Debt Consolidation Blog

The State of Tennessee has realized the correlation between personal financial literacy and the success of its economy. New personal finance classes are being offered that help improve financial education at an elementary school level. The addition of personal finance courses in early education has long been overlooked and has been a necessity for children and young adults to learn the rudiments of basic financial concepts. The correlation between financially literate adults and a prosperous economy is undeniable and efforts at the State level to provide this education is commendable.

Tennessee has implemented financial literacy training through a program called Jump Start.  The courses are offered within the public school system and completion of them is required for graduation. This initiative has a primary goal of educating Tennessee youth about basic financial concepts. Some of the topics covered by the course include simple but essential skills such as balancing a checkbook, managing debt, savings and investing, and completing a loan application. The literacy programs would be incorporated into traditional high school learning standards.

In addition to basic personal financial literacy skills the JumpStart program also aims to educate high school youth on the essentials of the free enterprise system. Some of the concepts taught include earning an income, spending and credit, money management, and saving and investing.  These educational courses are provided by a program through JumpStart. JumpStart is a non- profit national organization that was founded in late 1995. It is headquartered in Washington and consists of 49 affiliated state coalitions and their respective local partners that are in addition to the national coalition. Some of the states that participate in the JumpStart program do so under another name. Volunteers make up the majority of the workers in each state except for a few paid workers.

The TN State coalition of the JumpStart program passed a bill in 2006 that was signed by the Governor. The Bill requires a program of financial literacy instruction that mandates students to complete it in order to graduate on time. According to the Bill, the course was set to be implemented for the year 2009-2010 and would amount to .5 credit towards graduation.

Tennessee’s active involvement in the JumpStart coalition demonstrates their awareness of the importance of personal finance education. Mastering the financial skills necessary for later success in life is vital for personal success which in turn affects the economy of the State as a whole. Making the financial literacy course a graduation requirement ensures that the class is taken seriously. With sufficient financial education, today’s youth will be well equipped to make the financial decisions of the future that will impact both the State and national economy in a positive way.

Articles on this site have been acquired from a variety of sources.  No content on this site should be considered financial or legal advice

Baby Savings
The Dollar Stretcher
by Gary Foreman
gary @stretcher.com

Dear Dollar Stretcher,
I’m expecting a baby! It’s my first so everything is new for me. I’m feeling overwhelmed with the whole thing. I can’t ask my mom for advice (long story) so I’m really on my own. There seems to be a million things that I need to buy. I want the best for my baby but if I buy everything they say I’ll need my husband will kill me. What should I do?
Krystal

Congrats Krystal!
It’s not surprising that you’re excited and a bit overwhelmed. First babies will do that. It’s their job. Your job is to grow into the role of parent. That means taking care of you and the baby physically. And preparing for the beginning of a new life in your home.

It’s a shame that your mother can’t help. Mothers have been imparting wisdom to their pregnant daughters for eons. Typically it’s some of the best advice you can get.

In your case you’d be wise to find a substitute. Look for someone from your mother’s generation that you respect. Someone with grown children. Ask them to spend some time with you during the pregnancy sharing their stories and advice. They’ll have a perspective that only years can bring. Some of the things that we do with our babies will have an affect years later. Good and bad. Find someone who can share that wisdom with you.

Look, too, for a friend who has had a baby recently. They’ll be attuned to the latest trends and resources. Things that weren’t available when your mom’s generation was expecting. Many of the tools are a big help. Your friend can help you find the best ones.

One thing that they will tell you is that when you’re expecting it’s very easy to overspend. As you say, you want the best for your baby. You think that your baby deserves the best. But, the truth is that your baby will do very well without the best of everything.

In fact, if you get the best of everything you could actually be hurting your baby. Worrying about how you’ll pay all those credit card bills is stressful. And mom being stressed isn’t healthy for baby either before or after delivery.

There are four things that newborns really need: a good home, good food, clothing and parental love. The first three cost money. The last one is priceless.

