Credit bureaus are not infallible and neither are the creditors that report your credit history to the bureaus. Mistakes will happen, and often times the bureaus do not make it a priority to deal with these mistakes even when you bring them to their attention through their own dispute systems. That’s where credit repair agencies come in, but can credit repair really work for you?

If the information on your credit report is accurate, then there is not much that can be done to change it. However, as I mentioned above, mistakes will happen and it’s important that you keep up with your credit report and address the inaccuracies yourself first. The best time to use a credit repair agency is when there are items that prove difficult to dispute, especially if it involves life changing events, such a death in the family, a divorce, identity theft etc.

A lot can be recorded on your credit report during these events and it can get messy. These are the perfect situations for you to hire someone else to deal with this for you, and it is in situations like this that credit repair can be most successful if there are true inaccuracies on your credit report. You should hire a legitimate credit repair agency that can address these problems correctly and professionally. One thing to keep in mind is that entries that involve small debts will be easier to deal with, normally larger debts are much harder to dispute even for an experienced agency.

There are legitimate companies that can in fact help you repair inaccuracies on your credit report and they have been doing it for years, which is a factor you must consider when deciding which company to hire, how long have they been doing this? There are also a lot of companies that can not really help you do anything, but will be glad to take your money if you let them.

During the much needed research that you will do to find the right agency, you’ll more than likely come across a lot of different sources that advertise aggressively. Beware of the flashing signs and pop up ads that “guarantee” removing all negative entries from you credit report. This is just not possible if the information is true. You can’t hire an agency to repair your credit just because you don’t like what you see on your credit report. If you had late payments, defaulted loans, or filed bankruptcy, you should expect to see these entries on your report. Hiring someone to fix these entries will only prove to be a waste of money.

Back to finding a reliable company to hire for you credit needs. You need to scrutinize a lot during this process, and I’d like to give you the first source where you need to begin your research. The better business bureau (BBB) keeps record of companies who offer goods and services and makes it available to consumers so you can review their track record. Businesses register with the BBB because they want to show they’re committed to quality service. In a way you’re looking at a company’s resume or credit report if you will, when you research them via the BBB.

Enter the words credit repair in the search field at the above link and you may be a little surprised to find that there are only a handful of credit repair agencies that are registered with the BBB. The search results will also display credit repair companies that are not registered with the BBB. It’s possible that more of these companies that are not registered could also be reliable and provide good service, but I would start with those that are registered and have a track record you can study.

Inaccuracies or not, this may get a little expensive. But you stand to be more successful by hiring a legitimate company with a good track record that has a lot of experience doing this, so be ready and budget yourself carefully.

Are we already in a recession? I have been reading up on this subject and found different opinions on the recession issue. Many still think that we’re not, because technology companies like Google and Facebook seem to be hiring at a steady pace, while startup companies are still being funded, so these would be signs that things are going well or at least that there’s an upbeat attitude over all.

I’m not a doom and gloom kind of guy and I hate to be right when it comes to negative predictions, which I don’t often make. But we don’t revolve around a partially good economy, the housing crisis and sub prime lending mess are already here and they are costing millions everyday in defaulted loans. Bankruptcy cases are climbing and people are losing their homes and ruining their financial lives. I really do wonder what is going to happen with all those homes left behind when there’s no more demand.

So my findings tell me that while many economic experts believe we’re not in a recession, no one is denying that growth has slowed down everywhere and that to me signifies that a recession has started. Officially the National Bureau of Economic Research (NBER) will declare a recession when we’re half way through it. I fail to see the sense in that.

The only growth I seem to have any control over is my savings account and maybe my 401k if I keep up with it and make necessary changes when market conditions begin to move downward. I think we’re all thinking about the same thing right about now, which is “what’s going to happen in the next year?” Will we be in full recession and what will the Fed’s plan be to get us out of it. Will it be another drop in interest rates to encourage borrowing and spending again? I’m dying to know where we’re headed.

Till then all we can do to gain some protection is to adhere to more conservative spending. Only spend on true necessities and stash away the rest of your available cash, looks like it may turn out to be a tough winter. Many people will argue that this is bad for the economy, but does continuing to spend money really extend as something that’s collectively good for all? Do I really need to buy just to buy as long as it’s good for the economy? Seems very unfair to put that responsibility on consumers in a time like this.

