Kids Starting a Business

Starting a business is a great way for kids to learn real life skills and build confidence.

To help your child’s success, have them follow the basic steps involved in starting a business by business professionals listed below. That will give them greater confidence and a better understanding of what they will need to do be a successful young entrepreneur.

Also, along with running a business, your child will need to understand some basic business math. See our business math category for subjects such as profit and loss.

YOUR CHILD AND BUSINESS

Interests and Skills
It is important to start a business based on the skills and interests of your child. For example, if he or she likes to entertain, then they should consider an entertainment based business, such as a clown at younger kids birthday parties. If they like to use computers, they might consider a business typing or creating documents for others. Here are some other ways that kids can make money.

Business Plan – Setting Realistic Goals
Every new business should start with a business plan. What are the objectives of the business? The business should have a mission statement explaining what the business is trying to accomplish. Also, the goals should be realistic. How will your child make money? What will be the costs? How much time will be needed. Will the business interfere with other aspects of his or her life, such as school, or after school activities?

Part of the business plan should include market research. Have your child study the market to see if there actually is a need for the product or service they plan on selling. Survey potential customers to see if they might be interested, and also how much they would be willing to pay. The more expensive it is to start the business, both in terms of money and time, the more important it is that your child do market research.

Does your child have the necessary financial resources to start the business? If not, would you be willing to lend the money? Let them know that if they are serious, and can put together a credible business plan, then you may be more willing to fund their new start-up.

Preparation
What skills will be necessary for the business? Does your child have these skills? If not, what type of training might be required? Information on learning different skills may be found on the internet, or at your local library. Friends and family are also a great resource. If possible, study the business from others who have done something similar.

Safety
Safety should always be the top priority, so your child should check with you regarding any businesses they are considering. This also includes always knowing where your child will be. For example, businesses where your child needs to go door to door in unfamiliar neighborhoods should be avoided. Children should also stick to age appropriate activities.

Start Small
Kids should not try to do everything from the start. Start small and have the child test the business on a few potential clients. Then check the results, and adjust the strategy if necessary.

Marketing
Your child will likely need to do some form of advertising for the business. Handing out flyers to prospective customers is one way to advertise. Mom and Dad may also know people who are prospective customers. Word of mouth is a great form of advertisement. If your child does a great job, others will find out and seek them out.

Financials
Is the business making a profit? They will need to understand that the business must make a profit at some point, unless the strategy is a charitable one. Remember, revenues minus expenses equals profit.

Evaluation
So how is the business going? Is it making a profit? Is it matching the goals set in the business plan? Is the profit worth the time and effort involved in running the business? Is it taking away from studying? These are all questions that must be regularly be asked.

Encouragement
Finally, be sure to give your child lots of encouragement as they begin their business. Remind them that lots of very successful businesses were created by people that failed their first few times. No matter what, learning new experiences, such as starting a business, will help prepare them for the future.

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Teens: Finding Your First Job

If you’re a teenager looking for your first job, a good place to start is in your own neighborhood. Many of your neighbors may have routine odd jobs like mowing the lawn, babysitting, even light housekeeping chores that you’d be perfect for. You may also want to look into retail jobs, food services (yes, that’s a fancy term for flipping burgers), and errand services such as pizza delivery. These jobs are good places to start a teen job search.

The trick is to act professionally, even if you’re only asking a neighbor if you can mow his or her lawn. What does it mean to be professional? Here are a few tips to help get you off on the right foot with any potential employer.

Dress up, not down. This is true whether you’re asking a neighbor for a job like babysitting or you’re trying to get that cool job at Abercrombie. Leave the tongue rings and nose rings at home when applying for any type of job.

Speak confidently. You don’t have to have any experience to land your first job, but you do need to make an employer feel as if you can be trusted with responsibility. So speak clearly and comfortably to show an employer you’re up to doing and trying anything.

Look people in the eyes. It’s hard to talk to strangers, especially when you’re nervous about applying for a job. It doesn’t help that teenagers have a bad rep for being, well, less than reliable. Looking people in the eyes will show that you’re confident and trustworthy. This is easier said than done, so you may want to practice by looking in the mirror before going to apply for your first job.