Begin with your home. Yes, it’s great if you can afford a completely decorated nursery for your baby. But, it’s more for the adults than the baby. What your baby really needs is a place to sleep, not Disney characters on the walls.

Changing tables, dressers and other baby furniture are nice, but not necessary. Some of those items do make parenting easier. For instance many parents credit the baby swing with saving their sanity. But, if all you can afford is a crib in the corner of mom and dad’s room then that will work fine.

Obviously that precious bundle will need nourishment. Breastfeeding baby can save you $1,000 or more in the first year. You can find plenty of info on breastfeeding with a simple search.

If you use formula look for coupons. You’ll find them everywhere. Consider making your own baby food. It’s surprisingly easy and can save a lot.

Also, if you’re struggling financially, find out about WIC. It’s a government program to support mothers and children.

Next, that little one will need clothes and diapers. Don’t spend a lot on fancy outfits. Chances are that you’ll get a few as gifts and that’s all you need. You won’t have your baby dressed nicely often.

What you will need is lots of every day clothes that can handle spit-ups. Those don’t need to be bought new. Check out craigslist and thrift stores for used clothes and friends for hand-me-downs. Think functional. In the first year babies can be hard on clothes.

Remember, too, that babies grow quickly in their first year. It’s common for moms to have ’6 month’ outfits that were never worn before the baby outgrew them.

As to diapers, you’ll find some moms wouldn’t dream of giving up the convenience of disposables. If you’re one of those you will spend more on diapering. You can reduce the cost somewhat by looking for diapers on craigslist and other used goods sites. Many parents end up with unused diapers that are too small for their baby.

Test out some store brand diapers. They work fine if you can find one that’s a good fit for your little one. Also, become a coupon clipper. Coupons are a great friend to new moms.

Cloth diapers can reduce the cost by half or more. They do take more work, but aren’t nearly as bad as you might think. Also, cloth diapers don’t end up in landfills if that’s a concern for you. Some moms are using cloth at home and disposables when baby is away from home. A bit of the best of both strategies.

Be prepared to resell things when you’re through with them. Online marketplaces make it much easier to buy and sell things. Some moms aren’t storing cribs and clothing for the next baby. They’re selling the items now and buying used when they’re expecting again. Often they can buy something, use it and then sell it for nearly what they paid for it.

For first time moms, what you don’t know can hurt you. At least financially. You’re the perfect target for marketers. Naturally you want to be the best mom you can be. And, without experience, so many things can seem critical to getting your baby off to a fine start. That’s why it’s important to talk with more experienced moms and grandmoms before you pull our your purse.

If you spend too much now you could actually be creating an unhealthy, stressful environment. That could make it difficult for you and dad to provide the love that’s really essential for that precious little person!

Keep on Stretching those Dollars!
Gary

_____________

Gary Foreman is a former purchasing manager who currently edits The
Dollar Stretcher website . You can follow Gary on Twitter . For more on ways to reduce baby expenses.

Articles on www.debtplan.org have been acquired from a variety of sources. No content on this site should be considered financial or legal advice

Recent cuts in federal spending will have a direct impact on the condition of the MD economy. Maryland, a state that relies heavily on federal spending to bolster its economy is now facing a harsh reality that may see many businesses suffer. The direct impact of the federal budget cuts may not come into effect immediately but when they do, it is sure to negatively impact the state as a whole.

Local Maryland businesses will be enormously affected by Federal budget cuts and many companies are preparing for the impending storm. Local businesses have begun placing freezes on hiring as well as performing their own budget cuts in an effort to lessen the blow. For many businesses it will feel as though the rug has been pulled out from under them as money they previously relied on slowly begins to dissipate. A plan has been set into motion for spending cuts that will occur over a ten year long period that will begin in the year 2013. The precautionary actions of these businesses are right in line with the advice of Washington economists. Jim Dinegar, the president of the Greater Washington Board of Trade was quoted as saying, “Businesses should start planning now to mitigate the effects once sweeping cuts take effect.”

