By Jon Brooks

Among the new requirements introduced by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, were the requirements that every debtor seeking to file for bankruptcy protection complete the pre-filing bankruptcy debtor credit counseling course offered by numerous new US Trustee-approved course providers.

The new requirements mandate that consumer debtors must complete one of these US Trustee approved programs of “Credit Counseling” prior to filing either Chapter 7 or Chapter 13 bankruptcy. Your bankruptcy attorney must receive a copy of the course completion certificate prior to filing your bankruptcy and file this certificate along with your Chapter 7 or Chapter 13 bankruptcy petition to the US Bankruptcy Court or face a motion to dismiss your case for failure to file such a pre-filing bankruptcy credit counseling certificate.

In addition, prior to obtaining a bankruptcy discharge, the debtor must also complete a subsequent course of “Debtor Education” purportedly aimed at teaching the average consumer how to handle consumer credit and debt. Whether such debtor education will curb future bankruptcies is of course subject to debate.

Just as with the pre-filing credit counseling, prior to obtaining a bankruptcy discharge, one must file a pre-discharge “debtor education” certificate filings in order to obtain the discharge and complete the bankruptcy filing.

For a detailed explanation of both pre-filing and pre-discharge counseling and debtor education course requirements please visit our website which includes links to the US Trustee approved course providers.

Always seek the advice of a licensed and experience bankruptcy lawyer when considering whether to file for bankruptcy protection.

Jon G. Brooks is a San Jose Bankruptcy Lawyer who practices Chapter 7 and Chapter 13 Bankruptcies.

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The count down is on for the end of the month when most if not all of our Christmas bills will arrive.. you ready? Its really no biggy,  When they arrive open them exactly the day you get them in the mail or on the internet. Place them neatly in front of you to get a picture.

Pull up your bank balance and have a look. Match similar bills together and then start to pay every one! If you can not pay the whole balance then contact the creditor on the front end and begin the dialog between you and them as to how much  you can pay this month and set up a plan.

Do not ignore the situation, it is hard, but nothing is harder than the phone calls, letters, and likely the effect on your credit score if you choose not to act.  If you need help, contact a credit counsellor for more information.

For many Americans, credit counseling (or if you are in Canada, credit counselling), is a great strategy for dealing with overwhelming debt.  Credit counseling is a great solution for dealing with credit card and other high interest debt, because in most cases your credit counselor will negotiate a repayment plan with little or no interest.

But what can you do if you can’t repay your debt through credit counseling, even with little or no interest?

A debt consolidation loan is an option, but that probably only makes sense if you can consolidate your debt over a period of many years, since with a debt consolidation loan you will be paying interest (with credit counseling you pay little or no interest).

If credit counseling and debt consolidation are not possible, you may need to file a Chapter 13 Wage Earner Plan (if you are an American), or a consumer proposal (if you are a Canadian).   These plans are a way to repay some of your debt, while avoiding personal bankruptcy.  (For more information, Canadians should research personal bankruptcy, which for Americans is called Chapter 7 bankruptcy).

There are other alternatives to bankruptcy.  For example, here’s a report on How to Get Out of Debt Fast Without Filing Bankruptcy that offers practical tips on dealing with debt.  You do have options, so begin researching your options today.

There are many different meanings for the term consumer credit counseling.

In it’s simplest form, credit counselling is the process where you meet with a credit counselor and they give you advice on managing your money. They will help you deal with credit card debt, and they will explain how to improve your credit score on your credit report.

In addition, if you are planning to file for personal bankruptcy in the United States, they will conduct the mandatory credit counseling before filing bankruptcy, and the post bankruptcy filing credit counseling session. In Canada, the credit counsellor will conduct the credit counselling during the bankruptcy process.

Finally, a credit counselor will actually negotiate with your creditors on your behalf through a Debt Management Program where you make one payment each month to deal with your debts.

For more information, consult a local credit counselor.

Consumer credit counseling refers to advice you get from a credit counselor to help you deal with your debts. Your credit counselor may advise you to get a debt consolidation loan, or they may help you with budgeting to pay off your debts on your own.

If you required more help, they may recommend a Debt Management Program where you make one payment each month to deal with your debts.