If the root of your financial problems is your adjustable and high rate mortgage here’s some help. This is a forum for free foreclosure help called www.loansafe.org where some free resources have been made available for people who are facing this life changing experience. As you know the rate of foreclosures around the country has gone through the roof and they’ll probably continue rising through 2008.

The home owner’s tool box is filled with resources for ways to stop foreclosure, example hardship letters that you could use to contact your lenders, income and expense sheets and a bunch more. This site also has links to premium resources, but I would suggest you research their free resources first.

One of the biggest benefit to this, and you may not see this right away, is the forum itself. In this discussion board you’ll get the opportunity to your foreclosure situation, and read those of others. You’ll be able to ask others for their recommendations, and their opinions on the resources they have already used. All of this is done anonymously, so you don’t have to worry your privacy.

This is a very good starting point to begin digging yourself out of that pit of a mortgage loan that seemed like a good idea back then. Adjustable rate mortgages are the worst product for any homeowner in any situation and they are a major reason for the recent mortgage crisis. Back in 2002/2003 time frame, the advertising for these loan products was very aggressive and loan representatives and private brokers pushed and sold them as if they were good options for first time home owners who could not afford a conventional loan.

It’s this aggressive approach to lending that’s costing them millions of dollars in losses today, and leaving homeowners in the worst situations financially. Loan modifications are possible and while most lenders will be unresponsive to your requests, you need to know that there is help available to you to help you get through to them. So make sometime after work or on the weekend and check out this site, it may just have what you need to save your home.

Personal bankruptcy cases are on the rise. Hundreds of thousands of Americans declared bankruptcy in 2007 and the rate of filing has not slowed down in 2008. A tough economic state and lack of stable employment and job security are only part of the reason. Personal spending habits have certainly contributed to record levels of credit card debt and the current housing market has left many with high balance loans and depreciating values in many parts of the country.

Filing for personal bankruptcy is a tough decision and whatever the circumstances may be for you, it’s important that you educate yourself as much as you can and carefully assess your own financial situation before you proceed with filing bankruptcy. There are several types of bankruptcy that cover not only individuals but small and large businesses and of course special codes for corporations. Chapter 7 and Chapter 13 are the two types of personal bankruptcy and the most commonly filed, Chapter 11 is similar to chapter 13 though this is what an LLC, partnership or corporation would want to file.

This is a quick explanation of what filing bankruptcy is all about, what it does and the effects it can have on your financial future. Please check out the links above for detailed explanations on bankruptcy chapter 7, chapter 13 and chapter 11.

Please take note that none of content here is meant as legal advice nor is it intended to encourage anyone to file for bankruptcy. This option should be a last resort, there are alternatives to bankruptcy that you should consider before filing.

What is bankruptcy?

Bankruptcy is a legal proceeding in which people, companies or corporate entities who can no longer afford to pay their creditors, can get protection through a court order called “The Order of Relief”. Bankruptcy offers a fresh financial start and these benefits are afforded to all by federal law, therefore all bankruptcy cases are handled in federal courts. Bankruptcy puts into effect the order of relief also known as the automatic stay which stops your creditors from attempting to collect payments from you, that is until your debts are sorted out through court proceedings. The automatic stay is further explained in the Chapter 7 page.

During the process of filing bankruptcy you will need to provide specific documentation such as past tax returns, proof of income, a breakdown of all your debts, all property and assets you own, etc. It is possible to file your bankruptcy case alone but the paperwork is complicated and can be confusing. Hiring a law firm that specializes in personal bankruptcy cases is usually the best thing to do. These services aren’t always cheap though, and if you’re struggling to pay your creditors you may have trouble paying the fees for these services, which often need to be paid up front. So it’s important you prepare in advance and allocate some funds early on when you begin to consider filing bankruptcy.

There are a few chapters in the US bankruptcy code. Chapters 7, 9, 11, 12, 13, and 15. You will get a detailed explanation of chapters 7, chapter 11 and chapter 13 on this site since they are the most common forms for individuals, partnerships and small businesses. It’s easier for a bankruptcy attorney to determine which bankruptcy chapter you qualify to file, however by learning about what each chapter does and how they work you will get a good idea for which one will fit you best. Here’s some of the information you’ll need to provide before you file:

What happens after bankruptcy?

