common Approach

Unfortunately debt consolidation is the most common solution people think of when they fall victim to financial problems. It is a sad fact that about 75% of people who consolidate their debt find themselves in much deeper financial trouble than they were in to begin with. All consolidation loans do is transfer debt from one place to another and is invariably a short term fix with long term pain. A debt consolidation loan will not reduce the amount you owe. You will still pay back 100% of the loan plus interest. This is not going to get you out of trouble and most of the time will only make things worse. Again, consolidation is not a plan to get out of debt but is instead just getting new debt to pay off old debt.

If you were to decide to consolidate, you would need to qualify first. Qualifications include equity in a home you own or other valuable, good credit and debt to income ratio. Most people burdened by debt find that even if they wanted to consolidate their debt they couldn't qualify for the loan anyway. Once you have taken out this loan, you have just gone from an unsecured debt to a secured debt – and gambling with all your assets. Consolidation loans are spread out over a 15 – 30 year period, leaving you exposed to losing your assets over the life of the loan. If you run into further difficulty in the future you stand to lose your home, car, and valuables.

The fundamental problem that people run into is that once the debts are paid off by the loan, they discover they have a new line of spending potential: empty credit cards. It's not long after these accounts are cleared that they are run up to the limit once again. This will leave you with both the consolidation loan and maxed out credit cards to repay. How are you going to repay the loan and the credit cards when you were unable to pay the previous debt in the first place? You will find yourself back in the bank for a second consolidation loan, extending your debt and making your debt problem even worse.

Bear in mind that being in debt leaves you with less cash you need to buy and plan for life's necessities. Although a consolidation loan may give you a lower payment and a little more breathing room, consolidation is not going to leave you with the cash to get you and your family through the next 10 to 30 years.

Consumer Credit Counseling Services (CCC) – Feeling of False Security

Consumer Credit Counseling Services (CCC) programs have a failure rate of 85%. They simply aren't effective. Here's why; you meet with a counselor who analyzes your monthly budget. The counselor will submit a proposal to your creditors for a reduction in the interest rates. You would then pay a monthly payment to them and they would then distribute that monthly payment to your creditors. These programs generally take 5-7 years to complete. The theory here is that your overall payment per month is lower due to the counselor's success at obtaining lower interest rates and more favorable terms with the credit card companies and banks. This approach is most often recommended by the banks themselves.

Here are the facts: CCC Services were created in the late 1970's when credit card and loan companies began to notice that many people were having problems making their minimum payments and defaulting on their debt. In short, the so-called "non-profit" companies are owned by the credit card companies and banks! CCC agencies are funded by commission by the credit card companies based on the debt recovered from you, normally around 12 – 15%. This means that for every $1,000 you give them, they can take as much as $150. If you're paying them a service fee of $20 per month, and the creditors are paying them $75, you can quickly see that CCC agencies are not working for you but for the creditors.

In addition, you have no insight into what the CCC agency is doing on your behalf and no control over the repayment process. They send in their single monthly payment, with no idea of how much is going to which creditor. Since most counselors are busy people who work based on high volume, getting a return phone call can be difficult.

It's key to know that with CCC programs, you still pay 100% of the debt plus a lower interest rate. The debt you walk in the CCC is what you walk out with. With all things considered, it works out to be about the same as your current minimum payments.

Bankruptcy – The Last Straw

Today more people than ever are turning to personal bankruptcy as a way of solving their financial problems. Estimates indicate that 2003 will see nearly 1 in 70 Americans filing for bankruptcy. People owing as little as $5,000 are unknowingly filing, not knowing of alternative methods of eliminating their debt. The reason people take this hasty action with such a low debt amount is the harassment and overwhelming pressure from impatient collectors trying to recover their money. In the case of Consumer Credit Counseling agencies, once they find that they are unable or unwilling to help, they will suggest bankruptcy as the answer – unconcerned of the effect it will have on your future.

In bankruptcy, a court order forces all commercial creditors to cease and desist from attempting to collect the debts you owe them. Depending on the bankruptcy declared (Chapter 7 or 13), it stops wage garnishment, reverses judgments, and generally wipes out debt.

