How To Get A ClickBank Refund

There’s a lot of crap for sale on ClickBank. There are also some good things available. Personally, as a software/ebook seller I like to use ClickBank because they handle all the tax collection issues (this is going to become a big issue for people selling things directly via PayPal in the next few years, trust me) and they pay regularly and consistently.

But I also like to use ClickBank as an individual buyer because they make it easy to get a refund. So if something I buy isn’t up to snuff for whatever reason (see my recent Google Nemesis review) I can get a full refund within 8 weeks of the purchase, no questions asked.

There are two ways to get a refund. The simplest is to simply take the electronic receipt ClickBank mailed you after the purchase and forward it to refunds@clickbank.com along with a brief message asking for a refund and why you want the refund.

The second way is to go to the ClickBank purchase questions page and select the “I would like to request a refund” subject. You’ll have to fill in the purchase details (obtained from the aforementioned receipt) and give an explanation. (Since you need the receipt to do this, it’s just simpler to mail a copy off IMHO…)

In either case, you’ll get a refund within two or three business days. It’s really that simple.

BTW, refund requests shouldn’t be knee-jerk reactions. If you’re having a problem with the product, contact the vendor first and see if they can fix it. Refunds should be a last resort. Sellers get notified when refunds occur and can see the reason why a refund was requested… there’s nothing worse than getting a “the product never worked” reason when you could have fixed it easily enough if the buyer had contacted you first.

Out of all the ClickBank products I’ve purchased, I think I’ve only asked for refunds on two of them.

New Bankruptcy Rules

Bankruptcy laws have been set in place to help individuals or businesses get a fresh start when living under overwhelming debt. The new bankruptcy rules are not eliminating the process, but are making it more difficult for some people to declare bankruptcy. Whether a person or corporation has had some kind of catastrophic event that has caused a financial crisis, or they have gotten in debt through inattention to their financial dealings, they have a way to start anew through filing for debt protection. Once the debtor has declared bankruptcy and asked the court's help to get out of his predicament, his creditors cannot harass him for the money they are owed.

The new bankruptcy rules governing who can file for bankruptcy are given under certain "Chapters." Personal bankruptcy is filed under either Chapter 7 or Chapter 13. In Chapter 7, the Trustee will liquidate all of the debtor's non-exempt property and then distribute the money to creditors. Exempt property includes a person's home, automobile, household furnishings, and any tools or equipment necessary to his livelihood (for example, a carpenter could keep his tools). The rules of exemption vary from state to state, so a debtor will have to check with local attorneys to learn about local practices. Bankruptcy laws state that once all those creditors have been paid something, the debts are discharged, and the debtor starts over with a clean slate. To start the procedure, the debtor files a petition with the court with a list of unsecured creditors and the amounts due them. Forms are available to handle the case personally, but it's usually wise to have an attorney handle the filing. The filer will be assessed fees for the petition with the court, plus attorney fees. The Trustee also receives a fee, but that comes out of the monies in the estate and not from the debtor directly. A Chapter 7 is usually discharged within six months.

Filing under Chapter 13 results in a reorganization, where the debtor presents to the court a plan for paying down his debts by making regular payments to the court over a three-to-five-year period. At the end of that time, all unsecured debt is discharged. This type is usually more satisfactory to creditors because they will receive a greater percentage of their bill. This won't change under the new bankruptcy laws. Both types result in freeing the debtor of unsecured debts, stopping foreclosures and repossessions and utility shut-offs. For their part, creditors must stop writing or calling the debtor about what is owed.

Current laws do not discriminate between people who earn a lot and those who earn a little. The new bankruptcy rules will change that provision. The court will require new guidelines to see if the debtor qualifies for bankruptcy. Under the new bankruptcy laws, anyone with income exceeding the cost of living index in their area will be required to pay monthly payments to creditors for up to five years to repay the debt. Bankruptcy will be more difficult to file, and because of the extra work involved, attorneys will charge more. The rules will hurt those who have a good income but have high payments on homes, rent, or car payments. Those existing payments will not be taken into consideration by the court when determining the amounts that must be paid to creditors each month. The court will apply the "means test." The end result may be that some debtors will sell their homes and/or cars and move to a less expensive area in order to afford the payments under the new bankruptcy rules.

Undoubtedly, more people will take advantage of Debt Settlement Programs to reduce debt for those who have good incomes but have trouble making monthly payments on credit cards, personal loans, medical bills, and other types of unsecured debt. Although the settlements on unsecured debts vary, a savings of 60 percent is common. Clients make payments to their own bank account while the debts are being negotiated. The fees for the program are taken out of the account each month until paid, but the funds to pay the creditors remains in the account until settlements have been negotiated. The new bankruptcy rules may have a hidden benefit. More people will opt for debt consolidation, home equity loans, and best of all, will learn how to be good stewards of their assets. Being a good steward of God's gifts is commanded in 1 Peter 4:10, "As every man hath received the gift, even so minister the same one to another, as good stewards of the manifold grace of God." As we follow God's command, we will learn to live abundantly without incurring lots of debt. This will make us a better witness to those around us and will give us financial freedom.

Life After Bankruptcy

Life after bankruptcy is like a road with a fork in it--one can choose to take the path that leads to better financial decisions and a more prosperous future, or take the path of repetition and be no better off than before. The point is, for most people who have filed for help under Chapter 7 or 13, it will be necessary to handle finances differently than in their pre-bankruptcy days, according to those who give financial advice after bankruptcy. When debts piled up out of "wants" instead of "needs" a change in attitude is absolutely necessary. However, when the process has resulted from personal tragedy, i.e., job loss, illness, or accident that has drained a person's financial reserves, the situation is quite different.

Financial advice after bankruptcy is available from more than one source. The attorney who helped to file the case in the first place would be the logical first choice for guidance. Where an individual filed on his own (not usually the best way, but for some it can be done), then finding an attorney who handles these cases would be a good beginning. In addition, there are a number of consulting companies who will help a person with financial problems without charge. Conservatism in financial matters is the logical first approach to regaining financial stability in life after bankruptcy. Separating what is needed from the wants in one's life can put things in perspective. Simplifying life helps not only on the financial level, but on the spiritual as well by relieving the stresses that come with money problems. Jesus helped his disciples not to rely on money for their security: "And commanded them that they should take nothing for their journey, save a staff only; no scrip, no bread, no money in their purse;" (Mark 6:8)

One unalterable fact that results from bankruptcy is that the proceeding stays on the debtor's credit report for ten years. Anyone the debtor approaches for credit will see that when they do a credit check, and many times it is enough to result in a turn down. There are ways to overcome that handicap. One thing that can be done is to get a prepaid credit card from the bank. Put in a given amount of money into a special account, have the bank issue a credit card up to that limit, and use it for purchases. This will help to re-establish a good credit record. Life after bankruptcy might also include getting a mortgage loan for extra cash for purchases. As long as the borrower is gainfully employed, this could give a person the "leg up" needed to begin the climb back to credibility where money is concerned.

Life after bankruptcy isn't altogether bleak. There are lenders that will look further than the legal proceeding to make their decisions on lending to someone who has taken that route. Car dealers especially, are often willing to work with post-bankruptcy customers because transportation is necessary for them to work. The drawback is, the interest will likely be a little higher than for the person who has a better credit record. Also, for things like clothing there are second-hand shops that carry some quality clothing for a fraction of what would be paid in the retail stores. Financial advice after bankruptcy will largely be a matter of taking a different view of the world. The kind of car one has been used to, and the clothes a person wears may have to be adjusted. Eating out may become a rarity, along with other sorts of entertainment.

If a person filed for relief because of job loss, financial advice after bankruptcy may come in the form of suggestions for classes that will prepare a person for a different line of work. These can be arranged without cost to the student under certain government and private organizations that work with various campuses, or student loans may be obtained that won't have to be paid back until the student is gainfully employed at whatever he has prepared himself for. Also included in advice after bankruptcy may be greater cooperation in the family. Where children are old enough to hold down part-time jobs, they can bring in needed cash. If a spouse has not been working, perhaps that will have to change. All of this will be temporary until the breadwinner is once again gainfully employed. Life after bankruptcy sometimes means difficult choices.

Americans have become so accustomed to living above their means through the use of credit that it's easy to understand how people wind up having to seek help through the court system. When debt reaches the level where no matter how hard the debtor works he cannot keep up with the burden, there is little alternative. Financial advice after bankruptcy can be an enlightened time if the debtor is successful in changing his attitude toward spending and saves more. This change in attitude, along with learning how to budget what is coming in constitutes the most important points stressed when someone offers advice. Finding a source for this kind of advice is not complicated. Attorneys are listed in most phone books, and of course there is the Internet search that is available to those having computers. No one has to face post-bankruptcy problems alone.

Personal Bankruptcy Laws

Personal bankruptcy laws were created to protect the consumer and creditors. It provides a way for individuals suffering from extreme financial debt to reconcile personal debts and start again. The laws also exist to return at least some money owed to creditors, who often take a total loss when debtors default. These laws fall under Title 11 of the United States Code and are handled through federal district courts. Individuals can file under Chapter 7, choosing to sell assets in order to pay what is owed, settling the debt in four months or under Chapter 13 where they propose a three to five year repayment plan, usually covering only a portion of the debt. Debtors can choose to declare some or all current debts. After either process is complete, the declared debts are wiped clean.

The history of personal bankruptcy laws dates back to biblical times, when Moses declared the "year of jubilee." Every seventh year, the Israelites were to give their land and animals a year of rest or a "sabbath." After seven sabbath years, or 49 years, the whole nation enjoyed a year of freedom from all debt: loans, borrowed possessions, and slavery. "And ye shall hallow the fiftieth year, and proclaim liberty throughout all the land unto all the inhabitants thereof: it shall be a jubile unto you; and ye shall return every man unto his possession, and ye shall return every man unto his family... And if thy brother be waxen poor, and fallen in decay with thee; then thou shalt relieve him: yea, though he be a stranger, or a sojourner; that he may live with thee." (Leviticus 25:10, 35) It was a year of redemption, a year of starting over.

