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Across the US home prices have come crashing down, making them affordable again, for anybody looking to buy a home that is. Prices continue falling gradually each month and in the turmoil some people see opportunity knocking, but is this going to cause a new surge in demand? Absolutely not. This is quickly turning into an investor’s market and while this may bring relief to cities and lenders across the US for unloading this surplus of homes, it won’t necessarily bring good to all.

Other financial sectors have been affected by the real estate crash and because the signs are too obvious that we’re in a down fall, for the most part consumers are keeping cautious about overspending.

This pessimistic attitude, which is not at all unjustified, can create a problem for the Fed as it has in the past. When the majority of the population views the economy as a sliding trend to disaster, the feeling can spread quickly across the nation like nerve cells. This forces rate cuts and more attempts to revive the economy by printing billions more of our already devalued green backs.

The federal government’s answer to stimulate the economy by sending out tax rebate checks is one that will prove negative. This is an attempt to raise the spirit and enthusiasm of consumers and get us all back in the habit of spending, but without a solid outlook of an economic turn around, there’s very little chance of this actually working its intent. The stimulus checks will be held on to or used to pay off debt and not much else.

Much of this negative attitude is based on the high prices of energy products like gas and electricity. Gasoline in particular has reached an unseen level and shows no signs of moderating by anyone’s efforts. This takes a major toll in the level of confidence that is expected to be induced by this petty plan of tax rebates.

There are several other metrics in between the real estate market crash and the rising price of oil and energy products that are in full force at debasing this economy. It’s not too far fetched to say that we could be reaching depression like levels of recession. The real estate market is in a sump that it can’t be dug out of for many years to come. The rising prices of fuel and the other ailing elements within this faulty economy are steering us all into this state and no agreeable plans to rescue the economy are yet available.

Stimulus checks? let’s get real.

Bankruptcy is going to leave a bad taste in your mouth for years to come, it’s a fact. If you have read the news lately, then you know that bankruptcy courts are working overtime to process the growing numbers of bankruptcy petitions being filed. This may leave you wondering now how to recover from bankruptcy after being discharged. Consumer bankruptcy has its advantages but there is a recovery period and the process maybe slow.

The fact of the matter is that it is now a done deal, you’ve filed for bankruptcy and you’ve been discharged and although that was somewhat of a relief initially, you are now facing a bleak future with your new credit. There are some things you can do for yourself to help you get through this and recover from bankruptcy in a progressive manner.

Reestablish credit with a bankruptcy credit card – It’s not that you can’t get credit anymore, it’s that you don’t qualify for a good rate. Because creditors who will consider your application are in fact taking a chance on you. So they invented programs where you can get a credit card again and this is an important move in recovering your credit. This is often referred to as a bankruptcy credit card, you just have to pay more on your interest rate. Much more sometimes. it’s not unheard of that creditors will charge anywhere from 19% to 29% for these types of programs. So do some digging but always shop around and try your best to get the best deal. Once you do get your new credit card, use it only for necessities and emergencies. Do not take cash advances unless it’s a true emergency and always pay on time. Reestablishing a positive record of credit transactions will begin the recovery process for your credit and soon enough you’ll forget that you filed bankruptcy.

Check your credit history often – This is something that a lot of people overlook, they think that because their credit is ruined they should not bother to check it anymore. You may find that your credit will have more mistakes after filing bankruptcy. Sometimes after bankruptcy some of your debts will remain recorded in default on your credit report, when they should be labeled “included in bankruptcy”, if this is the case then you need to take the necessary steps to fix this, because if the entires remain in default no one will ever lend you a penny. Also collections accounts may appear especially if your debts were sold to collections agencies and then your debts were discharged in bankruptcy. No creditor will ever bother to make sure that your credit is updated correctly and since they won’t be getting paid the last thing they’re going to do for you is a favor. So make sure you use the credit bureaus dispute systems to get these entries corrected. Next, you need to sign up for credit monitoring from one of the three credit bureaus for a fee or sign up for your annualcreditreport.com, for free, which you can only do once a year, but you need to get something.

Be on the alert for shoddy deals – Lenders will access public records to target filers of consumer bankruptcy, this is a well known fact because your bankruptcy file is public record and anyone can access them. They access these records so that they can offer you credit, auto deals, and even home financing. Often they will emphasize that your credit does not matter and they can finance anyone. You MUST be very cautious with these deals. They are geared to making lots of money from desperate people. This is not a good way to start recovering from bankruptcy. Read these terms carefully and ask all the questions you can and if it does not feel right to you then don’t do it. Keep looking and you’ll eventually find a creditor with a better deal, it’s a bit tougher and the choices are limited but you have to realize that you could be getting yourself into more trouble financially than actually helping your cause. Remember that always, these companies would not come after you if they didn’t have something very valuable to gain. They are never acting in your best interest.