The plan that will enact the budget cuts is set to occur in stages. The first cuts will eliminate $350 billion in defense spending over a ten year period. Subsequently, the next round of cuts could result in over 1.2 trillion dollars in the areas of defense spending. Although many of the budget cuts will be occurring in the area of defense spending, this is still an arena on which Maryland’s economy relies heavily. Aerospace companies such as Lockheed Martin and Northrop Grumman and many smaller defense companies provide quite a bit of revenue for the state of Maryland. For the year 2009 alone, the total amount of defense contracts totaled $18.5 billion.

The effect of the budget cuts will be felt by the population as a whole as Washington has been spending almost a quarter of a billion dollars in the State of Maryland alone. This figure amounts to roughly $15,000 annually for each man, woman and child that resides in Maryland and there is no way that spending cuts won’t filter down on a personal level for Maryland residents.  Richard Clinch, an economist who has been following the events in Maryland was quoted as saying “The out years of this deal are going to suppress growth in Maryland. We are going to have to live on our wits rather than federal spending.”

The future may seem grim in regards to the decline of federal money being pipelined to Maryland, however economists hope for additional jobs being added in the future. Until then, businesses remain careful of their spending and have limited their hiring for the time being. Whether all aspects of the proposed federal budget cuts become a reality is yet to be seen but in the meantime, Maryland residents should be aware that changes are coming in the years ahead.

Articles on www.debtplan.org have been acquired from a variety of sources. No content on this site should be considered financial or legal advice

Debt consolidation can assist you with paying down your debts in a way that is manageable for you. There are many different ways to consolidate your debts depending on your particular financial situation. Exploring the different methods available to you can help you to decide what the best approach is for you and what strategy you should use to eliminate your debt in an efficient way. The main methods of debt consolidation focus on using a professional service or attempting to consolidate your debt on your own.

A debt management service can help you come up with a debt consolidation plan that fits your financial needs. Using a professional service is an effective way of handling your debt as a debt consultant is most equipped to advise you on the best route to take for consolidating. One of the debt consolidation methods that will be available to you through a professional service is a debt consolidation loan. A debt consolidation loan requires that you have a strong financial ability to repay the loan as one of the conditions. When considering which loan to select, you will want to choose one that has a lower interest rate than you r credit card’s interest rate. The benefits of a debt consolidation loan include paying off all your existing unsecured debt using the funds from the loan and making one single installment payment at a low interest rate.

Another way to handle debt consolidation is to do it on your own terms. There are many different self-service debt consolidation options available to you. One such debt consolidation option is to perform a balance transfer by moving a high balance from one credit card to another with a lower interest rate; this is called a balance transfer. A balance transfer is an excellent method of combining your existing credit card debt into one single monthly payment. You can explore balance transfers by comparing available offers that you may qualify for. Be advised that a good credit rating is usually a requirement for a 0% interest rate on your balance transfer. In addition there may be fees involved in your transfer that you should be aware of before deciding to proceed with this debt consolidation technique.

You can also consolidate your debts by using personal assets as collateral; this is the case in a home equity loan. Your home equity loan will allow you to obtain funds to pay off existing credit card debt, however with your home as collateral, timely payments are mandatory. You can also borrow against your 401K for a hardship loan and there may be applicable penalties and fees associated with this method.

Deciding on a debt consolidation method is dependent on your unique financial needs. Consulting with a debt professional can be extremely helpful in deciding what method may work best for you. Whichever method of debt consolidation you choose, it is important to make your payments on time to help you avoid falling back into unmanageable debt. Debt consolidation is one of the most efficient methods of lowering your payments into one simple and easy monthly payment for increased manageability.