Laws have changed quite a bit since then. Individuals can file under Chapter 7 again after six years and under Chapter 13 any time. Many critics of personal bankruptcy laws in the United States claim that filing bankruptcy has been too easy on debtors. Bankruptcy filings in the 1980s and 1990s increased 300%. By the year 2000, millions of dollars each year were being lost in bankruptcy proceedings. Many Americans file after a personal crisis - a medical problem, divorce, or natural disaster. But thousands fine themselves in financial despair simply by overspending. This has caused concerned for many lawmakers, who tried for years to amend bankruptcy law to protect it from abuse.

On October 17, 2005, these lawmakers found victory in the Bankruptcy Abuse Prevention and Consumer Protection Act. This amendment to personal bankruptcy laws makes it more difficult for individuals to file under Chapter 7. Unlike past years, where a judge was the sole determinant of whether someone could file, debtors now have to pass a two-part test to qualify for Chapter 7. Salary is compared to a state median income as determined by the Internal Revenue Service (IRS). If a person falls below that median, he or she may qualify. A debtor's income also must leave less than 25% available to pay for non-secured outstanding debt. The formula allows for exemptions for needed expenses such as housing and food. But the intent of the additions to personal bankruptcy laws is to only make Chapter 7 filings available to those who really need it and forces everyone else to file under Chapter 13 thereby keeping them responsible to repay at least a portion of personal debt. Natural disasters and some other personal hardships can be taken into consideration.

The new act also incorporates other steps to help prevent further financial problems. Within six months before filing, individuals must meet with a credit counselor for a 90-minute session in the district where the bankruptcy will be filed. Before the debt is discharged further counseling sessions or money management classes are required. All expenses must be paid by the debtor. Some argue that most people filing for bankruptcy can't afford such classes and that they create a further hardship. Fees for filing under personal bankruptcy laws (around $200 to $300) can be made in payments to help alleviate some of the financial pressure, but installments are limited and must be paid within 180 after filing. Fees may be waived if the debtor's income is less than 150% of the poverty line. However, attorney fees must be paid and since the induction of the law, rates have increased 75% to 100%.

The new personal bankruptcy laws also put greater restrictions on homestead exemptions. Most states allowed individuals to protect home equity from creditors. Now, the law gives freedom for the states to impose individual restrictions. In some states, the debtor has the option to choose a state exemption over a federal exemption or vice versa. However, a filer must have lived in that state for a minimum of two years for state exemptions to apply. Individuals who file under Chapter 7 still risk losing their homes in the liquidation. Filers under Chapter 13 can usually retain them as long as they continue to make mortgage payments on time during the length of proceedings as well as other debt obligations under the written agreement.

Individuals who file under Chapter 7 or Chapter 13 of the personal bankruptcy laws work with a court-appointed trustee who manages the financial transactions with creditors. This impartial trustee meets with creditors, asks questions of both parties to reach a mutual plan of action, and makes sure that each party holds up the contract. When the terms of the plan have been fulfilled, the debtor is released from all remaining obligation to the creditor and then has the opportunity to start again.

Chapter 13 Bankruptcy Attorney

The primary role of a Chapter 13 bankruptcy attorney is to represent debtors who have regular incomes from which to pay creditors in compliance with a court-ordered repayment plan. Also known as wage earners, these debtors choose to file Chapter 13 petitions, rather than liquidate assets through Chapter 7. Unlike a Chapter 7 petition in which a U.S. Trustee is appointed to collect, liquidate and distribute debtor assets to satisfy creditors; Chapter 13 allows individuals to develop a repayment plan which gradually relieves them of outstanding debts over a maximum 5-year period. Chapter 13 bankruptcy attorneys consult with wage earners to help them accurately identify and retain exempt assets, which should not be liquidated. In addition to easing the process of filing, attorneys stop garnishments, repossessions, and foreclosures and help wage earners keep personal property such as real estate holdings, automobiles, and employee paychecks. However, wage earners who owe federal, state, and local taxes; alimony; child support; and student loans are still liable for these debts, which cannot be discharged. Without the knowledge of proceedings, schedules and laws, debtors may run the risk of losing valuable assets to creditors. The debtor's attorney will thoroughly review the petition to ensure that non-exempt and exempt assets are handled properly. During the course of proceedings, the Chapter 13 bankruptcy attorney will become the wage earner's most valuable aide in resolving personal indebtedness, while satisfying federal requirements.

Personal bankruptcy lawyers provide expert legal counsel from the moment a consumer walks into the office for an initial consultation to the time that the case is discharged. A good lawyer will spend a considerable amount of time ensuring that the debtor's case is well prepared and well represented. Most individuals are at a complete loss when filing for consumer debt protection; but a competent, experienced attorney knows the ropes and can suggest legal ways to help debtors successfully file without breaking or compromising the law. Initially, personal bankruptcy lawyers will help debtors decide which chapter of the federal code best suits their situation. With slight variations, procedures for filing Chapter 7, 11, and 13 petitions are very similar. Personal bankruptcy lawyers assist debtors in filing official notices of bankruptcy to the court and creditors, represent debtors at creditor and confirmation hearings, and correspond with creditors regarding secured and unsecured claims. While consumers are not prohibited from preparing and filing petitions on their own, a qualified attorney can accurately interpret the law to the client and prevent debtors from making poor judgments and filing inaccurate reports, which may cost them dearly down the road.

Just having expert legal counsel serves to diffuse the pressure and emotional stress of filing. Once the debtor's lawyer serves notice to creditors, all debt collection tactics must cease by law. Creditors are prohibited from writing, calling, text-messaging, emailing, or contacting debtors in any way. From the moment creditors receive notice, all communication between the debtor and creditor must cease. The Chapter 13 bankruptcy attorney communicates directly with the creditor, or a legal representative, and can enforce cessation of collection efforts through the courts. The wage earner is then free to concentrate on working to pay off creditors.

Bankruptcy can be intimidating; and a debtor needs all the legal muscle possible to prepare and defend the legal right to consumer debt protection. Testifying in front of a room full of angry creditors is like going into a den of hungry lions with the debtor as the main course! Personal bankruptcy lawyers can skillfully shut the mouths of the "lions" and hopefully, walk away with a judgment in favor of the client. A qualified lawyer is a debtor's advocate in the courtroom, negotiating with creditors and legal representatives and pleading the debtor's case before the judge. While an attorney is an invaluable asset, the Bible speaks about an advocate far more invaluable than any earthly lawyer: "My little children, these things write I unto you, that ye sin not. And if any man sin, we have an advocate with the Father, Jesus Christ the righteous:" (I John 2:1). Whenever we fall short of God's expectations and sin, Jesus Christ pleads our case and reconciles us back to a right standing with God.

As a wage earner's advocate, the ultimate goal of a Chapter 13 bankruptcy attorney is to protect debtor assets, help devise an acceptable repayment plan, and eventually help reconcile the debtor to financial soundness. But remember: the Chapter 13 bankruptcy attorney is not working for free. The more time the lawyer takes with a debtor, the more it is going to cost. However, most attorneys charge a flat rate legal fee for consumer debt protection cases, which can usually be paid in installments. A familiar proverb says, "You can give a man a fish and he'll eat today, or teach a man to fish and he'll eat for a lifetime." Lawyers are there to guide and counsel debtors on supplying the courts accurate, timely and complete information; but they cannot be expected to hold debtors by the hand 24/7, unless they are willing to pay. In addition, new reforms hold lawyers accountable for inaccuracies and false information on debtor petitions. Reforms also sanction attorneys if Chapter 13 filers default on repayment plans, after assuring the court of an ability to pay. In order for cases to become satisfactorily discharged, debtors and personal bankruptcy lawyers must build a relationship of mutual trust, cooperation and honesty. Debtors must also comply with federal mandates to enroll in approved financial management courses before cases can be officially discharged. Chapter 13 bankruptcy attorneys and clients play important roles in submitting accurate, timely and truthful petitions which comply with U.S. bankruptcy code, satisfy creditors and ultimately, provide debt relief.

Personal Bankruptcy Lawyers

The primary role of personal bankruptcy lawyers is to advise and represent debtors who decide to file petitions for insolvency. While some claim that debtors can handle filing detailed financial data themselves, lawyers are hired to ensure that petitions are not only filed correctly, but also that petitioners are afforded every right available under U.S. Bankruptcy Court law. Most consumers are unfamiliar with legal proceedings and court-ordered judgments; and many would be at a loss in the courtroom. Whether petitioners choose to file Chapter 7 liquidation cases, Chapter 11 business restructuring plans, or Chapter 13 petitions to repay creditors from wages earned, they must meet certain criteria. Without an understanding of legal proceedings and applications, debtors could easily wind up losing valuable assets, such as cars, residences, and business and personal property to creditors. While the law does not prohibit debtors from filing consumer debt protection on their own, personal bankruptcy lawyers are adept at interpreting the law to clients and can help prevent debtors from making poor judgments and filing inaccurate reports, which may work against them in a courtroom full of creditors.