For some people, bankruptcy is the only sensible option. If you have $60,000 in debts, and you'll never earn more than $1,200 per month, then you're broke! The sooner you eliminate the debt, the sooner you'll have a fresh start. With more than 1.4 million bankruptcy filings in 2000, Congress is passing legislation that will make it tougher to declare bankruptcy.

In bankruptcy, certain personal property is treated as exempt. The banks and creditors cannot touch that property in attempting to recover the money owed to them. Your home, car and other personal effects like clothing, and other assets are considered exempt, but this varies from state to state. Any property that is not exempt is liquidated and distributed to the creditors under the supervision of the court. Since most people entering bankruptcy have only exempt property anyway, there's usually nothing left to distribute, so the creditors typically get nothing.

Seems like a good deal? Many people mistakenly see bankruptcy as a good, low cost way to rid themselves of debt. There are other costs associated with bankruptcy that make it a very bad solution for most people. The cost of filing bankruptcy itself is minimal. Depending on what state you live in, you can expect to pay anywhere from $400 on up to $1,600 for the whole process. That's just the beginning. The bankruptcy will stay on your credit report for 10 years – and on your court records for 20 years. The seemingly "low cost" method will cost you dearly as it will follow you for the rest of your life. If you ever apply for a loan, job, apartment or insurance, one of the first questions normally asked is "Have you ever filed for bankruptcy?" And, for the rest of your life, you'll have to answer "Yes."

You might be able to eliminate your debt, but the effects emotionally and the effect on your personal life will last for many years to come. Consider applying for a terrific job after you have filed bankruptcy. These days, employers will run a credit report to determine how you faired financially. This will effect whether the employer will give you that dream job or not. Even if you do get the job and your employer later runs a credit report on you, you will still have to explain the bankruptcy. While employers can't fire you because of a bad credit report, they can certainly limit your future promotions.

Future purchases are affected as well; after several years, you may opt to purchase a home. If you're in sufficient shape at that point to qualify for a mortgage, you'll pay a higher interest rate than the average consumer who has never filed for bankruptcy. Assume you want to purchase a $100,000 house a few years after filing bankruptcy. You make a $10,000 down payment. This will result in applying for an $80,000 mortgage. While your "good credit" neighbor would obtain an interest rate of 4.5%, you would get a rate of 7%. While it seems that the extra 2.5% difference is not bad for having filed bankruptcy in the past, it's what you will pay monthly where you will feel the pinch. That extra 2.5% on a mortgage will increase your monthly payment by $200 per month with the total of your payments reaching more than $70,000 over the 30-year life of the mortgage.

Besides being a devastating blow to your credit, a bankruptcy can also be a very stressful and embarrassing decision to continually have to explain to every potential lender. If you have no choice, then you should proceed, understanding the consequences. However, the majority of people who take this method of debt elimination don't know what they're getting themselves into or the consequences thereafter. They are desperate, and they get talked into filing bankruptcy by the collectors or attorney without understanding the impact on their financial future.

Keep in mind that personal bankruptcies are usually unnecessary as there are better options available. Many people are forced, against their wishes, to file bankruptcy to protect themselves from aggressive creditor tactics or attorney. Ultimately, bankruptcy still means failure to employers and creditors.

Debt Negotiation – Light at the End of the Tunnel

Few people realize that there is another solution to burdensome debt, an approach that levels the playing field between you and your creditors, without having to go to court. The debt negotiation strategy will put you back on the road to financial freedom and in control of your life again.

The Negotiation Strategy allows you to turn that $25,000 of credit card debt into $12,500 or even as little as $9,000. In most cases, our clients have debts totaling $8,000 and have successfully saved them thousands while maintaining a reasonable credit rating. With a professional debt negotiator working for you, your debt can be cut in half or less.

