Whenever a bankruptcy case is filed in a court (it can be under any chapter of the Bankruptcy Code) the automatic stay starts.

The automatic stay helps the debtor to protect his money or property from the creditor. Ones the case goes to the bankruptcy court all the lawsuits need to stop. A creditor is then prohibited to claim any property or money from the debtor until and unless the decision is made by the court. According to the chapter 13 bankruptcy the creditor is not even allowed to even ask money from the co debtor. The creditor or any third party trying to recover debt from the debtor is not allowed to make phone calls regarding the payment or have letter law suits. In fact, if knowingly they do, it is called contempt of court and they can be punished or fined for that.

The most important benefit that a debtor has is that if any property (like repossessed machinery, autos, money, tools, bank accounts or anything else) is ceased by the creditor then it has to be returned to the debtor.

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Certain circumstances can force an IVA program to fail. The most common reason is if you cannot afford to pay the agreed monthly payments. It is important to consider the consequences of this before you actually enter into a program.

An IVA program stands for an individual voluntary arrangement. It usually last 5 years, and is designed to reduce the size of you debt, making monthly payments that are well within the means of your salary. In short, its designed to reduce and tie up all your debts into one, affordable payment.

An IVA is a legally binding contract. This means that if you start an IVA, you are required to finish it. This is different to standard debt management plans, which allow you to opt out at any time without any repercussions.

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Bankruptcy is a toughest decision to make. But sometimes people go with this option due to unexpected expenses. Usually, people adopt this option when they are not able to pay back the money to creditors. Good bankruptcy information is difficult to find. Anyone can file for it such as individual, company, and organization. As per experts, it is a fruit which should be eaten properly and carefully. It could be a most important decision of your life, so do consult properly before filing it. If individual fails to pay the debts through debt consolidation, then he/she can file for it.

Bankruptcy can be divided into three parts or chapters, Chapter 7, chapter 13 and chapter 11.

Chapter 7 is the best option for those debtors whose income is below the median of debts and got unsecured debts. All unsecured debts like credit cards, unsecured loans, medical bills, education fees etc.

Chapter 13, this bankruptcy plan is applicable only those debtors who are earning sufficient funds from job. Courts create a payment plan for debtor where he/she has to pay a particular amount to court every month for terms of 3-5 years.

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Why do people who make a decent earning go broke? Why do people work so hard and yet come down to nothing just a few days after the months pay? Here are a few reasons and how to reverse this trend for yourself starting today.

1. Inability to Differentiate between Needs & Wants

Yes, you’ve got to live a good life but the ability to differentiate per time what is need and want will keep you from carrying an empty pocket and ending in desperation and debt. Needs are those things you cannot do without. For instance because the nature of my work, I cannot do without power and have to spend money on generating power when there is an outage. That is a need.

Wants are those things you’d love to have but do not make any significant difference in your life. For instance if you have 2 pairs of shoes, getting an extra pair because you have a weekend ball is a want.

Surprisingly, a lot of people focus on their wants and look for means to satisfy the desire for these wants and end up over spending every single month. The result is a dry pocket. Differentiate between your needs and your wants and work hard not to satisfy your needs unless you genuinely have extra left to cater for it.

2. Lack of Investment

One of the reasons why we invest is to prevent a dry pocket. The problem however is trying to invest with the overview of a quick turnover. Work at investing a certain percentage of your income every month on a long term asset or a long term investment programme that can work for your over time. For instance, investing in real estate every month, little by little is one great investment idea I love personally.

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