Avoid Credit Cards this Holiday Season

Christmas comes later next month and, for some, the ritual of running up a large credit card tab and spending the next year paying it off feels necessary. In this economy, however, and in the wake of changes to the Bankruptcy Abuse Prevention and Consumer Protection Act, we suggest re-thinking this strategy.

According to the new rules, debts to a single creditor totaling more than $550 for luxury goods or services can't be discharged in a bankruptcy. Should you find yourself in a tough spot after the holiday season -- so tough that you're forced to declare bankruptcy -- you might not be able to discharge credit card debt you've rung up for Christmas purchases. If you've accumulated thousands of dollars in Christmas credit card debt, you'll be paying it back no matter what.

Instead of relying on your credit cards this holiday season, instead try to save up enough money to do your Christmas shopping, or look into making your own gifts. The potential trouble over-spending could cause you down the line is not worth it.

Smart Christmas Spending

The holiday season is one that brings joy to the hearts of many. It's a chance to see and spend time with loved ones, eat cookies, drink hot cocoa and exchange gifts.

For some, however, this same season can be an extremely stressful period of time.

The pressure to purchase gifts for everyone can take its toll, and in some cases, can cause people to spend more money than they can possibly afford. They ring up astronomical credit card bills and spend themselves completely dry. Christmas shopping can become the catalyst that sparks an eventual bankruptcy, if you aren't careful.

Here are a few tips on how you can avoid holiday over-spending and eventual financial issues.

1. Establish your holiday shopping savings early and contribute to it throughout the year.
2. Buy gifts during the year, even when you're nowhere near Christmas.
3. Set a limit for your Christmas shopping.
4. Don't bring your credit cards. This forces you to shop only with the cash you've saved.

How to Take a Positive Approach into Bankruptcy

Bankruptcy can be seen as a low point in the life of the filer, but it shouldn’t be. One should think of the low point as being the event that has forced one into filing for bankruptcy, like illness or the loss of a job. If you’re filing for bankruptcy protection, you should see it as a fresh start, since this is the reason bankruptcy was first created.

The bankruptcy process gives the debtor the chance to clear away many overwhelming debts, freeing up income for secured debts like a mortgage. When discharged from bankruptcy, the petitioner will find less hassle from creditors.

If someone has filed because of an illness, divorce or unemployment, the last thing he or she needs is stress from collection agencies. To most of these folks, however, the filer is just a name, number and collection amount. However, debt collectors work everyday with people in default, so they become hardened.

If you switch your mindset from looking at a bankruptcy filing as a low or looking at yourself as a failure to seeing the process as a fresh start, you can let the filing take away a lot of stress. Let your bankruptcy lawyer help you remove the negative images you might associate with it. If you’re filing for bankruptcy, don’t think of it as a negative. Think about the fresh start it will provide and new hope you will have.

Should You File for Bankruptcy?

“Should I file for bankruptcy?” It’s a common question many are asking themselves, especially in these tough times. However, the answer can only be answered by the person who is thinking about filing for bankruptcy protection. Bankruptcy was designed to protect individuals and business from their creditors and discharge eligible debts, and after this discharge is entered by the court, the parties can go on without being burdened by debt and lead a productive life. Essentially, bankruptcy is able to provide one with a fresh start.

So, should you file for bankruptcy? First, you’ll need to weigh the positives and the negatives, and then make the soundest financial decision. When it comes to overburdening debt that has you thinking of filing for bankruptcy, there are no easy answers. You should meet with a bankruptcy attorney to discuss your income, expenses and assets to determine the best course of action, whether it’s Chapter 7 bankruptcy, Chapter 13 bankruptcy or not filing at all. Each option comes with its own sets of rules: Chapter 7 is to completely discharge all your debts, while Chapter 13 reorganizes them to make it easier to pay them down.

At the end of the day, the decision for file for bankruptcy is a personal one that must be made by the filer, and should not be taken lightly. How the party goes about the process depends on income, expenses and assets, and these are all different, which is why it’s important one seeks the advice of a competent bankruptcy lawyer.