Consult with professionals and get support – You don’t have to have a lot of capital to go to a financial planner, they’re there to assist everyone. After your bankruptcy discharge you should be clear of your some debts or repaying them under better terms, you should be on a tight budget and making sure your extra cash is going some place where you can’t touch it. You won’t always have the knowledge to know how to invest your money and you may not always know what kind of budget you should adopt to start making significant improvements, that’s why financial counselors are there. You won’t be able to recover from bankruptcy if you don’t adjust your budget considerably. It’s all about change and it’s all about looking back at where you were before and where you are now and most importantly what you can do to ensure your future brightens up. Consult a professional and ask them to work out a good reasonable budget for you and then stick to it, do not negotiate with yourself and do not compromise. This is how you’ll avoid bankruptcy again.

Think about your future and your family’s future – This also means setting goals, you may have had plans to retire at a certain age. You can still accomplish these things if you continue to work on your attitude about money. Bankruptcy is not the end, it is the beginning of something new. If you continually focus on the future you’ll naturally begin to take action towards accomplishing those things, but it must be a constant effort and your behavior with your money needs to show it. If you do not see yourself advancing in the right direction you can always stop and study your plans again and make the necessary changes. Always stay in touch with your financial counselor and bring up any questions or concerns. You should not be investing aggressively, you should be investing consistently to help you recover from bankruptcy.

Change your attitude and practice discipline - What you did before obviously did not work too well. Maybe you always thought that it was ok to buy things you needed on credit. Maybe you thought it was a good idea to finance your home with a sub-prime loan and pay interest only and maybe you only made the minimum payment on your credit cards. Since none of those things proved to be wise decisions and only lead you bankruptcy, it’s time to change your habits, change your way of rationalizing when it comes to making purchases from now on. There’s a difference between needing and wanting something, but we often make ourselves think that what we want is what we need. You had everything to do with the decision making process in your finances so start with that and change it completely. Bankruptcy protection is over with, if you end up in serious debt again, there will be nothing anyone can do for you.

Back in 2002 when I bought my condo, there were no obvious signs to me that what was going on in the mortgage market were the beginning stages of the current subprime crisis. I knew I was making the right decision to buy a place while I could still afford one and I saw how property values jumped significantly in the next two years. However, all along I had this feeling that this rapid growth of the market could not be normal and that it could not possibly benefit everyone. I also figured that at some point I would have to sell my condo and I would most likely want to sell it at fair market and maybe just a tad more.

Would someone really be willing to pay me double the price of what I paid for it a couple years ago? This really puzzled me, and even though I thought it would be great to make that much money, I couldn’t help to feel a little concerned for whoever ended up buying my condo. Would they finance with sub-prime or conventional loans? How will they manage such a large monthly payment? Will they continue to enjoy the market growth like I did?

It can’t grow forever, what goes up must in deed come down, and that’s what we’re witnessing here. It’s a nose dive of a decline for the housing market and it really is difficult to watch. The same thing goes for the stock market, there’s usually a period of aggressive growth that must eventually fix itself. I trade very moderately in the stock market so I keep up with it, but it’s definitely not a huge worry for me.

Though the housing market, which everyone is part of in one way or another, is now suffering from a subprime mortgage crisis, which in turn has an impact on the overall economic growth. As more mortgages default, there’s less confidence in buying homes, and we’re ending up with a surplus of homes across the country, causing a very dramatic decline in new home construction and prices of homes. All of this builds the downward pressure that weighs on the overall growth.

Interest rates on a number of subprime and ARM loans are due to go up through 2008. However, to the benefit of home owners who may be finding themselves on the brink of bankruptcy, the US treasury, backed by US legislators, is enabling the deferment of interest adjustments in order to begin working towards stimulating the economy and re-establishing confidence in consumers and financial markets.

To begin a resolution to the subprime crisis, one of the measures that can be taken in the future through legislation is to limit the numbers of different financial products that revolve around these types of loans and to force revisiting the metrics to qualify consumers for these types of loans. Salaries will need to keep up with inflation and unemployment needs to stay low. Finally, the housing market’s steady decline needs to be interrupted as soon as possible, but this won’t be possible without more aggressive efforts from the US treasury and the government.

Meanwhile, if you’re finding yourself in the same situation that millions of homeowners are in right now, where you’re not making your mortgage payment and considering bankruptcy. You need to know that there maybe alternatives available to you, banks and mortgage lenders are starting to resort to offering their customers loan modifications and or encouraging a short sale. Read more about loan modifications and other free resources here, it may be just what you need to save your home.

In part one of this post “Does credit repair really work? Part I” I talked about some of the situations in which credit repair can help you. Again, if your credit report shows negative entries that accurately reflect your credit history, it’s best not to begin a dispute with the help of an agency for it will only cost you time and money and the likelihood of those entries begin removed is very tough if the information is accurate. An honest and reputable company should be able to tell you that up front.

Credit can be complicated, most people are only concerned with learning the score system and know that as long as their score is above 620, they’re in good standing. But when your credit score drops because of real inaccuracies on your credit report, it’s best to get help to resolve and monitor your report from professional services. However there are things to be aware of when making your selection.