Take your time with any application you may have to fill out. Definitely do not rush through and make a mess on an application. When you’re anxious, it’s easy to rush and make mistakes that you have to cross out. While this is entirely understandable, it can send a potential employer the wrong signal—that you don’t pay attention and will make mistakes on the job.

Make sure you have your Social Security card, driver’s license, and any necessary work permits with you when you apply for your first job. Many employers will want to see these to verify your age and eligibility for work. They’re also necessary for an employer to make copies of if he or she decides to hire you—and hey, better to be prepared than not to be. (Don’t you just hate it that Mom was right—again?)

How Can a Teenager Find a Job?
To find a job, you need to put some thought and effort into it. Few people, teens or otherwise, are lucky enough to land the job they want without putting some time and legwork into it.

One of the first things you’ll have to do is to decide what type of job you want. If you’re looking for a part-time job in retail, then you will need to go to stores you’d like to work at and fill out applications or fill them out online. To do this, you’ll need to have some references (names of people who will vouch for you). You’ll also need to have their addresses and phone numbers handy to write on the application.

You will also need to have your Social Security number and any working permits necessary with you when you fill out applications. Practically any application you fill out will require this information, so having it with you will save you extra trips, or from losing out on the job opportunity altogether.

If you decided you want an office position of some type, then you’re going to need to write a resume and cover letter to send to employers. You can find great sample resumes and cover letters online that you can easily adapt to fit you and your experience.

Don’t have any experience? Don’t sweat it. Few employers will be looking for experience from their younger employees. That’s one of the reasons they hire entry-level people, so they can train them themselves. Just don’t ever lie on an application or in an resume, thinking it will help you get the job. Recruiters can spot a lie a mile away, and even if it slips through, you’ll likely get busted on the lie somewhere down the road.

Now where are some actual places a teenager can find a job?
Here is a quick list of places and businesses for teens to look for a job:

  • Classified ads in your local newspaper
  • Online job sites like Monster, HotJobs, etc.
  • Restaurants
  • Kennels
  • Veterinarians
  • Doctor’s offices
  • Bookstores
  • Music stores
  • Neighbors

Finally, don’t forget to ask your parents or your friends’ parents for job leads. Many times all it takes is a word from the right person inside a business to land you the job you want. Just be aware that when someone helps you get a job, you owe it to them to give the job nothing less than 100% of your effort. To do less will not only let your employer down, but the friend who helped you get the job as well.

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Ways for Kids to Make Money

One day, your child will need to earn a living. Kids can get an edge on the work world by starting early and in doing so they will gain valuable experience working with different people, learning about managing money, have some money to spend once they get older, or save for college.

A lemonade stand, mowing lawns, baby sitting, and doing odd jobs are popular ways that kids can earn money while learning some important life skills.

But first ask yourself, is your child ready to work? Do they have the time, and it won’t interfere with their school work? If they are ready, then here are some ideas for kids to make money.

Also, to help encourage saving, see our budgeting section for some helpful lessons.

JOBS FOR KIDS

Baby Sitter
If you child likes younger kids, then a baby sitter is a popular choice. Parents often need a good and reliable baby sitter to watch their kids. This position can be even expanded into a baby sitting service, by joining together a group of people who can offer baby sitting services to all the parents in the neighborhood.

Parents Helper
A parents helper is similar to a baby sitter. However, if your child is too young to baby sit on their own, then a job helping parents is a good opportunity. They can help watch someone’s kids, assist with the feeding, playing, or doing chores around the house. Later, once your child is older, they would likely have gained some references for regular baby sitting work.

House Cleaning
Instead of a parents helper, your child could simply do house cleaning. There are many chores that would be suitable such as vacuuming, dusting, etc.

Lemonade Stand
Everyone is familiar with the old fashioned lemonade stand. Of course, this is a seasonal business, depending on your location. During other times of the year, it could be a warm apple cider business — but be careful if your child needs to handle hot items. Also try selling coffee, donuts, snack bags, or other food items. If possible, set up a booth at a local community fair, or sale if allowed.

In addition to food, there is the possibility of selling other types of items. Is your child good at crafts? Then have them make their own artwork to sell. Sometimes, a combination of food and items makes a good business.