Filing bankruptcy is not a do-it-yourself project. Just compiling listings of assets and liabilities can be a daunting task for the average consumer. Personal bankruptcy lawyers can provide expert legal counsel to determine whether a debtor should consider filing for consumer debt protection or not. Sometimes cash-strapped consumers see no way to circumvent repossessions and harassment from bill collectors without taking their case to court. But a reputable attorney should give debtors some viable options and advise for or against taking the desperate measures preparing and filing petitions entails. The attorney works for a fee, but he or she will also work on behalf of the client, poring over financial information and assessing whether the client has strong supportive evidence to pass the muster of the court. While personal bankruptcy lawyers are debtors' advocates, God has provided an Advocate far more powerful than any earthly lawyer in the person of His Son, Jesus Christ. "My little children, these things write I unto you, that ye sin not. And if any man sin, we have an advocate with the Father, Jesus Christ the righteous. And He is the propitiation of our sins: and not for ours only, but also for the sins of the whole world" (1 John 2:1-2).

Astute personal bankruptcy lawyers' first consideration will be to discuss which type of filing best suits client needs. Chapter 7 liquidation petitions require a court-ordered sale of assets to amass sufficient monies to pay off creditors. Consumers who own real property, stocks and bonds, securities, vehicles, or equipment which can be converted into cash to repay delinquent accounts are most likely to choose Chapter 7. A U.S. Bankruptcy Trustee is appointed to collect, liquidate, and dispense debtor assets to satisfy secured and unsecured creditor claims. For debtors who don't have many assets, but work a 9-to-5 job, personal bankruptcy lawyers will usually advise filing Chapter 13, or a wage earner petition. Chapter 13 wage earners have a regular income from which to pay creditors in compliance with a court-ordered repayment plan. Legal counselors will advise clients about formulating a plan which demonstrates to the court a commitment to restructure outstanding debt over a three to five year term. Once the court and creditors accept a wage earner's plan, debtors filing Chapter 13 petitions are subject to court-ordered payments dispensed by U.S. trustees or administrators. For up to five years after filing, debtors should refrain from incurring more liability. Trustees are there to help monitor the debtor's finances and ensure that the court's decisions are upheld.

Meanwhile, personal bankruptcy lawyers are there to help protect the interests of the debtor and to ensure that the court does not infringe on the debtor's legal rights, such as issuing orders that monies used for the client's subsistence become part of disposable income. In addition to helping debtors determine the most appropriate petition to file, attorneys also assist debtors with filing public notices of bankruptcy; provide expert legal representation at creditor and confirmation hearings; communicate and correspond with creditors regarding secured and unsecured claims, and resolve discrepancies between debtors, creditors and the court, which can arise any time personal finance is an issue. Attorneys can also stop garnishments, repossessions, and foreclosures and help petitioners keep exempt property, such as real estate holdings used as personal residences, automobiles used for work, and spousal property. Once lawyers file and serve a notice of bankruptcy to the debtor's creditors, all collection tactics and harassment must cease.

Having personal bankruptcy lawyers relieves debtors of the stress and anxiety associated with filing. Petitioning for consumer debt protection can be exhausting and intimidating; and a debtor needs a powerful ally to battle hostile creditors and defend a legal right to debt protection. But simply having professional legal representation enables debtors to breathe a little easier, in spite of an overwhelming money woes. The case is presented before the court with precision and with an anticipation that the court system will render fair and equitable judgment on behalf of both the petitioner and the creditors. Attorneys have the client's best interests at heart and are ever present to assure that assets are protected and that creditors and debtors are both treated fairly. An intimidating process like filing for insolvency requires experience, knowledge, wisdom and an astute application of jurisprudence. Debtors who can afford to hire competent legal assistance to present consumer debt protection cases to the U.S. Bankruptcy Court should be appreciative and thankful for a system which protects and defends the legal rights of its citizenry, in spite of an inability to maintain financial solvency.

Personal Loan After Bankruptcy

Getting personal loans after bankruptcy is certainly possible, but frankly it has to be likened to hitting one's head with a hammer to make an ache go away. Yet there are very imprudent people who think drinking a gallon of water ten minutes after almost drowning is a funny joke and will scoff at warnings to stay as far as possible away from a loan company and credit card. The other side of the coin is that there are companies that will sell triple decker cheeseburgers to people over four hundred pounds and lend Mt. Everest high interest loans to those who shouldn't be borrowing a shovel from a next door neighbor. But the world can be a crazy place and everyone seems to have a reason for doing that they do. So getting loans after bankruptcy is a bad idea for most people in that position but the deed can be done.

If a person yells the word bankruptcy in a room full of bankers, at least seven of them will have coronaries within a few minutes. It is the worst of the worst financial situations, not because it cannot be overcome eventually, but because the legal proceeding has a shelf life of ten years. That is a lot of time for something rotten to remain hanging around someone's neck. And painfully, the effect of such a financial smell is known by all who loan money to those afflicted with the odor. People can argue all day long if it is fair for those who have gone through such a devastating crisis to have the large "B" branded on FICO reports for ten years. Good, honest and hard-working folks have had to go through this ordeal, some through no fault of themselves and others because of poor judgment. But in both cases, getting personal loans after bankruptcy can be tricky.

In the case of chapter seven bankruptcies, the idea of getting a loan after the proceeding is a little strange. Chapter seven legal proceedings are borrowers who are finally captured by the creditors' posse and put their hands up in surrender. Despite what the TV lawyers say, chapter seven means that most of one's possessions, if they are extensive, are going bye-bye. In each state, the list of items that a person filing for relief can keep from the auction block is varied. In some states a person can keep saddles and horses, personal items and a four wheeler for each family member while in another state a television can get auctioned but a stove cannot. And a person's house, or at least most of its equity is fair game in most states. The point is that personal loans after bankruptcy are basically going to be unsecured loans because there is little or no collateral to offer.

In the world of personal loans after bankruptcy, the unsecured is the proverbial redheaded step-child. This kind of loan is the most expensive to get because if the loan defaults, the lender has nothing to haul away in a truck for repossession. This loan holds all kinds of risks for the lender and consequently the interest rates are higher than Kilimanjaro. Yet this is basically the only kind of loan besides a car loan that these wounded borrowers can get. To add insult to injury, a finance company will probably be the only entity willing to make a commitment to personal loans after bankruptcy and their prices to borrow money might rival the GNP of San Marino. This kind of loan truly is the last thing in the world that filer's for bankruptcy need.

The other type of personal bankruptcy available for those who find themselves surrounded by the posse is chapter thirteen. With this legal proceeding, those who are throwing up their hands in debt surrender are looking for a way to repay debt on their terms and not the lenders. In other words, longer payback schedules and less interest on the loans are the usual foundations for this legal filing. In many ways, chapter thirteen bankruptcy is very much like most debt counseling programs, which provide the lower interest side, making possible the payback of credit loans within five years if the debtor sticks to the program. But in debt counseling and in chapter thirteen, the debtor cannot open another loan account or the program is ended or the filing converts to chapter seven. It's ironic that a chapter seven filer may be eligible for personal loans after bankruptcy more quickly than the filers of chapter 13.

Actually, irony runs rich when talking about personal loans after bankruptcy. The very thing that was the downfall of most people filing for debt relief is the thing that can actually help them get their good name back over time. Credit reports will have the big scarlet "B" on the information, but small, unsecured loans that are faithfully paid back incrementally on time each month begin the restore the health and vitality of a very anemic financial condition. The question about personal loans after bankruptcy being a hammer to kill a headache really comes down to does the one holding the hammer know exactly where to hit in order to stop the pounding. And can a person who has probably failed for a long time to handle credit properly suddenly change his ways and start being responsible? The great prophet Jeremiah once asked, "Can the Ethiopian change his skin or the leopard his spots?" (Jeremiah 13:23a) The rhetorical answer is no, but with God all things are possible.

Private Student Loan Bankruptcy

Rather than face private student loan bankruptcy, students should take time to research the obligations of borrowing and make use of any federal loans which may be available. In the flurry of paperwork involved in applying for colleges and other institutions of higher learning, there is sometimes little information given regarding preparing for the financial aspects of higher education. Students and parents need to take the responsibility for discovering the sources of scholarships, loans and other forms of financial aid. Guidance offices are usually willing to help, yet it may be necessary for the student or parent to initiate the quest for information.

Two sources of loans are available: federal or private loans. Federal loans are provided by the government to students for educational expenses. Find out one's eligibility for these funds by completing the Free Application for Federal Student Aid (FAFSA). Private educational loans are also available. Many students, even if they are eligible for grants, scholarships and federal loans, need additional funding and turn to private sources as well as government funding. Be sure to exhaust the federal solutions first, as these may have additional benefits, such as the right to deferment, forbearance, or cancellation under certain circumstances, and the establishment of affordable repayment plans to pay off the debt. Otherwise, one may find oneself in private student loan bankruptcy.

Deferment of federal student loans can be an important strategy in managing educational expenses and preventing private student loan bankruptcy. This process allows borrowers to postpone repayment without incurring interest costs. Interest will accrue on an unsubsidized loan, but the lender can decide to postpone interest charges until after the deferment period is over. This process is known as capitalization. If the student is able to pay the interest costs, it is best to do so even if this is not immediately required. This will help to keep interest costs lower than if one waits to repay such costs until they are due.

Other benefits of federal student loans are recent programs which have been devised to help students manage educational costs and avoid private student loan bankruptcy. One of these is Income-Based Repayment (IBR). This program will help by providing loan caps based on income and family size. This should work out to payments of less than 10% of income for most borrowers. Those with lower earnings might have smaller payments. The IBR option has certain debt-to-income ratio requirements in order to meet the qualifications for a reduced payment. IBR will also forgive debts remaining after 25 years of qualifying payments. Federal loans made to students, but not to their parents, are the only types of loans eligible for this program.