How it works: Put yourself in the shoes of a manager of a collection department for a major credit card company. You know that bankruptcies are at an all-time high and that the chances of collecting on the outstanding debt worsen as the debt ages. You have the opportunity to close your books on a delinquent account by collecting 50 pennies for every dollar owed by the debtor, or take a chance on never collecting a single penny by trying to hold out for the full value. You also realize that once the debt leaves your bank (usually after six months or so), it will go to a third-party collection agency. The agency will take at least 15%-20% commission right off the top of whatever they collect, and they are unlikely to collect more than 70% of the debt even with the most aggressive tactics. So you'll probably never retrieve much more than half the money anyway. When you look at it this way, collecting 50% now doesn't seem like such a bad deal.

The way it's described, it sounds easy. You might be thinking, "I'll the collectors and do this myself." You'll reach the "customer service team" and the representative will inform you that other banks may settle for 50%, but their bank never settles under any circumstances. Of course, they do have that "great" hardship program for you. After you've called a few times and received the same treatment, you'll probably end up with the idea that debt negotiation doesn't work. The banks will rarely take a debtor seriously. They simply don't believe you and they think your hardship story is phony. The banks are quite prepared for the amateur do-it-yourself negotiator. They have the telephone scripts set up so that by the time the conversation is over, you will feel guilty about the money owed, and their lame hardship plan sounds like a great deal after all.

Having a third-party professional on your side makes all the difference in the world. Once your creditors realize that they are talking to a professional, someone who knows the laws and regulations, they quickly change their tune. A negotiator will obtain better results than you could ever obtain on your own, simply because all of the bank's tactics are stymied by the fact that they can't talk directly to you. They can't apply psychological pressure to you since this is filtered out by your Professional Debt Negotiator.

Consider this: Creditors pull out all the stops when you fall behind. They have gangs of collectors ready to pressure you with carefully scripted techniques and mind games. They have attorneys and collection agencies ready to step in and go after you full throttle. You need to level the playing field. The best and only way you can concentrate on improving your financial future is to let a professional deal with the aggravation of the nonstop phone calls. Bottom line – If you're looking for the most effective, low-cost, and fastest way to terminate your debt problem once and for all – Negotiation is the answer.

About The Author

Drakeport Financial will host a free Debt Management Seminar for people who wish to correct existing debt problems or avoid the possibility of such problems developing in the future. Seminars are held Saturday mornings from 9 to 11 a.m. at locations throughout the United States. Call Drakeport Financial today toll free at 866-676-4945 for more information. You may also visit the website: www.drakeport.com

custsupport@drakeport.com

By paying only the minimum monthly payment each month, you are virtually guaranteeing that you will be a customer for life. If you are genuinely concerned about your financial wellbeing, you should be adamant about paying more than only the minimum balance on your credit cards each month. You must remain cognizant of the fact that if you can't afford to pay more than the minimum balance on your card each month, you can't afford whatever it is that you are buying.

When making a credit card payment, your funds are separated into two parts; interest and principal. Traditionally, when you only make minimum payments, most of it goes towards interest that is paid to the credit card company, which is why it takes so long to pay off your debts. Would you pay $10,000 for an item that is priced at $5,000? If you purchase that item on a credit card that is exactly what you're doing. If your credit card has an 23% interest rate and you only pay the minimum payment each month you will never get ahead!

Alan Barnes
IAPDA Certified Debt Arbitrator
President and CEO of Debt Regret

http://www.debtregret.com

Needless to say, debts can be large (mortgage or loan payments) or comparatively small (telephone or credit card bills).

Although the word debt typically carries negative connotations, there are some positives. For example, few people have the total asking price outright to purchase the home or car of their dreams. There are limited options for acquiring these big ticket items without incurring some debt. Also, assuming some debt makes it possible to pay your electricity and gas bills based on usage. You pay for the service after, rather than before, each month's use.

So why all the moaning and groaning when the subject of debt arises? Primarily because many of us have an unbalanced debt to income ratio. Debt becomes burdensome when we owe as much or more than we earn. We have taken what could be a benefit and turned it into the bane of our existence. Those of you who cringe each time the telephone rings, know this feeling of dread very well.

Obviously, some debts, such as rent and utility bills, are perpetual or recurring. You must continue to pay these each month if you want heat and electricity. Other debts, such as car payments, loans and mortgage payments can eventually be retired.