Car Washing
Car washing is a needed service in many communities. Have your child get together with a few friends to offer to wash local cars. As an addition to this business, they can sell items mentioned in the lemonade stand section above while people wait for their car to be washed. See what other professional car washes charge in your area, and price the services competitively.

Animal Caretaker
If you child enjoys animals, then try an animal caretaker business. This might involve walking dogs, dog washing, or general grooming.

House and Pet Sitting
If a neighbor is taking a trip or vacation, then taking care of their house and/or pets may be an opportunity. This may include watering plants, and any other chores they may need.

Landscaping
Cutting grass, weeding, trimming, planting flowers, and other landscaping jobs are abundant. Scan the neighborhood for homes that need landscaping services. In the spring, offer to plant flowers, or do winter clean-up.

Snow Removal
In the winter time, many people need to have their driveways or sidewalks shoveled. This job works best when a group of kids can work together shoveling several houses. Create a business, and make arrangements to shovel peoples houses before the snow storm.

Additional Ideas

  • Ask what kids can do in their own home, such as writing little stories that they can sell to their family and friends.
  • Kids can create their own jewelry to sell, or decorate interesting rocks.
  • Raking leaves.

Tips for Running the Business
For many of these jobs, have your child print and hand out flyers to be distributed in the neighborhood. As the business grows, references or work previously done could be quoted.

Giving out free samples is always a good way to attract business. For services, offer coupons for new potential customers.

Safety and Other Points
Most important for any of these jobs, is making sure your child is safe, so make sure they are old enough to follow important safety guidelines including:

  • Make sure you always know where they are.
  • Avoid going door to door by themselves.
  • Recommend that they do jobs that they like to do. Be sure they are mentally prepared and committed to do the work they need to do and promise to do.
  • If there is a cost in setting up the business, make sure they have enough money and know where the money is going to come from.
  • All these jobs should not interfere with normal school work or completing homework for school.
  • Help them set fair prices for the work they are doing.
  • Tell them to come to you for advice if they need it.

Member Tips

Here are some more tips and ideas sent in from our members and readers of this site:

  • I once did a lemonade stand, 25 cents a cup and I ended up with $35.00.
  • I think its better to either baby-sit or car washing or paper rounds and also you can help in some shops.
  • Yard sale.
  • Ways to make money – mow lawn, lemonade stand, sell cards, cars wash, garage sale, dog sitting, cat sitting, basically pet sitting, baby sitting, and rake lawns.
  • Asking to take your dog for a walk or clean the dishes.
  • Paper route.
  • When your working at a lemonade stand, always be polite. Give people their change, say thank you.
  • Kids can make cookies, cakes, brownies, etc. only with adult supervision.
  • Bird house builder, $2.50 per house
  • Create your own mechanic or fixing job. For example fixing broken bikes.
  • Hey your kids could earn money by walking dogs or how about helping out with the community as they pay good money for little kids to get involved but parents have to sign permission.
  • Kids could do face painting at a town fair or in their neighborhood. Also, they could sell their own artwork.
  • Kids can also look around the house for toys or any thing that hasn’t been opened. then they could sell the items in their town.
  • Window washer, car washer, lemonade salesman.
  • A child can maybe help the elderly unpack or unload a car full of things such as groceries or bags of clothes etc.
  • When a child starts their own business it takes them to a level of learning. Sometimes a parent should not help their child with their business so that the child can learn by themselves.  Give them a few pointers but do not do the work for them. You won’t help when they are an adult so don’t make your help a habit on your child.
  • When it is hot out buy a case of bottle water and take it to school and sell it for $2 each.
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Teaching Children and Teens about Money

It is never too early to learn about the value of money and how to budget and save. The earlier you can teach a child about earning interest versus paying it, the better prepared they will be to manage their own money.

There are different degrees of knowledge and responsibility a child or teenager can have regarding money. Here are some ideas, broken down by age group, on how you can teach money management to a child of any age.

Also, here is some more information on teaching money skills, and some helpful money worksheets, lessons, and lesson plans.