The US Department of Education also expects to finalize details of a public service loan forgiveness program by November of 2008. Under this program, if the student is a teacher or works in government service or at a nonprofit 501(c)(3) organization, he or she may qualify for loan forgiveness after 10 years of eligible payments and employment. Those employed by federal, state, local or tribal governments are eligible and employers include those who provide various public services (childcare, health services, law and library services, to name a few). Note that qualifying payments need not be in consecutive months, as long as they total 10 years (120 monthly payments). Also, teachers may qualify for a whole year's service by completing annual contracts which are at least eight months long. Both of these programs are still being finalized, so check the Department of Education website for complete details. Borrowers who are trying to avoid private student loan bankruptcy may have to apply for a federal loan in order to be eligible.

Many students find that they also require private loans to make educational training possible. If students find themselves in situations where they are considering private student loan bankruptcy procedures, they should realize that this is seldom the best answer to financial problems. Student loans are generally not excused because of bankruptcy. In the rare case that this may be possible, the borrower must show the court that payment of this debt will impose undue hardship on the individual and his or her dependents. Several conditions must be met. It must be shown that the borrower would not be able to provide even a minimal standard of living, that additional conditions exist which would make it unlikely that the financial situation could be resolved (such as ongoing medical disabilities which preclude returning to work), and that the debtor has attempted to make efforts to repay the loans (possibly by requesting that a repayment schedule which reflects current realities be set up by the lender).

Courts can be somewhat arbitrary about their decisions. Borrowers who claim to have a low-paying job may be instructed to seek a better one in order to be able to make payments. Those with alcoholism or mental health problems are not automatically qualified for private student loan bankruptcy. Some courts are more lenient, and if successful, the loans may be cancelled. However, remember that bankruptcy procedures will have costs of their own, and having a private student loan bankruptcy on one's record can affect his or her ability to borrow funds for other purposes. The best solution to the dilemma is to speak with the lender about setting up a reasonable repayment plan. As Matthew 5:25 advises, Agree with thine adversary quickly, whiles thou art in the way with him; lest at any time the adversary deliver thee to the judge.... At times, lenders are willing to defer payments for a while until a financial situation improves. Consolidation of loans should be carefully considered, especially if one is going from a federal loan program to a private lender. Borrowers may only get one chance to consolidate, and this may negate certain safeguards and privileges which are found in the federal loan system.

Rebuilding Credit After Bankruptcy

Rebuilding credit after bankruptcy is like a winning a spouse's trust after an incident of infidelity: it takes time to build confidence in the relationship again. And it takes time for creditors to rebuild confidence in consumers who have violated promises to pay. Like an injured spouse, creditors need to see a consistent and faithful payment history to place trust in wayward consumers again. In a debt-deferred society, it's easy to get caught up in the habit of overspending. The lure of shopping malls and sumptuous merchandise is simply too hard to resist. And the knowledge that with one swipe of a little 2x3-inch piece of plastic, cardholders can have almost anything they want is simply mind-boggling. Not to mention the fact that most charge card companies only request minimal monthly payments. Countless consumers get seduced into charge card abuse every year and the road back to respectability can be long and arduous.

The best way of rebuilding credit after bankruptcy and cleaning up a blemished record is to re-establish a good payment history as quickly as possible. Consumers may choose to work with a money management consultant or find a good self-help book on debt reduction at the local library. Debt recovery gurus also recommend obtaining a secured charge card and making and paying for purchases on time. Similar in appearance to unsecured credit cards available after bankruptcy, a secured card is a major bank charge card. The difference is that a secured card is backed by the consumer's funds, which are regularly deposited into a savings account accessible to the card company. Monies are withdrawn from the consumer's savings as the card is swiped for purchases. The advantage of using a secured charge card is the consumer's spending limit is confined to cash available in savings, but can be increased as deposits are made. In addition, issuing companies monitor secured card activities the same way they monitor those of unsecured cards. Through regularly and consistently paying off secured charge card debt, individuals who have gone through consumer debt protection proceedings can begin re-establishing borrowing power.

Once a solid payment history is established with secured funds, most financial institutions will make unsecured credit cards available after bankruptcy to faithful consumers. Debtors shouldn't be surprised to see multiple offers from major card companies pouring in; the word spreads fast when former debtors begin to regain credibility. The Bible speaks about restoration as a reward for faithfulness. In Isaiah 57:18, God promised to restore Israel if they repented from idolatry -- "I have seen his ways, and will heal him: I will lead him also, and restore comforts unto him and to his mourners." Debtors who turn from charge card abuse and excessive spending place themselves in a position to reap the rewards of responsible financial management. Comforts they enjoyed prior to bankruptcy can be restored, as financial burdens are eventually lifted.

When lenders make unsecured credit cards available after bankruptcy, consumers should use moderation to avoid being tempted back into indebtedness. Just remembering the agony of overwhelming debt should be enough to bring an individual back to the realization that conservative consumerism is the best course to take. Consumer counseling agencies recommend establishing a good track record of timely, consistent payments over a minimum period of two years. They assert that lending institutions may extend loans to debtors who have filed Chapter 7, 11 and 13 bankruptcy petitions if financial reports indicate renewed faithfulness. Unsecured credit cards available after bankruptcy are a token of trust extended to responsible consumers.

Another method of rebuilding credit after bankruptcy is to purchase a vehicle at a "buy here, pay here" used car lot. Most of them do not penalize consumers for bad debts and bankruptcies. No, it's not a major auto dealership, and the interest rates may be higher, but individuals can use this type of financing to re-establish a sound car payment history. After bankruptcy, consumers should also ensure that current reports accurately reflect discharged accounts. Go online and obtain free reports and scores from the three major reporting bureaus and review them carefully. Contact them personally to ensure that any discrepancies, such as outdated filings and settled accounts are properly recorded. Timely payments with unsecured cards made available after bankruptcy also contribute to rebuilding positive credit histories. Rebuilding credit after bankruptcy sometimes requires "piggy-backing" off of someone else's good credit. Financial consultants recommend asking a family member or friend to co-sign on a small bank loan and paying it off as quickly as possible. But remember: co-signers are equally liable for unpaid bills; to avoid damaging a co-signer's solvency, faithfully honor loan committments. Financing furniture and appliances on a 90-day-same-as-cash basis also affords an opportunity to demonstrate trustworthiness. Store records will substantiate consistent payments and can be used to validate a former debtor's renewed reliability.

Once good credit has been re-established, take it easy. Consumers will have to take a good hard look at how they've managed money in the past and do away with poor practices before rebuilding credit after bankruptcy. Use unsecured credit cards available after bankruptcy sparingly. Instead of spending money irresponsibly, establish a budget and stick to it. Make entertainment a treat, instead of a routine and plan family nights at home with popcorn and rented videos, instead of going to a movie. Join a warehouse shopping club and buy larger quantities of food, meats and household items, re-packaging them for later use at huge savings. Join a Christmas club plan to save year round for holiday shopping and avoid overusing charge cards. Once credit-worthiness has been restored, be determined not to fall under the seductive spell of impulsive buying again.

Remove Bankruptcy After 7 Years

Major credit reporting agencies usually remove bankruptcy after 7 years for Chapter 13 debtors. Wage earners who have faithfully complied with court-ordered repayment plans can rest assured that a once blemished credit report will no longer hinder efforts to seek employment or re-establish buying power. A Chapter 13 proceeding automatically vanishes from the debtor's report 7 years from the date of filing, as if it never existed. The formerly bankrupt consumer is free to apply for future financing without fear of disclosure of the previous proceeding. U.S. Bankruptcy Courts may have derived the seventh year Chapter 13 debtor's release from the Old Testament of the Bible. According to Deuteronomy 15:1-2, "At the end of every seven years thou shalt make a release. And this is the manner of the release: Every creditor that lendeth ought unto his neighbor shall release it: he shall not exact it of his neighbor, or of his brother; because it is called the Lord's release." Anyone who has paid creditors for three to five years through a repayment plan deserves to be released from further financial liability and boost credit scores after bankruptcy.

While filing has its negative connotations, Chapter 13 debtors have an opportunity to start afresh due to efforts to honor responsibility to creditors. Many Chapter 13 debtors live on a strict budget for several years in order to make monthly payments, sometimes enduring a lesser standard of living. A Chapter 13 is discharged when the last payment has been made and debtors can certify participation in an approved financial management course provided by a reputable consumer financial counseling agency.

When credit reporting agencies remove Chapter 13 filings, credit scores after bankruptcy usually rise. To a prospective lender, an individual's score is evidence of credit-worthiness. Scores above 600 indicate financial stability and a good history of repayment. Removing negative information and establishing a consistent payment history can boost scores overnight. Debtors should closely monitor reports after seven years have lapsed to ensure that reporting agencies have removed Chapter 13 discharges. And don't be lured off by companies which promise to remove insolvency before seven years for a fee; these kinds of offers are illegal. Like a scab on a nasty sore, a Chapter 13 proceeding will fall off by itself when it has had sufficient time to heal. If reporting agencies fail to remove bankruptcy after 7 years, debtors have legal recourse. Contact the three major agencies for free reports. Review all entries and determine if detrimental accounts which should have fallen off of the report are still listed. Call the agency which still shows negative entries and request that the Chapter 13 and all of its accompanying debts and judgments be expunged from databanks and reports. While one call should do the trick, if it is necessary to make repeated calls, do so. A debtor's future financial reputation, which negatively or positively impacts consumer scores, is at stake.

Good credit scores after bankruptcy are like a debtor's calling card. They announce to prospective lenders that the former Chapter 13 petitioner is a responsible bill payer who can be fully trusted to repay loans. Consumers may attempt to justify themselves to lenders in letters, emails and phone calls; but the credit score speaks volumes about someone's ability to follow through on promises; and it is right there in black and white. Consumer scores are derived from credit reports and can range from 300 to 900. The median credit score in the U.S. is 675. Scores are based on a proprietary formula (FICO) which takes into account a consumer's payment history, outstanding debts, and the types of current charge accounts.