Some debts (most credit card debt) are simply unnecessary. If you are among the rising numbers of people for whom debt has become unmanageable, don't despair. Start by evaluating all of your expenses. If you don't really need the item or service, do yourself a favour and keep your credit card in your wallet. With a little patience, planning and sacrifice, you can dig yourself out.

Tony Shipley

http://www.badcreditmortgages247.co.uk

If you carry a $1,000 balance on a credit card with a 19% interest rate, and you pay the minimum monthly payments, at the end of one year you will have paid $190 in interest.

If you get $1,000 in a tax refund, small inheritance or from somewhere else you now have a choice to make. You can earn 20 bucks in a savings account or save $190 by paying off that credit card. Keep in mind that your 20 bucks is taxable income so you'll be left with $15 or so after taxes.

Do you need a savings account for emergencies? That savings account may be causing those emergencies! Think about it this way…

If you are earning money in a savings account at 2% and paying anything over 2% on your debts you are sliding backwards financially and you'll never get ahead. It's basic mathematics.

If you earn 20 bucks for five years in your savings account you'll have $100. If you pay $190 in interest on your $1,000 credit card after five years you will have paid $950 in interest charges.

In other words you have wasted, lost, burned or flushed $850 by having a savings account. ($950 – $100 = $850) OUCH!

What can you do? Pay off that credit card and use that as your emergency fund. It's not the best way to do it but it's better than earning 2% and paying anything over 2%.

So, while the stock market is on it's roller coaster and the economy is challenged your best investment, bar none, is your debts! Get them paid off!

Leo J. Quinn, Jr. owner of http://www.LeoQuinn.com is a financial educator from the Albany, NY area. For over eight years he has been helping thousands of people get control of their finances and get out of debt in a fraction of the normal time. He has a special offer for readers of this newsletter at http://www.1shoppingcart.com/app/adtrack.asp?AdID=132551

A common derivation of that is "expenses rise to meet your level of income." Has that happened to you? It happened to me in 1991 and I'm particularly aware that it could happen to me again in 2005.

In 1991 I took my BS in finance and started a carpet cleaning business…like most finance majors, of course! I learned the business for a couple months and was earning a whopping $200-$300 per week working for someone else.

When I left that company and went out on my own, the ad I used FLOODED me with business. I had 15 calls by 10:30AM the day the small ad first ran. The answering service told me every "little old lady in Saratoga was calling".

So almost immediately I went from making $200-$300 a week to making upwards of $1000 per week. WOW…23 years old and making that much money WORKING FOR MYSELF was great fun…had a great boss!

I don't remember what I spent all the money on other than one of those nationwide pagers but my spending rose dramatically. But guess what? At $7.95 per room for carpet cleaning it doesn't take a math major to figure out I was working very hard to earn $1000 a week. So, of course I got tired and lazy and slowed down. My income level dropped to some level probably near $500 per week but my lifestyle didn't and you can figure out the rest.

If, while earning $1000 per week I was living like I made $400-$500 per week I would have been sitting pretty… or whatever the male equivalent of sitting pretty is! :>)

Recently in a workshop I had a woman relate her story. Her husband had been out of work because of injury for about a year. They had been living on only her income for that time. Before his injury they had been living on two incomes and usually had just enough money to meet all their expenses.

The injury had her worried. How could they do it on one income?

Somehow, THEY MADE IT. All the bills were paid on time. They didn't take any drastic measures like canceling the cable or pulling apart the 2-ply toilet tissue to get 2 rolls out of every one.

This gal was amazed and tremendously EXCITED because her husband was going back to work soon and she was going to be able to put a large chunk of one entire income toward eliminating all their debt using my program.

(Do you have it yet?) Two thousand dollars a month put under your mattress or towards paying off a debt is $24,000 per year or $120,000 after 5 years.

This family was forced to break Parkinson's law and you see how it dramatically improved their lives. The silver lining in the cloud.

Don't be forced to break the law…do it voluntarily starting today. If you are a two-income household pretend that one of the incomes is now gone. If you are a one-income household advertise for a wealthy widow or widower and then pretend that your income was slashed in half.