Learning the Value of Money

5-10 years Old
Young children love to collect and save pennies. They rarely learn to understand their value until they get toward the older end of this age range. To help them out, families can talk about the family’s budget together. This doesn’t mean worrying children about the bills or making them feel guilty for costing you so much. What it does mean is explaining that there is a certain amount of money that comes into the household and that there are some expenses, such as food, utilities and clothing that must be paid for from that money.

There is also a set amount (you don’t need to say how much) that must be saved for emergencies and future expenses. By setting up a “family piggy bank” you can illustrate what it is to save for something fun for the whole family.

Children who get an allowance should have it explained to them what they will be required to use it for. You can teach children to always put 10% or more of their allowance in savings, another amount toward a charity, and then the rest is for their spending. Let the children see when they earn interest on their bank accounts too.

11-15 Years Old
Children in this age group may have more opportunities to earn some money. If they are asked to feed the neighbor’s cat and earn $10, teach them again to put a percentage away into savings. This is also a good age to take the child to the bank and open their own savings account.

If the habit of putting money into savings each time they are paid is established early then it will be more likely to become a lifelong way of managing money. Allowances may or may not be tied into chores, but it is important that children this age understand the importance of “earning” their incomes just like Mom and Dad do. The allowance can also be approached as their share of the family’s income. Again it should be explained what they must buy for themselves from this income – music CDs, movie tickets, extra unnecessary clothing, etc.

16 and Older
Many teens have part-time jobs and can really understand what it means to earn a living. They will also be introduced to the concept of paying taxes. This is a good time to teach them to manage a checking account and ATM card. They can also be taught to plan ahead for major expenses such as their first car or education. Teens can become more responsible for buying some of their own clothes and other necessities. It will help them appreciate how much things cost and perhaps take better care of their belongings.

No matter the age of your children, they can be part of a family meeting to decide how some of the discretionary income is to be spent. Having a part in the decision making will help them understand the value of money and that there are often limits on spending so some purchases must be deferred.

Next, see our teaching money skills page for more information on teaching money skills.

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Business Credit: Your Best Asset Is Your Good Standing as a Creditor

Many companies do not realize the value of the “good credit” stamp until the stamp of “slow pay’ or “poor credit” is affixed to their business name. Your credit rating will affect everything from the discount you qualify for on credit purchases, to the amount of credit you may be extended by the bank.

Most of the same rules apply to businesses that apply to your personal credit. There are a few exceptions. Dunn and Bradstreet are the credit regulators when it comes to business credit, not the Experian Credit Bureau. Second, your D&B rating is a little more complicated than the personal credit rating, and is affected by almost everyone you purchase goods from. Small vendors, large companies, even the guy that sells you toiletries, can report your payment habits to Dunn and Bradstreet.

Once your rating falls to a certain level, it can take years to return it to an excellent rating, during the time between, many opportunities for discounts, extended credit terms, and even lower percentage rates on the interest your charged pass you by.

Let’s learn from example. Suppose you supply caps to local baseball teams, imprinted with their logo. You can turn around 300 caps each and every day, if you have all the supplies you need.

Day 1 (Friday): You are approached by the Braves baseball team about an upcoming tournament. They would like for you to supply every participating team’s caps. There will be approximately 40 teams, with 20 players per team. Now, that’s an order worth taking. The team captain for the Braves team tells you that he will know the final count on Tuesday; can you have the caps ready by Friday afternoon at 5? Sure, that should not be a problem. You have 300 caps in stock; you can order and have the remaining 500 in house by Tuesday morning.

Day 2 (Monday): You place a call to your cap supplier. You provide the style, size, and count that you need, and ask if that can be shipped today for delivery on Tuesday morning? This shouldn’t be a problem; you deal with this supplier all the time. But today, it is a problem. He has your account on hold, due to lack of payment. You haven’t mailed the payment for your last shipment. The only way he can send the caps will be COD (cash on delivery), and the order comes to $2,689.14. The only problem here: You won’t have that much cash until the baseball teams pay you.

Day 3 (Tuesday): You telephone the Braves captain to request advance payment. No way, the other teams aren’t even in town yet. You have no choice but to call the local bank and ask for a short-term loan. The caps arrive via UPS, COD, but you’re at the bank requesting a loan. You miss the cap delivery on Tuesday. You can’t get the loan until Wednesday after 12pm. No caps till Wednesday, no way to complete the order.

