Personal Bankruptcy Standard 13.1 Bankruptcy

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Presentation transcript:

Personal Bankruptcy Standard 13.1 Bankruptcy © 2008. Oklahoma State Department of Education. All rights reserved.

Cache Bankrupt Bankruptcy Consumer Credit Counseling Creditor Debt Consolidation Loan Financial Counseling Home Equity Loan © 2008. Oklahoma State Department of Education. All rights reserved.

Managing Debt Refinancing debt Debt consolidation loan Combines all payments into one Tends to have high interest rate Must change your behavior or you will only have more debt! © 2008. Oklahoma State Department of Education. All rights reserved.

Home Equity Loan Borrow money on your home to pay your monthly bills. If you miss one or more payments, you can lose your home. © 2008. Oklahoma State Department of Education. All rights reserved.

Credit Counseling Restructure your debt Set up a new payment plan Monitor your progress Some are not reputable © 2008. Oklahoma State Department of Education. All rights reserved.

Bankruptcy A legal process where you request help from the courts to help manage your debt. Bankruptcy petition Chapter 7 – Straight bankruptcy Chapter 13 – Reorganization of debt Financial counseling required © 2008. Oklahoma State Department of Education. All rights reserved.

Bankruptcy Chapter 7 Bankruptcy trustee takes your assets, converts them to cash, and uses the money to pay your creditors. Exempt and Non-exempt property Most people who file only have exempt property. Cannot re-file for 8 years No exceptions © 2008. Oklahoma State Department of Education. All rights reserved.

Bankruptcy Chapter 13 Debt adjustment Allows you to keep your property. Repayment plan - You must have a job where you can make regular monthly payments to file. Lasts about three to five years. © 2008. Oklahoma State Department of Education. All rights reserved.

Top Reasons for Bankruptcy Divorce Illness Gambling Unemployment Failing to pay taxes Excessive medical bills © 2008. Oklahoma State Department of Education. All rights reserved.

When to File? When you have no other choice: Financial or credit counseling? Call creditors? New payment plans? It is a drastic action, so be sure! Contact an attorney for pre-screening. © 2008. Oklahoma State Department of Education. All rights reserved.

Life After Bankruptcy? Remains on credit history for ten years Lower credit score Higher interest rates High risk Not all debt eliminated Fees Attorneys Counseling Others © 2008. Oklahoma State Department of Education. All rights reserved.

No more debt collectors calling Reduces stress Fresh start Life After Bankruptcy? No more debt collectors calling Reduces stress Fresh start Lessons learned © 2008. Oklahoma State Department of Education. All rights reserved.

Repairing Credit Pay bills on time. Establish budget. Avoid credit repair services! Continue these good habits, and your score will increase! © 2008. Oklahoma State Department of Education. All rights reserved.

High levels of debt is stressful. Earnings Good money management skills reduces the potential of filing bankruptcy or having excessive debt. High levels of debt is stressful. High levels of debt lead to personal and family problems. Know your options to make the best choices when dealing with debt. © 2008. Oklahoma State Department of Education. All rights reserved.