Articles on www.debtplan.org have been acquired from a variety of sources. No content on this site should be considered financial or legal advice

The decision to consolidate debts is one that can yield great financial rewards. Gaining control of your finances by consolidating your bills into one payment is an effective technique that can help to save you money in the long run. Paying interest rates on many different debts at once can become costly and can lead to you falling behind on your debts and becoming unable to pay. Insolvency in your financial affairs can be a debilitating and frustrating experience that can be remedied by consolidating your debts. Choosing the right company to help you consolidate debts can help you avoid some of the pitfalls present within the debt management industry.

When you are ready to select a debt relief company to help you consolidate debts, it is important to do some investigative research before you proceed with one particular company. As in most industries, there are good companies as well as companies that do not have your best interest as a priority. By researching beforehand, you can save quite a bit of time and money. Do a Google search for the company you are considering and type in ‘reviews’ next to the name of the business. This will give you an idea of other customer’s experience with this particular business.

Another pitfall to avoid when using a debt consolidation company is to stay away from companies that promise to rebuild your credit quickly. Any debt repair service takes time and your consistent monthly payments are an integral part of that process. Any company that makes these claims is usually trying to gain customers by any means necessary. Companies that make false claims are likely to also be deceptive in their practices so avoid these consolidation companies at all costs.

When trying to consolidate debts, you may be charged a fee by the debt management company you select. However be advised that any fees should only be paid once the service has been performed. Be wary of any company that requires an upfront fee to consolidate debts for you. Also be wary of a company that requires that you submit personal information before they inform you of their services. A company should be forthright about what services they provide and how they will help you before requiring any commitment or personal information from you.

You may encounter a debt relief company that attempts to enroll you in a debt management plan without reviewing your particular financial situation. Every person’s financial life is unique and you should always be offered a counseling session before making the decision to consolidate debts through a debt management plan.

Following these guidelines when working with a debt relief service can help you avoid some of the pitfalls that exist in the debt consolidation industry. The truth is disreputable companies are a reality and making the choice to become an informed consumer can help you to avoid them. By researching a company beforehand and recognizing the signs of a predatory company, you can be well on your way to consolidating debts and managing your finances.

Articles on www.debtplan.org have been acquired from a variety of sources. No content on this site should be considered financial or legal advice

The healthcare industry in Alaska has quickly become one of the fastest growing fields in the entire state. As other employment opportunities continue to stagnate and decline, the healthcare field has been steadily providing jobs for the Alaskan population. In fact the need for workers has increased and there is currently a deficit in the available workers to healthcare jobs in AK. Training programs are being developed to help fill the need for healthcare workers which will in turn work to further stimulate Alaska’s economy.

More than 9 percent of the jobs created in Alaska in 2010 were in the healthcare field. Some of these jobs include Certified Nurse Assistant, Licensed Practical Nurse, Physician’s Assistant, and many more positions in the healthcare field. The healthcare field was the fourth largest in 2010 with an estimated total of 31,800 jobs and a payroll that exceeded $1.53 billion. The rapidly growing field has offered many opportunities for workers displaced from other professions due to the recession. It has also provided opportunities for students deciding on a course of study. The sad reality is that in today’s sluggish economy many new graduates end up unemployed or working outside of their field. However with a major in a healthcare related field, opportunities for new college graduates abound in Alaska.

To help fill the need for the demand in healthcare workforce, there are many courses available to provide adequate training. The University of Alaska offers over 90 health programs in the areas of medical billing and coding, nursing, nurse practitioner, public and allied health, nutrition and dietetics and behavioral health. Other training programs are being offered at Alaska’s Institute of Technology (AVTEC) which is part of Alaska’s Department of Labor and Workforce Development. They offer an eight week Certified Nursing Assistant program and a 10 month Licensed Nurse Practitioner Program. This training is a vital part of filling the gap between available healthcare workers and the current demand.