Does this picture paint for you the grim reality of poor or slow credit? Can you see the real dilemmas created just from a lack of organization and discipline? Your credit is a very important and useful tool. Protect it, use it wisely, and your credit can open doors, create opportunity, and pave the way for the success of your business.

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The Pros & Cons of Making Yourself Bankrupt — Chapter 7

To many, chapter 7 bankruptcy – liquidation – proceedings are the most punitive form of debt management/repayment. While it many not be too difficult to understand why some creditors might wish to opt for this process, why would a debtor want to undergo this process?

The following is a list of 5 pros and 5 cons as to why you may want to consider chapter 7 bankruptcy proceedings:

Pros
1. The #1 reason why most debtors are willing to undergo chapter 7 bankruptcy proceedings is because the process is quickly over. Now, this is not to say that the record of your bankruptcy doesn’t remain with you for years to come – it does – but, the average time it takes to go from filing the chapter 7 papers to the relief process is around 6 months. Other, more conventional debt repayment programs, on the other hand, can take upwards of 6 years.

2. Although chapter 7 proceedings sound punitive, most states allow debtors to keep those things are considered necessary for their work. As a result, if structured correctly, a debtor can gain exemptions from chapter 7 proceedings for a large amount of their assets – thereby making the process all the more convenient and less painful.

3. “Because I’m young”. Although chapter 7 bankruptcy proceedings do stay on your records for some time, this really only becomes and issue if you are middle-aged. The reason for this? Because, in this day and age credit agencies specialize in lending to those with bad credit records – so it’ll not be too long before you can get hold of more credit cards and consumer loans, albeit at higher rates of interest. In the meantime, having gone through chapter 7 means that your creditors no longer have a hold on any future payments that you receive – in the same way they would if you undergo either chapter 13 bankruptcy, or a debt management program.

4. Provided you don’t owe money on a type of debt that would survive bankruptcy proceedings, there’s no quicker way to put an automatic stay on payments to creditors who you cannot pay.

5. And finally, chapter 7 bankruptcy proceedings have no threshold requirement when submitting a filing – unlike other types of debt relief, which may well have such a threshold requirement.

Cons
1. The #1 flip-side to chapter 7 bankruptcy proceedings is that, unless you can exempt them as being necessary for your work, you’ll lose all of the assets you have worked so hard for during your life to acquire. While this may not be such a problem if you are young, if you are middle-aged with young children, this becomes a serious issue.

2. Closely following #1 is the fact that you’ll have ruined your credit history for the foreseeable future. Now, this doesn’t mean that you won’t be able to obtain credit, you will. However, in order to get this credit you’ll need to be paying high fees and interest rates. Also, the sums lent will, normally, be dramatically less than you were previously getting, so you may not be able to borrow money to buy things such as a car or house for a while.

3. Once done – that’s it. One of the problems of chapter 7 bankruptcy proceedings is that once you have undergone a chapter 7 bankruptcy, you cannot use this method of debt relief again for at least another 6 years. As a result, if within those 6 years you need to seek debt relief again, the option of a chapter 7 filing is out.

4. Even though you file for chapter 7 bankruptcy proceedings, there is nothing stopping the courts from converting your chapter 7 case into a chapter 13 case if the court either thinks you have enough disposal income to repay your debt under a debt management program, or your creditor can provide evidence for this. As a result, you are not really driving the proceedings, others are.

5. Finally, saving the best for last, even though you have undergone chapter 7 – liquidation – proceedings, some types of debt you have created won’t simply go away. For example, if you have mortgage lien, expect to still have the obligation to repay on this even after your chapter 7 process has come to a conclusion.

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Knowing your Debt Relief Options in Law

With one out of every seven households in the US today either in the process of bankruptcy proceedings or having just completed bankruptcy proceedings, it has become vital that anyone who is currently experiencing debt management problems understands exactly what their debt relief options are. Here we discuss debt relief, law, and your available options.