Scores also reflect the number and frequency of report inquiries. These three-digit scores open doors to new debt-free lives, new homes, new cars, college education, retirement homes, and almost anything a consumer can buy. A good credit score after bankruptcy rebuilds and reverses most of the negative impact of insolvency and puts the debtor on firm financial footing again. When reporting agencies remove bankruptcy after 7 years, the key is to maintain a clean record. While some Chapter 13 debtors may want to go out and celebrate their newly found debt freedom, caution should be exercised. The same financial mismanagement practices that caused debtors to file bankruptcy seven years ago are prone to entangle them again if vigilance is not exercised. Maintain the same standard of living experienced while honoring the repayment plan. Don't be tempted to go out and spend irresponsibly just because credit scores after bankruptcy have gone up. Be frugal, be watchful and be wise about incurring more debt than one's budget can safely handle. And be careful about applying for financing too frequently. Consumer scores reflect the number of inquiries on a report; a large number can quickly lower credit scores which have been improved.

When reporting agencies remove bankruptcy after 7 years, deserving debtors can once again experience the liberty that comes with sound consumer money management. Chapter 13 petitioners who diligently adhere to a court-ordered repayment plan have a second chance to rebuild their lives and boost credit scores after bankruptcy. A word of caution: Debtors who fail to complete repayment plans within the three- to five-year time frame forfeit the right to debt release, unless they are deemed by the court unable to make payment due to illness or chronic unemployment. However, the seven-year debt release mandated by U.S. Bankruptcy Law is a testament to the fairness and impartiality of the American court system which provides debt relief for most consumers ridden with financial woes. Chapter 13 bankruptcy is not a quick fix for indebtedness, but a long range resolution toward financial freedom.

Small Business Bankruptcies

Before filing for a small business bankruptcy, financial experts advise the company's owners to consult with an attorney who specializes in this area. Federal laws can change and, of course, bankruptcy laws vary from one state to another. A competent attorney will be knowledgeable on changes to the Bankruptcy Code and provisions that are specific to the state where the debtors are conducting business. The attorney will also be able to advise the owners on which of the six types of bankruptcies will offer them the most appropriate protection given the specifics of their situation. While individuals usually file under Chapters 7 or 13, a small business bankruptcy may be filed under Chapters 7, 11, or 13. The decision of which chapter offers the most appropriate protection depends upon such factors as how the company is structured and the circumstances of the indebtedness, Another type, Chapter 12, is specifically designed for family farmers and family fishermen who have regular income from these ventures. Scriptures give this promise from God: "I will instruct thee and teach thee in the way which thou shalt go: I will guide thee with mine eye" (Psalm 32:8). Oftentimes that promise is fulfilled by seeking out competent resources and relevant information.

A Chapter 7 small business bankruptcy is an option for sole proprietorships, partnerships, limited liability companies (LLCs), and corporations. Most partnerships, LLCs, and corporations are considered as separate legal entities. This means that the owners' personal assets are protected from the company's creditors. However, a trustee has the authority to access the personal assets of the owners of a partnership if the company assets do not satisfy the demands of all the creditors. The sole proprietor's personal assets are not protected at all as the company is seen as an extension of the owner and not a separate entity. A business may opt for Chapter 7 when liquidating the company's assets, not reorganization, is the goal. There is no future for the business, no substantial assets, and overwhelming debt. The attorney will provide worksheets for the owners to complete and will use that information to file the small business bankruptcy petition and create the necessary schedules of financial information. The act of filing the petition with the court places an automatic stay on the collection efforts of the creditors. Once a trustee is appointed, a 341 meeting will be held with the creditors. (The name comes from Section 341 of the Code and is sometimes referred to as the first meeting of the creditors.) At this meeting, the owners are under oath to answer all questions put to them by the trustee and/or the creditors. In the Chapter 7 process, the trustee gathers and sells the business assets. He then distributes the proceeds to the creditors according to the agreed-upon plan.

In many ways, a Chapter 13 small business bankruptcy is similar to a Chapter 7 except that a Chapter 13 is not designed for LLCs or corporations or for most partnerships. Though individuals or married couples can file for personal bankruptcies under Chapters 7 or 13, as far as a business is concerned, this type is reserved for sole proprietorships. As in Chapter 7, a petition is filed by sole proprietor, the required documents are completed, a trustee is appointed, and a 341 meeting is held. The sole proprietor is under oath to answer all questions, but few creditors may actually participate in these proceedings. In this type of small business bankruptcy, the sole proprietor creates a repayment plan that pays all debt within three to five years. As part of creating the plan, the sole proprietor may renegotiate with the creditors to lessen the amount of the debt. As long as the payment plan complies with the Code, the creditors may not even vote on the payment plan. The trustee oversees the process by receiving a monthly payment from the sole proprietor which is then disbursed to the creditors according to the agreed upon plan. The sole proprietor may, if the outlook is favorable, stay in business and work to improve the company's financial status.

A Chapter 11 small business bankruptcy is the most complicated as the goal is to reorganize the company, not to liquidate the assets. An attorney is most definitely needed to navigate the complexities of this process which is most often used by financially-troubled partnerships, LLCs, and corporations. Usually a trustee is not appointed, but the company becomes what is known as a debtor in possession. The owners or managers retain the assets and continue operating the business. At the 341 meeting, a creditor's committee may be appointed which is made up of the seven largest unsecured creditors. This committee helps the owners or managers with the reorganization plan. The creditors are divided into classes and each class gets to vote on the reorganization plan. Of course, all this has to be done while adhering closely to the Code. Because of the complexities of the approving the plan, the process may take one to two years. Once everything is confirmed, the company's secured debt payments may be spread out over a twenty to thirty year period. These are creditors whose loans are secured by collateral, a tangible asset that can be repossessed if the debt isn't paid. A small business bankruptcy is never pleasant, but the process can be beneficial to companies that need to be rescued from overwhelming debt or can benefit from being given a second chance to succeed.

Small Business Filing Bankruptcy

Small business bankruptcy may be the most responsible way to alleviate financial debt without losing everything. Avoiding the need to file starts all the way back at developing the original business plan. Understanding what types of costs are involved with running a successful company and at what point assistance is required. Some of the most successful businesses need to file for bankruptcy at some point, though this action is never desired. The damage done to personal and commerce credit can effect a persons whole life if partnerships and assets are not appointed correctly. Speaking with a trade planner or lawyer when developing the business can ensure that the right provisions are made to ensure the best route even in the event of filing. Other options include reorganization and liquidation.

Get creative in any way to avoid financial ruin by selling part of the company as another share, liquidating merchandise, or downsizing employees or locations. Exploring all measures for saving money before small business bankruptcy becomes a reality is optimal. Keeping strong financial records will indicate any problems even before the threat of losing everything to the bank. In some cases other similar businesses are in the same position and a merge of companies may solve the problem. This action may cut expenses in half and increase market population. Though many companies bounce back after small business filing bankruptcy, this usually occurs in companies that have other avenues of income that can be used to bounce back.

Understanding the different ways to file is crucial to the success of any company and personal reputation. There are three types of bankruptcy filing: Chapter 7, Chapter 11, and Chapter 13. Chapter 7 is best when the corporation has no future, substantial assets, or the debts are unmanageable. Corporations are not eligible for this type of small business filing bankruptcy. If this is the best route, the educating oneself on the types of debts qualified as dischargeable will aid in determining what debts to pay on. Unqualified debts include: taxes, student loans, debts incurred by fraud, and child support. Though some of these provisions are not related to the small company itself, a person may feel they can be rolled into the business filing. Seeking professional legal advice on how to prepare for small business bankruptcy saves money in the long run, although this statement only applies when an honest and experienced lawyer is hired.

The chapter 13 route basically sets up a repayment plan similar to that of a debt consolidator, however unlike a debt consolidator chapter 13 can only take certain debts and it is a mandated process by the bank or other creditors. In most cases chapter 13 is used for the debts that chapter 7 small business bankruptcy doesnt cover. Keeping as many debts as possible with realistic plans for repayment aids in sustaining and building credit. Liquidated or unsecured debts another reason for small business filing bankruptcy under chapter 13. Relief on taxes may be an option based on the kind of tax, age of the tax, whether a return was filed, and the type of small business bankruptcy was filed. Careful planning and research will ensure proper methods for successful small business filing bankruptcy.

When it is determined that filing is the only choice and the type is chosen, deciding who should file might be the harder decision. If the owner files on his own then some advantages may occur such as saving money on attorney and accountant fees, keep secret financial information, and find loopholes for legally selling assets. The disadvantages include the restriction of hiring new employees, cooperation from creditors, and increasing the likelihood of mismanaged settlements with creditors. Finding other companies that have filed and learning as much as possible from them is ideal, however not many small companies intend on publicizing the news. In that case, reading as many news stories and magazines articles from credible authors becomes the only way of education. Realizing that every company is different and that the only way to know for sure it to find a good lawyer and accountant to aid in the process. Most people find it shocking that personal and company debts are tied together even though all industry teachings instruct separating the expenses. Likewise, continuing self employment efforts after bankruptcy should be discussed with the attorney in order to ensure legal practices before and after small business filing bankruptcy.

The bottom line is to avoid having to file at all costs. Living on a cash only system with no loans, liens, or owing of any kind accomplishes a debt-free company. In most cases people go into debt with hopes that having a bigger copier, bigger office space, nicer desk, better advertising, or more employees will bring more profit, but the economy is an unsure thing especially when new products are introduced thus creating an instable platform for debt repayment. With this information, a person had better have a plan for payment even if the economy goes south. And it came to pass about this time, that [Joseph] went into the house to do his business; and [there was] none of the men of the house there within. (Genesis 39:11) This may include a savings plan every month for payment on an item during slow months or renting the same item until the amount is made to purchase outright. Speaking with a commerce planner will help determine a specific and successful corporation plans for any company.