For the past decade, the healthcare industry has created over 10,000 jobs. This has been a great help to an economy that has been hit hard because of the recession. With the healthcare field continuing to expand, there is an almost endless stream of available jobs in this sector. As the Alaskan population continues to grow, the demand for healthcare also increases. The Census of 2010 reported that the Alaskan population grew to more than 710,000 people, a significant 13 percent increase since the last Census of 2000 when the total population was 627,000.

With the demand for healthcare workers high, and educational institutions filling that need with appropriate courses, there should be a marked improvement in the employment rate within the Alaskan community. Although it may require that many people change course from previous interests and professions, at a time when jobs are scarce, the proliferation of healthcare positions provide much needed employment opportunities for Alaskan residents.

Articles on www.debtplan.org have been acquired from a variety of sources. No content on this site should be considered financial or legal advice

In comparison to the national unemployment rate that is at 8.6%, Iowa continues to reflect a low unemployment rate that has remained steady at 6.0%. The economy of IA is showing positive signs of improvement as the State continues to experience profitability in the manufacturing sector.

In October, the amount of unemployed Iowans dropped below 100,000 for the first time since November 2009. The seasonally adjusted unemployment rate was 6.0% for the month of October and has remained so for the past two month consistently. This may be due in part to the manufacturing sector of Iowa State which provides a large amount of employment opportunities to local residents.

Manufacturing is the number one industry in Iowa State and accounts for $28.3 million in profits. It has always been a large contributor to Iowa’s economy for decades past. As early as 1939, manufacturing jobs accounted for 30.4% of the employment in Iowa and paid the highest wages. The highest paying manufacturing firms were those that provided goods in relation to Iowa’s agricultural system. Currently, 4,100 manufacturers provide 206,000 Iowans with jobs and that number is set to increase. The state has created a tax friendly climate that encourages businesses in the manufacturing arena to move their headquarters to Iowa.  Manufacturers stationed in Iowa pay no property taxes or sales taxes on their machinery, computers, equipment or any electricity and natural gasses used in their business.

Alcoa Inc.’s Davenport Works Aluminum Plant is headquartered in Iowa and the company touts it as “one of the most advanced manufacturing plants in the world.” The plant even garnered a recent visit from President Obama who was making his case for improvements in manufacturing having a positive effect on the economy. The Alcoa plant produces high tech alloys which are used in aerospace technology for the production of light weight vehicles and aircrafts. The plant has also provided jobs for Iowa residents and has increased its staff by more than 2,200 people.

Debi Durham, director of Iowa Department of Economic Development has positive things to say about the manufacturing success that Iowa has been experiencing, she stated “Right now we’re seeing some really good numbers in manufacturing…not only in expansions that are occurring in growth and employment but also in some big capital-investment projects that are coming down the pipeline.” Iowa seems to be expanding in all factions of the manufacturing sector including advancements in the wind-power industry and aerospace.

As a result of Iowa’s large strides in the manufacturing arena and tax friendly atmosphere, many businesses are being drawn in. Just this past April, Valent BioSciences Corp. stated their plans to move their manufacturing plants to Osage, Iowa from Northern Chicago, Ill. The company plans to construct a fermentation factory on a 73 acre campus. The project is estimated at $150 million and the Valent Company states that the business endeavor is the ‘largest single investment of any company in the world to support the manufacturing of biorational products.’

Iowa’s low unemployment rate and successful manufacturing industry make it one of the most successful States in the nation.

Articles on www.debtplan.org have been acquired from a variety of sources. No content on this site should be considered financial or legal advice

New Hampshire’s economy has weathered the recession much more seamlessly than many other U.S. States; however there is still a far way to go to get back to pre-recession norms. The condition of NH economy continues to outpace the surrounding New England States and more jobs are predicted for the year 2013.

New Hampshire has experienced a sound economic climate for the majority of the recession. It’s seasonally adjusted unemployment rate for November of 2011 was reported at 5.2% which is an improvement from 5.7% one year ago. According to information provided by the New Hampshire Economic and Labor Market Information Bureau, the total number of unemployed state residents decreased by 1,020 over the course of November. The total amount of employed residents climbed to 707,960 which is an increase of 6,590 from last November 2010.

