Bankruptcy courses are available for individuals interested in the legal profession. Understanding a credit report and legal issues that impact credit are covered in bankruptcy seminars. Educating on Fair Credit Reporting and Collection Acts are included as well as the Equal Credit Opportunity Act. Legal issues regarding consumer rights and how that relates to debt is included in these classes. Attending these programs to learn about all the different issues concerning credit and problems that lead to the alternatives of bankruptcy will prove to be very educating. "For the LORD giveth wisdom: out of his mouth cometh knowledge and understanding." (Proverbs 2:6)
There are a number of important topics covered in bankruptcy courses concerning the relationship between creditor and debtor, such as collection procedures and negotiation of collections. Attorneys and credit negotiation companies will negotiate with creditors in debt reconciliation for debtors. Included in this education are ways to handle negotiations with debtors and consumers and how to be successful at doing it. Professionals in legal services have to be knowledgeable about debtor rights as well as consumer rights concerning debt collections. Negotiations between two parties must be satisfactory for both in order to be successful. Classes include key principles in negotiating. Credit Management studies and understanding personal negotiation style is part of the information learned at bankruptcy seminars. Consumers are looking for informed professionals who can help with credit problems and issues and will often look to legal services for credit repair and monitoring.
Understanding current bankruptcy laws and what they mean to consumers is covered in bankruptcy courses. The difference between filing Chapter 7 or Chapter 13 is explained in bankruptcy seminars. Chapter 7 is referred to as liquidation because assets are liquidated and proceeds are given to creditors. Chapter 13 helps the debtor to pay debts with the protection of the government. High credit card debt, medical bills, and other unsecured debt may be filed under Chapter 7. Chapter 13 allows the debtor to pay off debts with lower or no interest. Usually a reduction of debt is possible and the debtor is allowed so many years to pay back creditors under Chapter 13. Bankruptcy education usually covers all options and particulars. Anticipated questions by debtors are included in bankruptcy seminars. Possible evaluations might be made by the student in using a credit report to determine what kind of bankruptcy would be feasible according to credit history. Learning scenarios might include evaluating whether a debtor needs to file or if debt consolidation or negotiation would be the best choice.
In learning about filing one of the chapters, it is important to remember that every person's circumstances are unique and should be handled that way. A thorough investigation would need to be done with the consumer for a complete understanding of their financial situation. After research and evaluation a determination or advice would be offered. A professional will make sure they understand all the facts before offering a conclusion. With bankruptcy courses one will learn that there is usually never a definitive answer. The facts are presented and discussed, then laid out in an analysis to the client with several choices. A legal professional will need to be able to answer any probable questions that might be asked by the debtor. The importance of understanding the process and all that it entails is why attending class is a good idea. Laws have changed so a refresher course is always a good idea. Learning customer service issues and how to handle a client who is distraught over their credit situation is also helpful. Each individual is unique and should be evaluated by listening to their perspective. Sometimes just having someone to listen and offer an unbiased opinion is very helpful in determining what the next step is. Some clients are anxious to stop harassment from impatient creditors. Under the law, harassment from creditors, debt collection agencies, and all collection activities towards the debtor must cease. Creditors have an opportunity to attend the court proceedings and participate in the session. However, there are fines given to creditors who continue to harass after debtors have filed.
Bankruptcy courses cover many different aspects of credit issues. A credit report is analyzed in class. Personal information, public records, credit history, and financial records are evaluated. Each person may obtain a free annual copy of their credit report by requesting it from the three major credit bureaus. Dissecting the credit report, students take each section and evaluate credit worthiness. Learning about credit report scoring is also evaluated in bankruptcy seminars. Some cover aspects of reestablishing credit. This information will be invaluable to the debtor who is anxious to reestablish credit worthiness after filing bankruptcy. It is possible to reestablish credit by applying for a secured credit card. As creditors start reporting to the bureau on newly established accounts credit scores usually start rising, as long as the payments are paid on time and credit limits aren't maxed out.