Stop Mortgage Foreclosure

Distressed homeowners in default can stop mortgage foreclosure by using several methods. When homeowners get behind in loan payments, lien holders can and do repossess properties. However, owners can take steps to stop legal repossession efforts before their home is sold on the courthouse steps. Most banks will work with borrowers to stop mortgage foreclosure because lending institutions don't want the house, they simply want to get paid. Banks, credit unions, and mortgage companies are not necessarily in the business of buying and selling houses; but their goal is to make money from interest charged on loans over 15, 20, or 30 years. In the case of owner default and subsequent auction or sale of repossessed properties, the homeowner will not be the only loser. Foreclosures damage the lender's bottom line and adversely affect the local, state and national economy.

The United States housing slump has spawned a record number of foreclosures that not only hurt homeowners, but lenders who cannot always recoup losses. When owners and lenders fail to stop mortgage foreclosure, renters can also be forced to vacate leased properties with very little notice. Evicted tenants can feel a pinch in the pocketbook, since relocating usually means coming up with first and last month's rents, plus a large deposit. While federal and state governments work to stop mortgage foreclosure, if the trend continues, losses to homeowners and lenders could threaten to derail the American economy.

In the real estate market, foreclosure has become a four-letter word. Banks really don't want to repossess a borrower's home and be forced to make properties marketable enough to sell at a profit and recoup loan balances. A lagging economy could cause foreclosed property to stay on the market for years, while lenders lose principle and interest payments. According to statistics, a repossessed unit can cost lenders as much as $50,000 in processing fees and costs to market and liquidate. Additionally, foreclosed homes cause area property values to go down, as vacant lots are left unkempt, rodents multiply and vandalism increases. With these factors in mind, banks and lending institutions are willing to go the last mile with homeowners who sincerely want to save their homesteads. There are several ways to stop mortgage foreclosure: (1) a loan workout, (2) refinancing with a second mortgage, and (3) consumer debt protection through filing Chapters 7 or 13 bankruptcy petitions. Owners should seek counsel from financial management professionals before deciding on either of these options. "Where no counsel is, the people fall: but in the multitude of counselors there is safety" (Proverbs 11:14).

If owners default on payments and fall in arrears, usually after three months, banks can demand repossession of the house, full payment of the remaining mortgage balance, or a lump sum to bring payments current. Homeowners may be able to propose a loan workout to stop mortgage foreclosure, save the equity, and preserve creditworthiness. The terms of a workout depend largely on how far the bank is willing to go to help homeowners. Lenders may propose getting a second mortgage to pay off delinquent loans and restructure payments. Some may even place past due payments at the end of the contract and consent to taking less than the amount in arrears.

To stop mortgage foreclosure, refinancing with a second loan buys homeowners more time. A secondary loan financed at a lower interest rate makes the first note disappear; but owners will have to qualify for the new mortgage either with another lender or the current one. Another strategy for desperate owners in default is to attempt to sell the property to a buyer with excellent credit and plenty of cash. Distressed sellers facing foreclosure may be willing to accept a cash down payment to get properties out of arrears and off of the chopping block; that move alone can save the owner's credit. Investors who purchase distressed homes may offer sellers an opportunity to stay in the home as renters with reduced payments. The advantage to the seller is obvious: consumer credit reports remain unmarred by foreclosure; the option to stay in the home alleviates the pressure, expense, and stigma of relocating; and reduced payments as tenants lift the responsibilities from the poor owner's shoulders and onto the new owner/landlord's.

As a last resort to stop mortgage foreclosure, owners can file a Chapter 7 or a Chapter 13 consumer debt protection petition. A Chapter 7 liquidation bankruptcy allows owners a chance to pay creditors through a court-ordered sale, or liquidation of assets. Bankruptcy court trustees or administrators then dispense debtor assets to pay secured or unsecured creditor claims. Distressed homeowners who file Chapter 13 petitions consent to a three- to five-year repayment plan which restructures debt and makes monthly installments to creditors. The advantage of both filings is that homeowners get to remain in the home under the terms of the case.

A distinct disadvantage to filing bankruptcy is that the owner's credit report will remain tarnished for at least seven to a maximum of ten years. Should the owner ever decide to apply for financing or perhaps, seek new employment, the decision to file bankruptcy could come back to haunt. Prime lenders and future employers sometimes disdain high-risk borrowers with marred payment histories. Before homeowners default on mortgage payments, it would be wise to discuss personal financial issues with lien holders to work out an amenable plan. While many owners fear addressing an inability to honor financial obligations, the problem just won't vanish away. Addressing concerns early enough to work out agreeable remedies can save a lot of heartache and a beloved home.

Stopping Foreclosure Process

Help to prevent foreclosure may include learning to budget, working closely with the lenders, and being honest with everyone involved. Once it is determined that payment of a mortgage has become a problem contact the lender in order to be proactive instead of reactive. This action shows the lender responsibility of the borrower, thus creating more opportunities for the borrower. Understanding how to budget money in a way that makes money always available for the mortgage payment is necessary for optimal credibility and aids in stopping foreclosure process.

Budgeting necessary finances in order to avoid overdraft fees, late fees, and credit bureaus can dramatically change the available money for paying the mortgage. In some cases simply responsibly organizing finances can free up enough money to eliminate the need to help prevent foreclosure. Some banks or credit unions will even pay bills for a person out of their account eliminating the chance of forgetting to pay. Incurring interest on credit cards, mortgages, and loans can account for a large amount of monthly available money. Consolidation of these debts and getting on track with money management aids in stopping foreclosure process.

Refinancing for a better rate, pay off other bills with higher interest rates, or to lower the payment by extending the life of the loan are all ways that help to prevent foreclosure. Paying the lowest amount of interest on any item is optimal. This may only be accomplished by refinancing. Though the mortgage company is the one calling demanding money, usually other expenses create the urgency for payment. Some budget planning guides make a person physically write out debts and how to eliminate them in order to free up money to help prevent foreclosure. This method not only brings reality to the situation, but creates an end to financial madness. In most cases the house payment is the most important, however paying off other debts create more flexibility for life to happen. And every one [that was] in distress, and every one that [was] in debt, and every one [that was] discontented, gathered themselves unto him; and he became a captain over them: and there were with him about four hundred men. (1 Samuel 22:2)

Rearranging the current lifestyle to eliminate unnecessary expenses or finding less expensive ways to accomplish the same goal can free up necessary money for the mortgage and possibly a chance to develop an emergency mortgage payment account. This account ideally will equal at least one whole payment for unexpected job loss, unpaid medical leave, and other financial burdens that take precedent over the house payment. Understanding the difference between necessary expenses and avoidable expenses is difficult, but necessary in stopping foreclosure process. Even if luxuries seem necessary, such as cell phone and cable, life will not end if they are eliminated even for a short period of time. Early cancellation fees need to be considered in these examples.

Keep clear and consistent communication with lenders. Even when times are financially hard and payments cannot be made, lenders usually show compassion to people who are honest and upfront about problems. Beating the lender to the phone is the best bet, though if the lender calls, sharing all information possible is best. Most lenders have provisions within their contracts that forbearance is allowed for a specific amount of time. Likewise they may offer certain financial services such as counseling for money management and information on programs that may help save money. Selling unneeded items such as a boat or furniture may aid in temporary shortage of funds or the time needed to sell the house in order to help to prevent foreclosure.

In the event that the bank does repossess a house or the owner knows that stopping foreclosure process is unavoidable, then proper preparation is necessary in order to enter the new section of life successfully. If communication is good between lender and borrower, a specific amount of time is granted for the owner to sell the home before the foreclosure process begins. Understanding when the house should be evacuated helps a person determine how long they have to find another place and save the money for security deposit and moving costs. Even with help to prevent foreclosure, a house may simply be more than a family can afford. Therefore when a new place is chosen it is crucial to choose a place that realistically fits in the budget. Starting the new section of life realistically is important to build confidence and credit. Losing possession of a house can be emotionally devastating as well as financially crushing. Living within ones means and finding ways to build credit will enable successful future purchases.

Understanding the consequences of losing a house before even purchasing a house will help to prevent foreclosure. With knowledge of how credit gets ruined which can effect employment and future purchases a person may think twice before purchasing anything that may be more that is affordable. A person should always have a place for emergency savings in their budget in the even of job loss or other life event that effects consistent income. Even the most frugal people can be faced with the task of stopping foreclosure process if a savings account is not developed. In addition, following a declining income can better prepare a person for losing the house gracefully. Certain methods of foreclosure save a persons credit, though learning any lesson about budgeting and finances is crucial for a person to not make the same mistake twice.

Student Loan Bankruptcy

Student loan bankruptcy is only possible when a person is able to claim that they or their dependents are going suffering from unavoidable hardships as a result of not having enough to make payments and a living at the same time. A person should only every officially file for bankruptcy as a last option as doing reflects poorly on credit history which can lead to more difficulties in the future. However, occasionally doing so is necessary in order for people to get out of impossible financial situations and get back on their feet again. There are ways of obtaining assistance no matter what the problems might be, as the Scripture says, "But mine eyes are unto thee, O GOD the Lord: in thee is my trust; leave not my soul destitute" (Psalm 141:8). People do not have to be left destitute and hopeless for there is always hope.