The amount of employed residents is increasing which is representative of a stabilizing economy. However some economists feel that New Hampshire is not yet ‘out of the water.’ Dennis Delay, the New Hampshire Forecast Manager for The New England Economic Partnership sated “Unemployment was little improved in the summer months of 2011, to about 5,000 jobs per year, half the pace seen in the months of June through August 2011. Any acceleration in private-sector job creation looks to be partially offset by public sector job losses.”

Although Delay concedes that the amount of job additions for the summer of 2011 were minimal, he predicts that more jobs should be added throughout 2013 and going into 2014. Delay stated that “At the current rate of growth New Hampshire will have regained all of the jobs lost in the Great Recession by the second quarter of 2013. New Hampshire is recovering faster than the surrounding New England States.” Delay’s statement confirms that even though job growth may be slow, the overall rate of economic growth is expanding and outpacing the rest of the nation in terms of total employment.

Data from the Fall Economic Outlook Conference of 2011 demonstrates that in addition to a low unemployment rate, New Hampshire is also experiencing an improving housing market. Statistics show that home prices have returned to the previous levels of 2000. However the amount of single family homes being sold is less than that of the year 2000. In addition, total activity in homes sold have been down 28% from the previous fall, but prices returning to normal remains a positive indicator for the future of New Hampshire’s real estate market.

Overall, New Hampshire’s economy has been performing well above average in comparison with the rest of the nation. A stabilizing housing market, low unemployment rate and a projected increase in employment opportunities for years 2013 and 2014 all bode well for the continued success of New Hampshire’s economic outlook.

Articles on www.debtplan.org have been acquired from a variety of sources. No content on this site should be considered financial or legal advice

2 Reasons Interest Rates Will Rise & 2 Ways to Avoid Higher Rates
The Dollar Stretcher
by Gary Foreman
gary @stretcher.com

Forecasting the future is always hard. Companies pay big bucks to economists in an effort to get an edge on what might happen in the financial markets. Sometimes they’re right. And, sometimes they’re wrong.

But sometimes a review of relevant facts can shed light on what the future may bring. Or at least make it easier to predict a direction. Given the current situation it would appear that forecasting the future for interest rates would be such a case.

For instance, experts expect the cost of borrowing to increase nearly 40% for the G7 governments. They’ll be borrowing over $8 trillion in the next year.

Now that’s not to say that everyone’s costs to borrow will increase by 40%. Part of that rise is due to the fact that some governments have a lower credit rating than they did a year ago.

Central banks and the Federal Reserve Board are trying to combat the problem by keeping interest rates artificially low to make borrowing affordable for the governments. But that’s not easy. Lower rates means that fewer buyers are interested. Rates have to be high enough to attract enough buyers.

Bottom line is that governments will be borrowing a lot of money in 2012. Competing with you and I for loans. The way they compete is to offer a higher interest rate on the money they borrow.

Another aspect of demand comes from you and I. Will we be borrowing more than we did in 2011? There’s some evidence that we will. Economic forecasts for the next year are all over the lot. But the average runs about 2 to 3% growth for the US economy in 2012. Any growth in the US economy is likely to be accompanied by increased consumer spending. Spending that will probably be paid for by increase borrowing on credit cards.

Again, more competition for loan dollars. Paid for with higher interest rates.

Ok, so let’s agree that higher rates are a distinct possibility. So what can you do to protect yourself?

The first answer is to take a look at your debts. How much do you owe on all your outstanding loans? Make a list. On that list include the current interest rate and whether than rate can be changed by the lender without your permission.

You want to concentrate on the loans where the interest rate can be increased, often called variable rate loans. If you’re unsure whether a loan is fixed or variable contact the lender.