Overview
The first thing to understand is that bankruptcy proceedings are usually the last course of action that creditors will take when their debtors have not been willing to try and repay their loans. In short, bankruptcy is expensive, and there is no guarantee that the creditors will get repaid their money – usually they have to take what is commonly called a “hair-cut”, a reduction, on their debt amount. So, if you are only at the beginning of your debt management worries, then likely you’ll still have some way to go before bankruptcy becomes a real issue – regardless of what your creditors may be telling you otherwise.

Credit Counseling and Debt Management Plan
As with most things in life, when we have a problem it usually helpful if we take ourselves off to see a specialist and ask them for some advice on how to overcome this problem. In the case of debt management issues, this person is called a credit counselor, and he or she will usually put together a debt management plan with your creditors under which you’ll agree to make periodic payments to creditors in return for your creditors agreeing not to take any further action against you. This process is known as a debt consolidation – and in most case you’ll be asked to sign a legally binding debt consolidation agreement. Also, over the prolonged period that it takes you to repay the debt under the debt management plan, it is likely that the credit counselor will remain as your “debt/creditor agent”.

Bankruptcy
If your debt management problems continue to exist, and it becomes apparent that your plan is not going to be successful, then the time may well come when your creditors – fearing that you’ll have no assets left from which to pay them – may take bankruptcy action against you.

However, from a legal perspective, bankruptcy should be something which you try to avoid at all costs. If for no other reason than the fact that the stigma of bankruptcy last a long time – 10 years! During this time it will be very hard for you to obtain loans, housing loans, and car loans at anything close to market rates.

That said, if bankruptcy proceedings are unavoidable, then there are two types of person bankruptcy: chapter 7 and chapter 13. Both of these are required to be filed in federal court, both will require court fees to be paid, and both come with expensive legal costs.

Essentially the difference between chapter 13 and chapter 7 bankruptcy proceedings is that chapter 13 proceedings are effectively court sanctioned debt management plans. In other words, although you are legally bankrupt, you still get to keep the house, car, or any other assets you may have. You then have to try and pay-off all of the debt under the plan within a period of 3 to 5 years; following which you’ll be ‘discharged’ from bankruptcy (in much the same way as you are ‘discharged from hospital when you are physically sick).

Chapter 7 bankruptcy, on the other hand, is where all of your assets – apart from anything which you can show you need for work, such as your tools, etc. – are liquidated/sold and the proceeds are turned over to your creditors in repayment of your debt. Now here’s the kick: even though all of your assets have been liquidated/sold, you’ll still not be discharged from chapter 7 bankruptcy proceedings for a minimum of 6 years following the date your creditors receive the monies from the liquidation sale. So, this process is very punitive.

Alternatives?
Aside from debt management programs, chapter 7 and chapter 13 bankruptcy proceedings, you could also consider entering into contractual one-on-one agreements with your creditors. Here, in essence what you are doing is not so much admitting you have a debt problem, but rather asking your creditors to renegotiate the terms of your repayment. Of the three types of debt relief, this last one is most probably the most preferable to debtors – and the least likely one you’ll get.

Whatever the case may be, most states these days have specialist debt relief counselors, so make sure you talk things through with one of these before embarking on a process that could effect your life for a very long time to come.

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How to Choose a Bankruptcy Attorney

Most people find out the hard way how easy it is to fall into dept.  You have probably said to yourself “Oh what the hey, I deserve to splurge on myself from time to time,” to relieve your guilty mind about buying something you really don’t need and pay for more than you can afford. You’re not alone when it comes to over spending. Thousands of good families get into dept every year, and it doesn’t look like it’s slowing down. If it gets to the point of bankruptcy, you will likely need to seek the help of a bankruptcy attorney.

Here are some helpful suggestions on how to choose the right attorney for you:

1. The first thing you need to do is call your local bar association. They will help you with a list of bankruptcy attorneys in your area. While the bar cannot specifically tell you who to hire, they will provide you with the phone numbers of the bankruptcy attorneys that can help you with your specific needs. Bankruptcy is a specialized area of the law, this is why you must hire an attorney who is trained in this area of expertise. Make sure the attorney your hire is up on all the new tax laws. New laws are added and taken away every year it seems. Depending on what type of bankruptcy case you will be filing — consumer or personal, commercial or business will depend on what type of lawyer you actually will want to retain. There are also lawyers who specialize in agricultural bankruptcies.