In a debt management plan the credit counsellor negotiates the settlement on your behalf, and your debts are repaid over a period of time. In other words, a debt management plan is one of the services provided by a credit counselor on your behalf.

Just a few notes on 2007,  more people than the last two years will notice a distinct impact on their available credit then they expect.

Fewer and Fewer banks will be as accepting as they were in order to re finance existing loans or mortgages.

Rising interest rates will affect consumer borrowing costs at a rate 2 times as much as the increase in Prime Rate.

There will be a distinct increase in the number of Credit Card offers and options coming through the mail and internet.

By shear numbers, insolvency will increase dramatically and the time to react to this will decrease because of denial and fright.

The fix is simple… Look at all of your outgoing expenses and ask your self ” Does this honestly feel right?”  most people have a little voice inside that is more insightful and honest then they will accept. There are many, many services, strategies and professionals out there that can assist you to counter strike agains financial distress. We too can help so please ask!… OK?  Please..

Its a bit of a twist on the old game but if you pay 10% more than you regular bill balance per month than in approx 7 months you will be one month ahead and in a Credit balance situation. If effect your creditors (utilities, cel providers, cable etc) will owe you money you over paid… Cool eh? You are now a customer that they would love to keep and will do as much with their corporate power to do so. Only about 10% of consumer maintain credit balances. 30% or so are current and the rest are behind at least one month. With establishing an expense plan and adjusting some expenses like lunchs, fast food, coffees, alcohol or tobacco to over pay others (the ones with late fees and reconnection charges) than away you go.

Example: A $100.00 bill on a regular basis could be paid at $110.00 (only 10%) for 7 months the actual balance owed each month declines to next to nothing keep going til you get a month ahead.

For a run down of the math please contact us.

Ho Ho Ho and happy debt we owe!..  We can get around debt but not too far around.. We buy it we got to pay for it… Some how some way but nonetheless its our Grinch to play with…  The biggest month for Bankruptcy and Insolvency problems is February… The emotional drain on the system to “give the kids what they want”, Beat the Jones’ Have the best Christmas ever! is only in our heads and supported by our egos. We have only so much money and so much credit to go around.. Look at whom, what and why before you buy?  (In the writers opinion) Put a limit on spending and a way to do this is to use the simple term  ” Yes, with conditions”  Yes you may have this gift… the condition is a “B” average midterm… Ya I know… Christmas is for giving… ok…. Give initiative, incentive, caring and consideration… Again only the writers opinion.

A great way to make sure you don’t miss any payments is to set up your bills to be paid automatically through your bank. Most utilities, cable companies, and phone companies offer this payment option, and it’s a great way to make sure you don’t miss any payments.

Making all of your payments on time is very important, because late payments can have a negative effect on your credit score.

If you don’t want an automatic payment, it is also possible to pay your bills on-line, on the date due. For example, if your hydro bill is due on the 20th of this month, set up your on-line banking to pay the bill on the 20th of this month. Your payment is made on time, but the money stays in your account until the exact due date, so you may earn some extra interest.

Be careful with this, however, because if you’re not monitoring your account regularly, you could find yourself becoming overdrawn and hit with multiple overdraft fees from your bank.

The editors of credit-counselling.org have completed a survey of credit counselors, and we have compiled their top tips for avoiding debt this Christmas:

• Before you go to the mall, make a list of who you are buying for, and what you will spend and stick to it. Impulse buying is the number one cause of excessive spending at Christmas.
• Put some effort into your gifts. By thinking ahead, you may find that homemade gifts, pictures, or crafts are the best gifts, and often the least expensive.
• Leave your credit cards at home. People who use credit cards spend more than people who pay by cash or debit card, because credit cards don’t feel like real money.
• Don’t forget to include in your budget the extras, like gift wrap, shipping, and cards. As a bonus tip, stock up on all of these items after the holidays to save money next year.
• Shop early. Waiting until the last minute makes it very hard to plan ahead.
• Shop on the internet. Many web sites allow you to comparison shop, and they are a great source of ideas.
• Consider a gift pool with your relatives. Instead of buying for everyone, put everyone’s name into a hat, and just buy one gift for the person you get.

The holidays are supposed to be fun, so plan early, and make the holiday season enjoyable for all.