The financial world can be a tricky one if people are not adequately prepared to successfully traverse the ebbs and flows of a dynamic economy. Good financial planning does not come easily and is something which requires a learning process. Healthy spending habits and wise decisions are good places to begin and can often prove to be adequate ways of building a firm foundation on which to build for the future and avoid possible outcomes such as student loan bankruptcy. Problems can arise when unexpected costs add up and can hurt a person's financial standing. As is also the case, some people who face unplanned costs, such as illness, hospital fees, automobile problems and so on, do so in addition to losing an important job which perhaps was the person's only source of income. Such a situation can be a problem, especially with recent college graduates. Graduates do not always have the skills to cope with losing an important job and keeping up with possible bill either due to a lack of experience, poor planning, or a combination of the two. Regardless of the reason, student loan bankruptcy is a way out for some, and is a tactic that can put people back on the right track.

The only way a person can officially file for student loan bankruptcy if there is an actual physical reason for why they cannot work, and proof that future unemployment is impossible due to one's physical condition. Before a person would take such a drastic move the steps towards finding any possible alternative solution should be done first. If someone has been physically injured, ill or for some reason loses or is unable to keep a steady job, perhaps there could still be the option to seek out another alternative through which an adequate living could be made. Those with families to support might find the task difficult, or in some cases impossible and the family might suffer as a result, by way of the lack of sufficient funds with which to buy food and pay the necessary bills. Also, if someone has dependents, which means people who rely on them for a living, does not have to be family members, and the task of securing steady funds is proves impossible, then they qualify as bankrupt and can file accordingly.

Those who see filling for student loan bankruptcy as the only alternative should be cautioned that doing so might not totally do away with all loan payment problems. Instead, one may only be able to consolidate the debt along with any other outstanding bills. Such is the case for people who do have a chance for future employment which could bring along a steady income, at which time the debtor would be allotted three to five years to pay the debt off. Certain rules apply to those might be able to secure an income in the future, and different laws occur with applicable codes. There are ways of determining if the status of bankrupt is applicable to certain cases. People, who are unsure as to the best course of action, should either talk to a financial expert about the predicament or in the very least look into possible alternatives. The Internet can be a good source to find tips and advice on all that goes into filing for student loan bankruptcy, and possible alternatives and even tips concerning ways in which to stay out debt and in good financial standing. Claiming a bankrupt status can help in extreme cases for a person to get out from under debt when the outcome seems bleak, but should be a lat resort and avoided if possible.

People who wish to get out from under debt must have sufficient evidence that they or their dependents indeed suffer from 'undue hardships' to qualify for student loan bankruptcy. In the past, a common procedure for graduates to do was to file for bankruptcy shortly after graduation in the hopes of doing away with the debt before payments would have to be made. Since that time a law was passed that strictly changed the requirements for the official qualifications which constitute being bankrupt, mainly, the requirement of 'undue hardships'. The only way such an act is possible is if a court of law deems that there is just cause and decides that payment would cause the debtor, and dependents, if applicable, to suffer. Only when a court of law agrees with and come to such a ruling in which a person qualifies, will they be able to file for student loan bankruptcy and after the fact a person should do what they can to obtain some form of income or stability for the future.

Filing Bankruptcy On Student Loans

In recent years, filing bankruptcy on student loans has become a major concern for many collegians who find themselves unable to meet financial obligations incurred in pursuit of a degree. By the time the average individual graduates from a public college or university, they will owe as much as $15,000 to $25,000 in government funded financing, not including monies borrowed from private lending institutions. Depending upon what region of the country in which they are enrolled, tuition can range from $3,000 to as much $8,000 per year. According to the U.S. Department of Education, almost 5% of graduates default on education loans within two years after commencement. The high cost of higher education, coupled with a dismal post-graduate job market, has placed many students in jeopardy of financial ruin before they can ever begin what they hoped would be lucrative careers.

Student loan bankruptcy not only impacts graduates' financial futures, but it hits taxpayers in the pocket, too. Statistics indicate that the average taxpayer pays nearly $400 annually in taxes due to student loan bankruptcy court and administrative costs. Parents who mortgaged their homes or co-signed for federal, state and private funding may also be at risk of financial failure in the event of default. Many undergraduates fail to plan a fiscal future and campus life offers little preparation. In the collegiate environment, basic amenities like food, clothing and shelter are taken for granted, and credit card abuse is rampant. By the end of freshman year, undergrads may have received countless offers from major credit card companies to apply for "plastic cash;" and most of them take full advantage of the privilege. If you want pizza, just charge it. Need books for Biology 101? Charge it. And the interest just keeps adding up. But as soon as the lights go dim on the commencement stage, reality hits and the fledgling scholar is left with nothing but a sheepskin and soaring debt. A hard-earned degree but lack of experience will only net an entry level, low-paying job, grossly inadequate to pay the compounded interest accrued on financing an education over the last four to six years. Graduates may feel that the only recourse is to file student loan bankruptcy, in hopes that their debts will be discharged before any substantial income can be earned.

During the 70s, filing bankruptcy on student loans to avoid repaying federal lenders became a widespread trend. By 1998, the federal government changed the criteria for discharging education debts to help stem this fraudulent and costly practice. While one can empathize with college graduates burdened with tens of thousands of dollars of debt, the fact remains that federally-funded education helps pave the way to future profitable careers. In the court of moral judgment, debtors who embrace filing bankruptcy on student loans have an ethical duty to honor their contractual promise, or vow, to repay the lender. Ecclesiastes 5:5 admonishes us, Better is it that thou shouldest not vow, than that thou shouldest vow and not pay.

Since the government's 1998 ruling, individuals seeking eligibility to discharge federally-funded student indebtedness must meet three stringent requirements: (1) Demonstrate to the court that repaying such debt would place "undue hardship" on them and their financial dependents and therefore, jeopardize the ability to maintain a minimal standard of living; (2) Petition and prove to the court that they would experience undue difficulty in maintaining financial solvency due to the exorbitant amount of time it would take to repay educational debts based on current income; and (3) Show documented proof that efforts have been made to repay monies owed for at least five years prior to filing student loan bankruptcy. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 further restructured the criteria for non-dischargeable student indebtedness, making it even more difficult for individuals to file student loan bankruptcy.

Alternatives for college and university graduates seeking to relieve federally-funded loan debt are few. Individuals may consider education loan consolidation whereby outstanding balances for several notes can be combined into one monthly payment. Former collegians may also opt to file Chapter 7 bankruptcy in order to have other forms of indebtedness discharged through regular proceedings. This would help alleviate their overall debt and free some funds which may then be applied to non-dischargeable student loans. Unfortunately, Chapter 7 proceedings may adversely affect a graduate's ability to get future financing. Other alternatives include borrowing a lump sum from a bank or private lending institution to pay off outstanding education loans, or taking out a second home mortgage. Individuals may also enter into a repayment agreement with the U.S. Department of Education to settle defaulted notes. Bear in mind that the Education Department has the right to collect student debts by offset from Federal and state tax refunds and up to 15% of a federal employee's disposable pay, until paid in full. Repayment agreements should be honored to the best of the debtor's ability. One need not have a college degree in order to understand the serious nature of education indebtedness to the federal government. While filing bankruptcy on student loans seems to be an exercise in futility, there are alternative ways to find funding for repayment. A qualified financial consultant can help individuals determine the best course of action to relieve the burden of student loan debt and eventually enjoy the benefits of a good, quality college education.

Different Types Of Bankruptcy

When someone needs financial help, different types of bankruptcy will give a debtor relief from debt that is too deep to repay. This type of legal action stops creditors from harassing the debtor and allows him to take a new look at his financial picture and find a plan that will allow him to start over. Finding this plan may also help deplete the amount owed. But many people do not know much about this process and how to find their way through the legal morass of complex laws and contract obligations. Many would be wise to hire an attorney to draw up a financial plan. Others can help themselves by downloading free forms for filing bankruptcy and doing it themselves. A lot depends on how complicated the person's financial affairs are and how well he understands business law. The lawyer's responsibility is to know the law and advise the person on how best to handle the overwhelming debt.

Making this decision is a serious step, and the person who files needs to take into account all the ramifications of declaring himself insolvent. It will affect the borrowers credit rating and his ability to borrow money in the future. Therefore, finding free forms for filing bankruptcy should be a last resort. But sometimes, people can find themselves in a situation not of their control that brings on terrible debt, such as the loss of a job, an injury in which the borrower cannot work, or piled-up medical debts. In these cases, different types of bankruptcy may be the only solution. Some people have found that one method of avoiding becoming bankrupt is to negotiate with the lenders to work out individual payments. Some nonprofit organizations will help a person through this process; however, some creditors are not willing to negotiate with borrowers. For the person who decides to continue with the plan to claim a bankrupt state, free forms for filing bankruptcy can be found on the Internet. Most people should consult a legal specialists to help them through the process in the courts. If documents are filled out wrongly, the petition may be dismissed in court and the creditors are then free once again to take action against the debtor. This would be especially difficult is the owner is facing a foreclosure or a repossession. The correct petition in court will stop these actions by creditors and allow the debtor to repay the back payments over time.

There are four different types of bankruptcy--chapters 7, 11, 12, and 13. Chapter 11 applies to businesses, but can apply to someone who has an extremely large debt, and chapter 12 usually applies to farmers. Most individuals file under chapters 7 and 13. With chapter 7, the filer should have few assets and mostly unsecured debt. To qualify, the filer takes a Means Test to determine whether the filer has the right monthly income to qualify. This means that the family must have an average income that is equal to or less than the median income in his state. If a person has equity in a home or other property, he shouldn't file for Chapter 7 because his assets may be liquidated to pay the creditors. Under Chapter 13, the filer can keep his property and files a plan to repay the debt over a period of several years; therefore, the assets are not sold to pay for the debt, as what often happens in chapter 7. For both types of legal actions, the debtor is assigned a counselor or trustee who helps make up the plan to pay off the debt. Once the plan is made, the court either approves the plan or orders changes to the plan. Once the court has approved the plan, the debtor must follow through with it until all has been completed. In Chapter 13, the debtor is assigned a trustee to help manage the accounts and see to it that the borrower follows through with what he has promised to do about his finances. In both cases, the debtor is protected from creditors' harassment.