2. Next, talk with a couple of your friends and acquaintances. When looking for a bankruptcy attorney, word of mouth is a good way to weed out the good and bad, however, in the end, this is your bankruptcy and only you really know what you need. Chances are very good that you know a friend, family member or colleague who has had to go through a bankruptcy. Find out what that person or those persons have to say about the lawyer or lawyers that they have used for their own bankruptcy cases.

3. An Internet search about the specific lawyers that deal in bankruptcy laws is your best bet starting out. Oftentimes when you find a good attorney search website, you can give your zip code of your area and the site will give you attorneys that deal in bankruptcies in your specific area. You have on your list of potential attorneys to assist you in your own bankruptcy case. By reviewing this information, you will be able to develop a clearer picture about the business and background of particular bankruptcy lawyers that you are considering employing.

4. You should have a list of attorneys by this time and now your ready to call a few attorneys and meet them. At least have a phone interview with a couple attorneys, doing this will scratch a couple off your list and narrow it down more. This will leave you with the runners up that you can take the time to actually meet face to face.

5. The final choice in how to find and choose a bankruptcy attorney involves making the decision to go with a particular lawyer. At this point in time, you will want your new lawyer to provide you with a specific contract that lays out what your lawyer will do for you, what services he or she will provide. In addition, you will want to make certain that the lawyer specifically lays out what he or she will be charging you in the way of fees and how those fees will be paid by you. In most cases, attorney fees that are given to you by your attorney will have to be approved through the bankruptcy court, so you will not have to pay your attorney fees up front.

Hopefully these steps will help you find what you need to get some order in your life back. These are just suggestions and are here to help those who need and want help. As a result, you may have the best possible chance to truly get your life back, hopefully this will be a lesson learned and if you are smart, you will never have to be in this situation ever again.

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Information about the 2005 Bankruptcy Laws

Over the decades Americans have become accustomed to finding debt relief in the form of bankruptcy. Each year, one out of every seventy-five households in the United States files bankruptcy.

In 2005, President George W. Bush signed the Bankruptcy Abuse Prevention and Consumer Protection Act; changing the laws that allow for debt relief of many Americans. This meant big changes for everyone, especially the average American Family.

The Chapter 7 bankruptcy is the form filed by most people and it wipes the slate clean of all debt except for most back taxes, alimony, child support and student loans. This type of bankruptcy may not be quite as effective in the future under the bankruptcy laws. Even though filing a Chapter 7 bankruptcy, the court looks at a person’s ability to repay, at least part of the debt.

With the bankruptcy law, there is a test to determine whether the filer will be allowed to void payment of all debt. If the amount of his or her income — net after expenses — is less than $100 a month, then Chapter 7 may still be used.

Should the test determine that you have enough income to pay at least 25% of your debt, you will most likely be required to file a Chapter 13 bankruptcy. Under this law, it is the Attorney that is responsible in determining which clients are eligible to file a Chapter 7 bankruptcy and which clients will be required to file a Chapter 13 bankruptcy. There are severe penalties to Attorneys that neglect their responsibility in this, and as a result, their fees will logically be elevated since they will be required to spend more time on each case. A bankruptcy that may have cost $400 a few years ago, will cost upwards of $1300.

There has been an additional change to the laws that will make the bankruptcy process very different for consumers, each person who files bankruptcy will be required by the court to go to credit counseling. The debtor will be obligated to provide a certificate of credit counseling and a repayment plan from an approved agency within 180 days of filing. Proof of completion of a financial management course is mandatory for discharge of a bankruptcy petition.

Though these bankruptcy laws are more restrictive than the previous laws, it does push people to watch their financial situation more closely than what they formerly have, and not to use bankruptcy to buy luxury items and drop payment by bankruptcy. It is a fact that the bankruptcy laws will change the way Americans live and spend.

With such tight bankruptcy rules it will become increasingly important for people to be careful of predator lending institutions. These high interest loan companies will drag you through the mud if you cannot afford to pay, and there will be no relief for you in the bankruptcy courts. The downside to this law is that it will only take one small mistake to put a bad mark on you that may haunt you the rest of your life. This law is likely to ruin many people’s lives, especially the young who have not yet learn to manage their finances.