Need to get in touch with a bankruptcy attorney in Brooklyn? Contact the experts at Kanzer & Associates by visiting www.KanzerLaw.com.

Bankruptcy: Don’t Let Credit Card Debt Overwhelm You

If you’re constantly in the financial red because of credit card bills, then filing for bankruptcy might be an option to consider. It can help many persons in similar situations, but before you phone up the first bankruptcy attorney you find, you should know about the benefits and disadvantages to filing for bankruptcy because of credit card debt.

Advantages

• You can learn sound financial tips that can help you in the future.
• You will be able to get out of debt in a fast manner.
• You can stop harassing creditors from constantly calling you.

Disadvantages

• You will not be allowed to use your credit cards and not be able to apply for new cards for a while.
• You will have to attend credit counseling classes in order to obtain certificates of financial education.

You have the ability to file the paperwork yourself, but you should contact a bankruptcy lawyer. If you need a bankruptcy attorney in Brooklyn, then get in touch with the experts at Kanzer & Associates by visiting www.KanzerLaw.com.

Bankruptcy Rules

It can be a daunting and stressful process to declare bankruptcy, but knowing the rules and having on your side an experienced bankruptcy attorney can help lessen the pains.

Chapter 7 vs Chapter 13

Chapter 7 bankruptcy will write off most unsecured debts within 90 days of filing. The bankruptcy will stay on your credit report for 10 years, and while your debts are forgiven, you may have to sell off some property and those proceeds will be distributed to creditors.

Chapter 13 bankruptcy will establish a repayment plan (three or five years) to repay the debts. This will remain for seven years on your credit report, but you’ll get to keep all your property.

When does each make sense?

Chapter 7 can make sense if you no assets (house, car, etc.) to lose, but you may be forced to sell valuable belongings. Chapter 13 is recommended for those who fell behind on payments thanks to a job loss or medical problem, but can pay if given time.

Credit: What happens and how do I rebuild?

You’ll get a notation on your credit report of filing for bankruptcy. Your credit score will most likely take a hit, but how bad depends on what your score was prior to filing. This won’t be forever the case.

Rebuilding credit might be troublesome for filers, as credit got them into this predicament after all. To rebuild, you’ll need to make sure the accounts on your report are all at a zero balance. Then, get credit cards (consider secured ones) and pay them off every month. Another way to rebuild may be to ask a friend or relative if they’ll let you piggyback on their credit.

Don’t go into bankruptcy alone. Kanzer and Associates has a qualified New York bankruptcy attorney that can help you. Enlist our services today by visiting www.KanzerLaw.com. 

Bankruptcy Code

The federal bankruptcy code can be often hard to understand. It’s important (and in some cases required) that you hire a competent bankruptcy attorney who can guide you through the process.

Does bankruptcy code require my belongings to be liquidated?

Most of the filings are liquidations, and they come under Chapter 7. Chapter 7 bankruptcy usually involves the trustee to sell all non-exempt assets, and the funds made are distributed among the creditors. For individuals, the court might discharge any of the remaining debt. For businesses, the operation is shuttered.

What about reorganization?

Creditors often have a better chance for being repaid under Chapter 11 and Chapter 13. Chapter 11 bankruptcy is used more by businesses and those with high incomes or complex debts. Chapter 13 bankruptcy is more for individual consumers. Either way, debtors who file under these chapters agree to repay the debts according to a court approved schedule.

How about voluntary and involuntary bankruptcy?

Most of the filings are filed voluntarily by debtors. After you file, debt collectors are forbidden to contact you and repayment is decided by the court. Creditors, however, have the option of forcing the debtor(s) into involuntary bankruptcy, but this is done when a number of creditors petition the court, which will determine whether they are entitled to relief.

New York bankruptcy attorney Michael Kanzer of Kanzer and Associates can assist you with all these issues. Enlist his services today by visiting www.KanzerLaw.com.