Credit Repair Scams – Because having bad credit and being in need of credit creates a bit of a desperate situation for some, there will always be someone who offers a service that can help. If you’re going to remember anything about this post, remember this: scrutinize a lot in this process. Ask a lot of questions and check the company’s that offer you services. Credit repair scams are everywhere, they advertise online, in newspapers and such. I personally would not trust a wooden stake sign written with a sharpie that says: “Credit Repair, fast and easy, guaranteed results 1-800-555-0000″ It just does not ring well to me and I see them everywhere here in Southern California. Learn to read these advertisements, the use of words like fast, easy, guaranteed, money back guaranteed and excessive use of testimonials can be a hint that these are not legitimate companies.

Ask the representative of the company to explain the methods they use to accomplish this, you need to know precisely what it is that they do. If they mention anything that sounds illegal, like changing your identity, or giving you a new social security number or simply disputing every negative entry regardless of the reasons they’re there, you might want to think twice about hiring them. The Fair Credit Reporting Act says that only items that are unverifiable can be disputed, if you did file for bankruptcy and you had late payments in the past, then these would be verifiable entries. Anyone who suggests that they can be disputed and removed more than likely has a less than agreeable method of doing this.

How does credit repair work? – Really there are only two ways. One is by simply contacting your creditors directly and conversing the situation with them about the entries they made being a mistake. This can work sometimes, but you must have proof that these are errors. No need to get into a screaming match with the creditors, that will not accomplish anything. Contacting the credit bureaus yourself is another approach, by using their dispute process. This will basically transfer the burden of having to verify these entries to the bureaus. This is an important benefit and you should use it. Here are the links to the dispute portals for each bureau:

TransUnion Credit Disputes

Experian Credit Disputes

Equifax Credit Disputes

Should these approaches fail, you need to consider hiring a professional firm to work this problem for you. Again in this process you want to be selective and concentrate on looking for companies that have the experience to take on your case. Their approach is similar to you disputing directly with the bureaus but a legitimate credit repair company makes use of legal procedures and creditors are more keen to listen and negotiate with them.

Selecting a credit repair company – This is one of the most important steps in the process of correcting those inaccuracies. Look for an established company with plenty of exposure that has a high rate of success and experience that can actually help you repair your credit based on inaccuracies. Don’t get sold on promises or silly guarantees. Read everything about them on their websites, do a search for the name of the company and see what other people are saying about them. Having a comprehensive range of services is a plus in any service I seek, and having a high quality ranking is even more important.

Begin your evaluation of these services by visiting the Better Business Bureau and becoming familiar with their rating system. Measure the companies you intend to use against these ratings and simply select the one with the best record.

LLCs or Limited Liability Corporations are legal business entities that offer limited liability ownership to its members, meaning that the owners or members are not personally responsible for the debts that the business incurs. At least in theory that’s the case. An LLC that finds itself in a situation where it is not being profitable and debts are running high, can also find relief in filing bankruptcy. However, it is often common that when LLCs are first formed, the owners don’t realize that they may have made themselves liable for the debts of the business by making personal guarantees for the debt that funded the company.

Normally lenders will use the Tax Identification Number of the LLC to extend credit. LLCs are not always profitable, especially when they’re first starting out, and in order for a lender to accept applications and begin processing the requested credit the business either needs to be profitable for the lender to proceed without any additional guarantees, of course these policies will vary by lender. When that criteria is different, normally the lender will still proceed with approval if the owners of the LLC are willing to make personal guarantees for the loans or credit lines. Often this is not explained in great detail or is in small print on the paperwork you sign.

Should this be the case with you, and you see your business taking a turn for the worse, you need to consider this option carefully before you continue with declaring bankruptcy for your LLC. This is something that’s often overlooked during the formation of such business entities. Again lenders don’t always emphasize this point because as long as they have good backing for their money, they don’t care who’s on the hook. So if your LLC files for bankruptcy this will likely extend to you, meaning you may also have to file bankruptcy, otherwise since the liability falls on you, you’ll have to repay the debts yourself.

Be 100% certain that you’re not personally liable for the debt before you proceed, review the paperwork you signed when your loans or credit lines were processed and see if your social security number appears anywhere on the application or approved paperwork.

Only when you find out the structure of the loans or credit on your business, you can begin addressing the problem with a new perspective. If your business debt has a personal guarantee then you should consult a bankruptcy attorney for a better approach to the problem. Your attorney will be able to study the paperwork more efficiently. In a case like this you would not want to prepare and file you’re own bankruptcy petition, you will run into too many obstacles and doubts and may end up filing the wrong paperwork or submitting the wrong information, which again only you will be responsible for.

At the very least consult with a bankruptcy attorney if you feel your LLC is in trouble and you need to get the debt sorted out. Your best option in this situation would be to file bankruptcy chapter 11, you can repay the debts of your business under more manageable terms while your bringing your business back to a profitable state.