Pay off as much of the variable rate loans as possible as soon as possible. Use any sources of extra money you can find. Cut expenses and/or look for additional sources of income that can be applied to your loan. Pay only the minimums on fixed loans and use an extra on your variable loans.

Then look for opportunities to shift debt from variable to fixed rates. If you have equity in your home now is a good time to consider refinancing. Use the proceeds to pay off your existing mortgage and credit card debts.

Another possibility for shifting from variable to fixed loans would be to borrow from your 401k to repay variables like credit cards.

A caution to those who struggle with debts. Reducing your credit card balances does not give you permission to charge them up again. You need to commit to keeping the balances down.

Naturally, there’s no guarantee that interest rates will rise. Those things are never certain. But, even if you take action and rates don’t go up you’ll be in a better position. You’ll have fewer debts and be paying a low interest rate on them. And, if rates should increase, you’ll be glad that you took action now.

Keep on Stretching those Dollars!
Gary

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Gary Foreman is a former purchasing manager who currently edits The
Dollar Stretcher website . You can follow Gary on Twitter . For more on ways to reduce financial stress.

Articles on www.debtplan.org have been acquired from a variety of sources. No content on this site should be considered financial or legal advice

Many people considering bankruptcy opt to use a Chapter 7 bankruptcy filing to help them erase the pressures of mounting debt. However Chapter 7 bankruptcy remains on a credit report for up to a decade and it can be extremely difficult to obtain new credit while a bankruptcy is reflecting on your credit report. There is another option available for individuals and that is Chapter 11 bankruptcy filing. This particular bankruptcy allows you more flexibility to restructure your debts and is easier to work with than a more severe Chapter 7 filing.

In a Chapter 7 bankruptcy, your assets are seized and sold to recover the debts owed to your creditors. This type of bankruptcy is very severe in that it remains on your credit for ten years and your possessions may be taken to make up for the debts you owe. Instead of filing a traditional Chapter 7, you may want to consider debt restructuring under a Chapter 11 bankruptcy filing.

A Chapter 11 bankruptcy can be used for individual debt reorganization. These types of bankruptcies were formally reserved for large corporations who wanted to remain intact while still repaying their creditors with a managed payment plan. However with recent changes to the bankruptcy code, a Chapter 11 bankruptcy can now be modified and applied to individuals seeking debt relief. Chapter 11 bankruptcy can be an excellent alternative to Chapter 7 or 13. It is an appropriate choice for consumers who have too much debt for Chapter 13 but who wish to avoid the severity of a Chapter 7 bankruptcy.

Another option for bankruptcy filing used by individuals is the Chapter 13 filing. This option is similar to Chapter 11 in that it is a reorganization plan that helps the debtor establish a payment plan without having their personal assets seized. At the end of the payment plan period, certain debts are completely discharged and the debtor’s credit record is cleared of these debts permanently.

Chapter 11 is also used in place of Chapter 7 or 13 when the debtor wishes to use a repayment plan and have their debt discharged without the need of a financial management course. A financial management course is a requisite in a traditional Chapter 13 reorganization plans. However all bankruptcies mandate credit counseling before any debts can be discharged. The amendments to Chapter 11 include the new sections which are sections 1115, 1123(a)(8) and 1129(a. These new sections state that a Chapter 11 debtor must commit to turning over a part of future wages to their creditors and all payment plans must be completed before a discharge can be carried out. This plan works well for consumers with an exorbitant amount of debt that needs to be restructured.

Understanding the basics of a Chapter 11 bankruptcy can help you determine whether this option is the best bankruptcy option for you. Chapter 11 filings are best suited for consumers with too much debt to file a Chapter 13 but who do not wish to choose a Chapter 7 due to its sever terms. Although the decision to file bankruptcy is never an easy one, availing yourself of options is the best way to make accurate choices that will lead to an improved financial condition.

Articles on www.debtplan.org have been acquired from a variety of sources. No content on this site should be considered financial or legal advice