Keep track of every penny you spend…write it down…put it in your Quicken, Microsoft Money or any spreadsheet program…just get it on paper so you can see it.

Be brutal about it and I'll bet you can live on half of what you now make. Take the "missing" half and pile it on your debt. (you know which debt don't you?)

Break Parkinson's law and you'll never be sorry!

Leo J. Quinn, Jr. owner of http://www.LeoQuinn.com is a financial educator from the Albany, NY area. For over eight years he has been helping thousands of people get control of their finances and get out of debt in a fraction of the normal time. He has a special offer for readers of this newsletter at http://www.1shoppingcart.com/app/adtrack.asp?AdID=132551

Because they have this information, you end up on a number of lists. The sorting and use of these lists are an art and science. It is the source of the mail you receive, the offers you are made, and the advertising to which you are exposed.

This makes for very effective advertising. They can target your "known" wants and desires. Huge amounts of money are spent to convince you to buy this or that product. You have heard how expensive Super Bowl ads are each year. They pay this type of money because it works.

Then to top it all off they make it so easy to buy. If you don't have the cash, they provide you with credit, easy-pay plans, personal loans; anything to make the purchase possible. Many companies make as much from their financing divisions as they do from selling you their products.

So what do you do? How do you fight this financial onslaught and win? It requires effort and advance planning. You need to wring all the value you can from your money. Become adept at making each dollar do the work of two.

You need to budget for purchases. Even if that means that you think about it for just a few minutes before you plunk down your hard earn money. Justify your purchases; do you need it, does it make sense, can you do without? These are questions you need to ask yourself. They may fly in the face of the materialism which surrounds us all, but they need to be answered nonetheless.

You may find using a purchase-checklist helpful. Anytime a purchase exceeds what you have in your pocket tick down this list and see if it really makes sense to buy it.

*How much is it?

*Is this a sale price?

*If so what am I saving over regular price?

*What will happen if I don't buy it now?

*Can I pay cash?

*Where will the money come from?

*If not cash, what will be the credit cost?

*Is it worth it at the price with the credit cost added in?

*Does the purchase fill a need or a want? (think hard)

*Why do I need this item?

*Why do I want this item?

*Can I justify this purchase to another person?

*What would I say?

*Would I accept these reasons from someone else?

This should help in slowing you down. Couple this with not taking your credit cards with you when you shop. It does take work, but a little extra work is better than being a slave to your debt.

Now with the money you save go to work on your debt reduction plans. Work that side of the equation as hard as you do the spending side. Place as much as you can on your bills. Reduce and eliminate them.

(c)2005 David Wilding

David Wilding has for the last ten years worked with both groups and individuals to rid their lives of debt. Visit his site http://www.debtattack.com for more ideas, tools, and strategies to get rid of your debt.

Credit scoring gives more weight to more recent events. So if you use of credit is down and you're handling your debts responsibly, you score will go up. Remember you have to use credit to get a credit score.

Many lenders love to extend credit to recent bankrupts. They know you have more free cash because most of your debts were discharged. They also know you can't go bankrupt again for another seven years. So they will extend credit, usually with outrageously high interest rates.

If you managed to keep your car and/or house through the bankruptcy, your first step is to pay these bills on time.

If you have to start fresh expect to pay. A car loan may carry a 21% interest rate. Credit cards you're offered might have an interest rate around 24%. These rates will make it very difficult to stay on top your debt.

Many experts advise that if you need a new car to get it before you apply for bankruptcy and keep your payments up. You'll have a lower interest rate and will be on your way to re-establishing credit.

You might only qualify for a secured credit card at first. You will have to make a deposit of several hundred dollars with a bank, which will then grant you a line of credit in the same amount. If you handle this card correctly, the card will be converted into a regular unsecured card in a year or so. Make sure the lender is making periodic reports about your good behavior to the credit bureaus.

Don't use more than 20 – 25% of your available credit, even if it's only $500. Pay your bills on time. If you act responsibly, in a few years you will be able to loans and mortgages at rates only slightly higher than prime borrowers get.