It is essential to understand the different types of bankruptcy because some are not appropriate legal action for certain individuals. On October 17, 2005, a new law was put into effect called the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, which prevents people with high incomes to file with chapter 7. Instead, the applicant must file with Chapter 13. In chapter 7, the debtor's property may be sold to raise some money for the creditors, therefore people who own property will want to avoid this action. One exception to this rule is when a homeowner's house is homesteaded. That means that no one can touch the home, not even those who want to recoup their losses in a bankruptcy. However, debtors may have to turn over their income to the government. For those who struggle with money, Solomon writes in the Bible, "For wisdom is a defence, and money is a defence: but the excellency of knowledge is, that wisdom giveth life to them that have it. (Eccles. 7:12). When debts rise, God is a refuge who can take the anxious heart and give peace. Different types of bankruptcy can solve some of the problems people have with too much debt. Finding free forms for filing bankruptcy on the Internet can be the first step in that process.

Bankruptcy Auto Loans

Consumers on the look out for bankruptcy auto loans often fear predatory interest rates, unreasonable fees and unyielding terms. Many online lenders promise automobile financing that can seem a little too good to be true. Boasting that a potential borrower's credit history is not a concern, some lenders promise speedy approval with few questions asked. Of course, the wise borrower will be sure to ask a good deal of questions before signing on the dotted line. Playing on the borrower's fear and embarrassment, some of these lenders employ predatory practices. Careful comparison shopping when it comes to seeking bankruptcy auto loans is a step that no consumer will regret taking. Individuals who have gone bankrupt may decide to file for either a Chapter 13 or a Chapter 7. The difference between these two methods of filing is rather straight forward. A consumer who files in the Chapter 7 category is basically giving up certain assets and walking away from many debts free and clear. With a Chapter 13 filing, the debtor wishes to work out a plan to attempt to repay back the money owed. By doing so, the debtor can hope to keep most assets. Whichever type of filing a debtor may have chosen, the availability of this financing is an important concern.

Different lenders will have different terms and requirements for consumers who need bankruptcy auto loans. Many lenders will require a minimum monthly income as well as a minimum credit score. Any bankruptcy proceedings will generally need to have been completed before a potential borrower can move forward. If an automobile has been repossessed outside of any Chapter 13 or Chapter 7 proceedings, this will undoubtedly go a long way to limit any attempts at obtaining vehicle financing. While it is not impossible to find success in getting bankruptcy auto loans, it can certainly be challenging. In addition to shopping around for the best prices on a desired automobile, a wise consumer will also carefully shop around for the best interest rates and terms that may be available. The need for sub prime financing does not mean that a buyer should become desperate and agree to unreasonable or predatory terms and rates. The Bible instructs believers to seek God with all their heart. "And ye shall seek me, and find me, when ye shall search for me with all your heart." (Jeremiah 29:13)

When applying for bankruptcy auto loans, a potential borrower should not feel obligated to pay up front application fees or processing fees. Some predatory lenders may try to take advantage of the desperation of sub prime borrowers by attaching unreasonable costs to the application process. There are also lenders who have specific lending programs that cater to a variety of financial issues and problems. In addition to bankruptcy auto loans, some lenders offer financing that deals with issues such as past repossessions, divorce issues, late payments, and charge offs. It is generally a good idea to make sure that financing is within the realistic realm of possibility before beginning the search for a new or used automobile. To shop around for a specific car before knowing if financing will be available could prove to be a huge waste of time, particularly for the consumer with credit history issues. Many factors will determine just what kind of interest rate is attainable for the consumer who is seeking special financing. In addition to a borrower's current credit score, payment history and debt to income ratio, the make and model of the desired vehicle as well as the mileage can have a bearing on the interest rate. The availability of a down payment can also influence the interest rate that is offered.

When individuals file for bankruptcy, they will often choose to either file for Chapter 13 or Chapter 7. In the event of a Chapter 13 filing, there are specific things that must take place before pursuing bankruptcy auto loans. In a Chapter 13, the debtor has agreed to hang on to certain assets and attempt to pay back the debt that is owed. The arrangements that are made prevent creditors from taking further action. The court appoints a trustee to oversee the process and a timeline for paying back delinquent debts. Once the case has been discharged, the borrower will work within the court appointed guidelines to make good on any money owed. Before this borrower can obtain financing for a vehicle, the trustee overseeing the case must draft a letter explaining the amount of money that the potential borrower currently owes and the amount of additional debt that the borrower can safely incur. In some cases, there is no room for another loan and the trustee will recommend that the debtor be denied financing.

Under a Chapter 7 filing, the debtor will see many assets sold to pay off debts. While this approach can do more harm to an individual's credit score, it does get them out from under the mountain of debt that originally caused their financial woes. It is generally impossible to be approved for bankruptcy auto loans while a Chapter 7 case is under consideration. A consumer's credit rating is left in tatters once the proceedings have been completed. Most property of a personal nature is lost in these kinds of proceedings. Credit card and medical debts are generally discharged, but much personal property must be sold. It can be very difficult to obtain financing after this type of filing, but not impossible.

Ways To Stop Foreclosure

One of the best ways to stop foreclosure is to take action before the mortgage lender does. The possibility of losing one's home is a tremendous fear for most homeowners. A house is seldom just a building on a piece of ground. Emotions and memories reside right along with the family inside the rooms and out on the lawn. People work hard to save for the down payment, get sick at their stomachs after signing a contract, turn moving-in day into a festive event, and then live one day at a time in the refuge and shelter of a place that somehow takes on the family's personality. When the month comes that the mortgage can't be paid, emotions and even panic can overwhelm clear judgment and corrective action. Scripture makes this promise: "Blessed are they that keep judgment, and he that doeth righteousness at all times" (Psalm 106:3). Though the circumstances may look hopeless, this is exactly the time when the homeowners need to look at the financial situation causing the difficulty and begin considering the available options. There are definite ways to stop foreclosure and the homeowner needs to have some knowledge of them.

In recent months, people who contracted for subprime mortgages have found themselves in dire situations. Many opted for a subprime mortgage, with its higher interest rate and more expensive fees, because they could not qualify for a prime mortgage with more favorable rates and terms. Too many of these homeowners are now desperately searching for ways to stop foreclosure on their properties. As the crisis has reached epidemic proportions, affecting property values throughout the country, it's now clear that subprime lenders approved an amazing number of loans to borrowers with poor credit histories and not enough income to support rising mortgage payments. Locked into adjustable rate mortgages (ARMs), these homeowners were shocked at how much a couple of percentage points could add to the monthly payment. Not only that, but when they read the fine print of the contract, the homeowners learned that a hefty prepayment penalty made refinancing or selling the home an expensive process. Adding insult to injury, the homeowners had borrowed such a high percentage of the home's appraised value that any equity was practically nonexistent. As housing prices dropped, many people discovered that they owed more for the house than its worth. At first, banks seemed reluctant to help with these situations, but the numbers of affected people reached practically epidemic proportions and neighborhood property values began to plummet, the industry is more interested in helping homeowners find ways to stop foreclosure proceedings.

Mortgage holders send out a notice of default when payments are missed and before starting the foreclosure process. The notices should not be ignored, no matter how frightening or embarrassing it is to receive them. By contacting the mortgage holder, the homeowner may negotiate ways to stop foreclosure proceedings. The mortgage holder may agree to a repayment plan that spreads arrearage and legal fees over a period of time. For this option to work, the homeowner may need to pay at least half the arrearage and legal fees upfront and then agree to a payment schedule that pays off the balance in about six months. For example, if the delinquency totals $8,000, the lender may agree to a $4,000 payment with the remaining $4,000 spread equally over the next six months. This payment will be in addition to the regular house payment. If the homeowner has an ARM, the lender may agree to a temporary modification of the existing terms. For example, the interest rate may be temporarily reduced. Another option, for both an ARM and a conventional loan, is to extend the amortization schedule. This means that the delinquency is attached to the end of the loan. Perhaps the homeowners planned a mortgage-burning party in 25 years and 3 months. If they negotiate an extended amortization schedule with the lender, that party will be postponed as long as it takes to make up the delinquency. A repayment plan and changes in terms are just two ways to stop foreclosure, but will only work with a cooperative lender.

If the homeowner is unsuccessful in negotiating a settlement with the lender, he or she may need to consider contracting with a professional loss mitigation negotiation. This person is specially trained to assist in these types of situation and may be able to negotiate an agreement with more favorable terms than the homeowner could get on his or her own. Other ways to stop foreclosure include a deed in lieu of foreclosure and having a short sale. In the former, the lender agrees to take back the property instead of foreclosing. In almost every case, any deficiency between the selling price and the outstanding amount of the loan will need to be made up by the former homeowner. For example, the total amount of the original loan plus arrearages and legal fees may equal $175,000. If the lender sells the property for $165,000, the individual still owes $10,000. In a short sale, the house is sold and the lender agrees to accept the purchase price. In negotiating this type of arrangement, the homeowners need to read all the fine print of the contract to ensure they are not liable for any deficiency. Using the same example, if the lender agreed to a short sale and did not include language in the contract holding the homeowners responsible for any deficiency, then the individuals are free of any further obligation. Perhaps one of the worst ways to stop foreclosure is to apply for bankruptcy protection. Experts advise bankruptcy as only a last resort. However, if the homeowners have no other choice due to overwhelming debt, they are advised to seek competent legal counsel before filing a petition with the courts.