Please tell me what you think about my assignment. Also, if you would improve my response by including your add-ins, it would be great. But ofcourse, I will have to rewrite it and reference you.
In this assignment we are asked,” If a good friend of yours has had serious financial misfortunes lately and is unable to meet her debt payments, what advice can you give? Be sure to include the topic of bankruptcy because she has heard that it eliminates all your credit problems. In your discussion, distinguish between straight bankruptcy and a wage earner plan. Use the Cybrary and other Internet sources to supplement your information”.
I would start by advising the friend to seek some credit counseling. Our text on page 163 recommends, (“contacting the Better Business Bureau or the chamber of commerce”). There are several warnings issued by the F.T.D. about private agencies promising to help clear up bad credit situations. There are probably agencies that are legitimate, but it seems clear to be careful before giving any money or too much information until you are confident you are not being taken advantage of. There may be a way that debt consolidation will help this situation.“ A debt consolidation loan makes sense if you have high interest rate debts, such as credit cards and finance company loans, and you have the ability to borrow at a lower rate”). If one is considering a debt consolidation loan they must watch for borrowers who have high interest rates, but look good to potential borrowers because of lower monthly payments.
If the above options are not suitable to help the friend in need, they may have to consider bankruptcy or filing chapter 13 also known as a wage earner plan. There are things to consider in deciding which option is best for each situation. A chapter seven bankruptcy or also known as a straight bankruptcy has positives and negatives. The chapter seven will give you a fresh start, meaning your debts will be charged off. The problem is your bankruptcy will be on your credit report for ten years, making it difficult to obtain new credit.
Choosing to file chapter thirteen, a wage earner plan will retain some or all of the debts and property and have a three-five year protection period. A Chapter 13 plan is a negotiated settlement between you and the people you owe money to (your creditors). It's a deal that you make with your creditors as an alternative to bankruptcy. It is also known as a Chapter 13 bankruptcy”). If one chooses to file chapter thirteen as apposed to chapter seven it does show potential creditors the effort made to regain good credit standing. However you only have three-five years of protection from the creditors, and are still strapped with payments.
Use the Cybrary or other online resources to help answer the following questions:
Is the International Court of Justice the first world court?
What are the procedures of the World Court? Are they similar to any US court?
What is an advisory opinion?
My friend is in a series of big problems. She can’t make her payments on time. The advice I would give her is to number avoid bankruptcy if possible because it goes into your credit file. Some auto dealers will not even accept anyone who has a divorce or bankruptcy note in their credit file. I would say, get with a debt consolidation agency to resolve all the debts at once without referring to bankruptcy. Chapter 7 bankruptcy which is better known as straight bankruptcy is where people who are in debt would distinguish all their debts while keeping ownership of some of the things they own and having a fresh start. It does get rid of all your credit problems but at the same time it creates a new note in your file to where certain creditors wont acknowledge you because you have a bankruptcy in your credit report. In the Chapter 7 bankruptcy, you will have to relinquish all the things you bought with credit cards but with limitations. The court can’t make you give up things you bought with credit cards as means for you surviving. If you bought any food with it, the court by law can’t make you give up your food. But at the same time when getting the bankruptcy, you are setting up a fresh new financial start. So, I would tell my friend to avoid it at all costs if she can. She would have to pay court costs and attorney fees as well to be granted bankruptcy. I would simply just tell her to get with a debt consolidation agency to work out monthly payment plans so that one monthly payment would take care of a monthly debt with all the creditors at once for that month. Once the person files for bankruptcy he or she is protected from having debts collected from the creditors unless they get permission from the court. In other words, the creditors would not be allowed to get payments from the person in debt unless they get the ok from the court (All Business, 1999-2010).
With the Chapter 13 bankruptcy which is also known as the wage earner plan, you will be mandated to make a payment plan to pay off your debts. Then you will have to deal with a trustee if one is approved by the legal system. The trustee will be required to take your payments and distribute them to the creditors and watch over to make sure you are complying with the payment plan. The debt consolidation agencies that are out there pretty much do the same thing, the only difference is they do not watch over to make sure you are complying. The wage earner plan is where you go before a bankruptcy court and file a chapter 13 bankruptcy. The person who owes the debt will ask for a repayment solution that will be looked over by the bankruptcy court and if this payment plan is agreed by the court, then a trustee will be called upon to make sure that the person who owes the debt follows the plan. The trustee will collect the money and watch over the person’s personal finances and give the funds out to the companies that the person in debt owes the money to. It is kind of like going through a debt collection agency. The person in debt will be asked to pay the trustee fee. The only way a dismissal of this is allowed is if the person in debt somehow gets back on their feet financially and can pay the payments all at once. This can only happen if this is done before it is too late. Someone can ask for this if they wish ask for time to sell certain items in order to get the money they need to make the payments in full before a foreclosure or bankruptcy is resolved. Now, during the wages of earning process the person in debt must come up with a payment plan for the debts that they owe. If the court agrees to this, then a trustee will be called upon to get the payments and distribute them to the people that the person in debt owes money to. The trustee will also be required to watch over the person in debt and make sure that the person in debt follows the plan and sticks with the plan. Now, just like the chapter 7 bankruptcy, the chapter 13 (wages of earning), the people that the money is owed to is not allowed to collect any payments unless they get approval from the bankruptcy court. The difference between the two bankruptcy types is the fact with the chapter 7, you don’t get a trustee and with the chapter 13, you do get a trustee, if the repayment plan is approved by the court of bankruptcy (Aaron Larson, 2002-2006). These are the two options here that I would recommend to my friend if selling things to get money to pay the debts is not sufficient enough to take care of the mess that she is in.
In your response, you have covered the main points of advising your friend who is facing financial difficulties. You have mentioned the option of seeking credit counseling, which is a good first step. However, to improve your response and add valuable information, you can consider the following:
1. Begin by explaining what credit counseling is and how it can help your friend. Credit counseling agencies provide assistance in managing personal finances, budgeting, and debt repayment. They can negotiate with creditors to lower interest rates or consolidate debts into a single monthly payment.
2. Instead of just mentioning the Better Business Bureau and chamber of commerce, you can explain what role they play in finding reliable credit counseling agencies. The Better Business Bureau and chamber of commerce can provide information on certified credit counselors who adhere to ethical standards.
3. To further enhance your response, you can suggest that your friend should research and compare different credit counseling agencies to find the one that best suits their needs. They should look for reputable agencies with positive reviews, accreditation, and transparent fee structures.
4. Regarding debt consolidation, you can elaborate on how it works and its potential benefits. Debt consolidation involves combining multiple debts into a single loan with lower interest rates. It can make debt repayment more manageable and may save money on interest payments over time.
5. When discussing bankruptcy, you have mentioned both chapter seven (straight bankruptcy) and chapter thirteen (wage earner plan), which is good. However, you can provide a brief overview of each and their key differences.
6. To improve your response, you can explain that chapter seven bankruptcy involves liquidating assets to pay off creditors, offering a fresh start but with a significant impact on credit history. On the other hand, chapter thirteen bankruptcy involves creating a repayment plan to pay off debts over three to five years while retaining assets.
7. Include a note about the importance of consulting with a bankruptcy attorney or financial advisor to help your friend understand the implications, requirements, and eligibility criteria of each bankruptcy option.
Remember, when rewriting and referencing any external sources, properly cite them to give credit to the original authors and avoid plagiarism.