If you need to rent an apartment, you might have more difficulty. Landlords who check your credit report might not rent to you at all. Your auto insurance premium will likely rise and you might have difficulty getting a new job. These are some of the downsides of going bankrupt.

Everything is not all brightness and light, but the few sacrifices you will face might be worth the removal of the emotional and financial pain you are suffering every day you struggle with a load of unpayable debt.

Chris Cooper is a retired attorney who has spent several periods of his life deep in debt. At http://www.credit-yourself.com he tries to pass on some of the knowledge he picked up in his journey to become debt free.

The anomalies of credit scoring also work against debtors struggling to pay off debt. Your score will be low because of excessive use of debt and missed payments. You're unlikely to get new credit and the interest rates on your credit cards might be raised to usurious levels. You are likely to have a better credit score and find it easier to get credit – very expensive credit – after bankruptcy than before.

Also the stigma and embarrassment that used to accompany bankruptcy has largely disappeared. To many, it has become just another financial planning tool.

The Bankruptcy Procedure

Bankruptcy courts are part of the Federal court system. The bankruptcy law itself is a Federal law, although the states can have their own laws, which govern such things as exemptions. Federal bankruptcy judges apply both the Federal and state laws in the jurisdiction where they sit. Debtors sometimes have a choice of which law should apply.

Bankruptcy proceedings are commenced by filing certain required forms and paying a fee. Filling automatically stays all legal proceedings against you as well as all debt collection actions. Fees can be paid in installments, but must be completely paid before the dischare will be granted.

A trustee will be appointed. His job is to review your financial affairs, collect and sell assets, if necessary, and distribute the proceeds to your creditors. If you are setting up a repayment plan, he will be responsible for seeing it implemented. He will even pursue your debtors to collect money owed you that can be used to pay off your creditors.

The trustee's powers include the power to set aside preferential transfers made to creditors within 90 days before the filing of the bankruptcy petition, the power to undo security interests and other transfers of property that were not properly recorded under non-bankruptcy law at the time the petition was filed and the power to pursue claims such as fraudulent conveyance and bulk transfer remedies available under state law.

He also holds meetings which are attended by the debtor filing for bankruptcy and his creditors. This is probably the hardest part of the whole proceedure for most people.

The trustee will question the debtor about his financial affairs and go over his financial records to determine that all assets have been disclosed and that no fraud is being perpetrated on the court.

Attorneys for the creditors are also allowed to ask questions about your expenses and assets.

The trustee will also instruct you on other alternatives and lecture you on the proper use of credit.

He will then issue a report the bankruptcy judge will use in deciding whether to dicharge your debts and which debts are to be included.

A debtor is unlikely to ever meet the judge. In a Chapter 7 case, the debtor will not appear in court unless an objection is made. In a Chapter 13 case, the debtor might have to appear at a hearing approving his repayment plan.

Most of the work will be done in the trustee's office.

What Debt Can Be Discharged?

Not all debt can be discharged by a bankruptcy court.

A bankrupcy court cannot discharge debts arising from alimony, child maintenance and support obligations; certain taxes (including the last three years income taxes); debts for educational benefit overpayments or federal student loans; debts for willful and malicious injury; debts for death or personal injury caused by the driving while intoxicated from alcohol or other substances; and debts from criminal restitution orders.

To the extent that these types of debts are not fully paid by the sale of assets during during a Chapter Seven case or not fully repaid during a Chapter Thirteen case, the debtor is still responsible for them after the bankruptcy case has been concluded.

Other debts may or may not be discharged. Debts for money or property obtained by false pretenses, through fraud, embezzlement or misuse of funds while acting as a fiduciary; debts for willful and malicious injury to another entity or to the property of another entity; and debts arising from a property settlement agreement incurred in connection wth a divorce or separation are discharged, unless a creditor convinces the court to have such debts declared exempt from discharge.

If you can't get at least half of your debts discharged, it's not worth the effort.

Chris Cooper is a retired attorney who has spent several periods of his life deep in debt. At http://www.credit-yourself.com he tries to pass on some of the knowledge he picked up in his journey to become debt free.