Neither one of these chapters will make it easier on your credit once you get a bankruptcy discharge. The difficulties after bankruptcy obtaining credit, renting a place to live, and qualifying for certain jobs will be the same. Unfortunately the fresh financial start can be hard to embrace when you file bankruptcy since it takes time to rebuild you financial life again. The hardships can continue if you do not prepare to file bankruptcy in advance. Normally after bankruptcy, most credit providers will not want to deal with you. The ones who will, can impose high interest rates and/or high security deposits because of your recent bankruptcy case.

When you file you will be required to take bankruptcy counseling courses, also known as credit counseling, from an agency approved by the US Trustee . You can find a list of approved agencies at this link: US Trustee Approved Credit Counseling Agencies. The costs are usually moderate, $20 to $30 dollars should be a good range to stick to. You will need to take the first part of this personal bankruptcy training before filing and then the second part before you get discharged.

Consider your case carefully and don’t forget that there are bankruptcy alternatives that depending on your situation may be feasible options to consider before going through with filing your case.

Should I file bankruptcy? What’s a good alternative to bankruptcy?

By now you know that filing bankruptcy should be your last resort. Coming up with an alternative to bankruptcy when you’re stressed and losing sleep can be difficult so here’s some help. But outside of what is listed here, whatever options you believe are possible, research and consider all options to decide whether that alternative is realistic and feasible for you. The following are some of the most common alternatives to bankruptcy:

Renegotiate with your creditors: This can be a successful bankruptcy alternative when dealing with unsecured debt, make them understand that if renegotiating is not possible, they will lose all the money you owe them if you have to resort to personal bankruptcy. This, as you know, is the case with unsecured debt under bankruptcy chapter 7, it gets discharged with no further obligation to you. Secured debt on the other hand will be a little more complicated but still possible. Your home lender or car financing company will know that they must wait around without your payments for months if you have to file bankruptcy. So they may listen to your case but are more than likely going to try to take you through a refinancing deal, which could actually accumulate other costs. So be careful there, this is a renegotiation that needs to benefit you the most.

Debt Consolidation Services: This also could work out well for your unsecured debt, but not all debt consolidators work the same so you need to shop around. You must also be careful with the terms of this deal, some debt consolidation alternatives will cost you more for the simple plan of grouping all your debts into one bill. Many of these agencies can really help, but there are many that only pose as non profit organizations for debt consolidation and are only interested in profit, so do your homework and research them before you agree to anything. You must insist on better rates and this can be an excellent bankruptcy alternative especially if your credit is still in good standing.

Debt Reduction Lawyers: Depending on your current budget this can be an effective bankruptcy alternative as well, since a lawyer would be much better at negotiating terms and rates for you, a creditor will likely respond better to talking to a lawyer than talking to you directly. A lawyer can deal with every single creditor for you and help you take advantage of special provisions and hidden laws and tricks that creditors don’t like consumers to know, but are legal. Your local yellow pages book will have tons of listings for law offices that can provide these services.

Professional Credit Counseling: One of the most common services to consumers and not necessarily a bankruptcy alternative in all cases. If you don’t see the end near you yet, but you see the direction your finances are taking and are uncertain about what to do to avoid collision, professional debt counseling could be what you need. A professional credit counselor is going to suggest drastic changes in your financial routines. They’re not going to ease you into these changes, they will most likely be very straight forward about what needs to change. It is up to you enforce these changes and make this alternative work or you could in fact end up filing bankruptcy

Other sources: Other sources of help may be possible, you may have volunteer groups in your area of perhaps you local church may be able to direct you in the right path. People in these groups are often able to help without charging anything if they offer services. Whatever option you choose, please take care not to simply borrow more money to repay debts, by doing this you’re simply shuffling balances around to temporarily satisfy debts, while accumulating debt in other areas, not really a good bankruptcy alternative.

Don’t let anyone talk you into taking out a line of credit on your home, especially if you’re dealing with unsecured debt. If you do this, you will have taken that unsecured debt and made it secured against your property. Most lenders will tell you this is a good idea. Their job is not to give financial advice, their job is to sell and they sell well because often people don’t know any better, so this is also not a good bankruptcy alternative.

If none of these options seem feasible to you for whatever your circumstances, then it is probably best that you begin your process by first consulting with a bankruptcy attorney. Get all the facts about your case. Not all cases are the same, the conditions will depend on what you owe, what assets you have and whether you’re employed or not. Consult with at least three different attorneys, most consultations are free and you’ll find that some law offices are more personable and more sympathetic than others. During this consultation take the liberty to ask your attorney for any bankruptcy alternatives he or she can recommend, again they may be able to come up with something you haven’t thought of.