Bankruptcy ExemptionsBankruptcy exemptions are used when a person files for one of the chapters. Filing is about getting control of one's financial budget and debt. Many bankruptcy attorneys will suggest leaving the guilty feeling behind, and instead concentrating on the future; the fresh start of learning how to manage finances in a responsible and organized way. Not only do regular people file for personal bankruptcy, but large international organizations do as well. However, this doesn't change the fact that people should keep financial promises. When a Christian agrees to pay a debt, as with using a credit card, they are also making that promise to God. The Bible says: "When thou vowest a vow unto God, defer not to pay it; for he hath no pleasure in fools: pay that which thou has vowed" (Ecclesiastes 5:4-5). Both the moral and financial issues of the situation must be considered when a person wants to go bankrupt.
The best part of debt forgiveness is learning and understanding what went wrong with the decisions that were made and to develop a plan of how to fix it. Exemptions are the items that are not included in a discharge. There are two major types: chapter 7 and chapter 13. Filing for chapter 7 requires the debtor to liquidate all unsecured debts minus the bankruptcy exemptions. Chapter 7 bankruptcy applies when the expenses a person has outweigh their income. A debtor will receive a discharge from all their unsecured debts within 7 months from filing. Filing for bankruptcy, chapter 13, forces creditors to negotiate. This type is filed when the debtor's income outweighs their expenses and when a debtor is default on the non-bankruptcy exemptions such as mortgage, car payment, taxes, and child support. They must also have years of unfiled tax returns, and assets that are worth more than their available exemptions. Chapter 13 bankruptcy allows the debtor to pay off their debts at much lower amounts than actually owed, and it is considered paid in full.
All that is exempt is a portion of the debtor's personal property that can be kept, while all other assets are liquidated. These exemptions are dependent upon the status of the debtor. When filing for bankruptcy, the statutes change from state to state. For example: in Texas a single person can only exempt a total amount of $30,000 in property. A family n Texas can only exempt a total of $60,000 in property. In addition to the numerical worth, all household furnishings are said to be included in the property bankruptcy exemption. All food and clothing is also an exemption. Jewelry can be exempted as long as the worth does not exceed 25% of the state individual limit. More exemptions include farming and ranching equipment for farmers or those whose livelihood depend on the cultivation and sales of plants, or animals.
All smaller athletic equipment such as bicycles, tennis rackets, roller blades, and ski equipment are exempt. Athletic equipment that is not included are sailboats, jet skis, and powerboats. A two, three, or four wheeled vehicle is exempt for each member of the household that holds a drivers license. Household pets are exempt. Health aids such as wheelchairs, elevators, and air filtration systems are also considered bankruptcy exemptions. Many people filing for debt forgiveness wonder if life insurance policies are exempt, the answer is yes. Life insurance policies are exempt because they were established to support a beneficiary in case of death of the debtor. In addition to life insurance policies, all retirement financial accounts such as IRA's and 401k's are considered.
It is important to take a complete inventory of all assets to determine which type of bankruptcy is the right decision. It is also important to consider an alternate method for debt removal that does not involve filing for bankruptcy. Sometimes the assets are much more that the bankruptcy exemptions limit. In this case it may be wise to evaluate whether or not a different plan of liquidation can allow the debtor to pay their debt without having to obtain the stigma and bad credit of filing for bankruptcy that will stay with them for the next 7 to 10 years. Statistics show that personal bankruptcies are reaching record levels. This is not surprising since consumer debt levels are also reaching record highs.
Those that are younger should think long and hard about whether or not filing for bankruptcy is the best decision. Debt forgiveness causes serious damage to the credit report score, which is required to apply for any other loans or types of credit in the future. If a debtor is planning on buying a home or car within the next 7-10 years, going bankrupt will force them to pay much higher interest rates, which in turn renders the item purchased a lot more expensive than it is worth. Debtors should weigh all options and seek counsel before making any major decisions.