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Life after Bankruptcy

Bankruptcy can be a devastating process for anyone. You may even feel like you have failed in life. The truth is, we are all human and we make mistakes.

Credit is like a fragile vase, once you drop it and it cracks, no matter how much you glue it back, somewhere, there will be a leak. No matter how hard you try to stay on top of your credit, something always seems to sneak through the cracks.

Bankruptcy is just one alternative out of several. It should also be your last resort, seeing that you can only file every 7-10 years. However, bankruptcy is the key to a fresh start. Life does exist after bankruptcy, and with a little advice and encouragement you may be able bring your credit to par and maintain it. There are several ways you can build your credit up and keep it that way.

After filing bankruptcy restrain from applying for any credit for at least the first year. Many people are not aware, but having several creditor inquiries on your credit report can cause significant damage to your credit score and credit reputation.

You may want to open an account with a credit union. Credit unions are said to be easier to establish credit with after bankruptcy. The money you would usually spend on credit cards and interest rates can now be invested into a savings account with your credit union. It is crucial to keep your account and reputation with credit union in good standings. Later on down the line, your credit union may be the first to offer you a car or home loan.

Make sure you pay all of your remaining and current bills on time. You don’t want to be in the same spot 10 years from now. Make sure all of your bills are paid on time. Not a day later. Besides, this is the whole reason your filing bankruptcy.

Try to keep all of your current dept below 30 percent of your income. Develop a budget plan, to make sure you don’t over extend your income, causing you to delay on payment.

If you follow these simple guidelines, you will find yourself back on track in no time. Life does exist after bankruptcy and so will your credit.

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Filing Chapter 7 Bankruptcy

Deciding to file bankruptcy will be one of hardest decisions you will ever have to make. Probably, one decision you thought you may never have to make. The reality is, in America thousands of people file bankruptcy every week. That’s an incredible amount of society in financial burden. No one wants to file bankruptcy, yet it may be the best decision to a fresh start. Nevertheless, deciding to file bankruptcy should be your last resort.

A Chapter 7 Bankruptcy also referred to as straight bankruptcy will stay on your credit report for 10 years. Before deciding to file bankruptcy, consider all of your alternatives. Most professional opinions state that you should only file bankruptcy after considering all of your alternatives.

Alternatives include finding a suitable budget, which would allow you to catch up on previous and current debt; debt consolidation, which a professional consultant will assist you with options and alternatives to paying your previous and current debts; and debt consolidation loans, which you can receive to pay off your creditors; however, not everyone has these options.

In order to get a debt consolidation loan, you will need a fare standard of credit. However, if you are considering bankruptcy, your credit may not be up to par. Debt consolidation may not be an option either. For one, debt consolidation in all reality is somewhat just as devastating to your credit as a bankruptcy and it may take you 10 years to pay off your creditor. Not only do you have to pay your creditor monthly, but you will need to pay the debt consolidation provider, as well.

Last, but not least, a budget is easier said then done. Before even considering bankruptcy, you probably tried once or twice to budget your finances. When your debt exceeds 60-70 percent of your income, a budget just may not work. However, explore all of your alternatives and maybe seek out professional consultation. Then and only then, if none of these alternatives rate suitable, should you decide to file bankruptcy.

Ultimately, filing a Chapter 7 Bankruptcy will be a decision only you can make. Conversely, filing a Chapter 7 Bankruptcy will give you a clean slate, giving you the opportunity of a fresh start in life. You will no longer have to deal with bothersome creditors and bill collectors contacting you daily. Nor will you have to feel the burden of limitation of money due to over exceeding bills. It is hard enough keeping up float with current bills.

Filing Chapter 7 Bankruptcy doesn’t have to be the end. Instead, think of it as a new beginning.

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The Problem of Unpaid Student Loans

Most governments recognize the importance of post-secondary education, not only for the students who work so hard to graduate from college or university, but also for the welfare of the country itself. An educated population is a valuable asset for any nation, as it ensures growth, prosperity, and stability. It is for this reason that governments are willing to provide financial assistance to students who are capable and willing to undertake post-secondary studies.

Many students take advantage of government loans out of necessity or for convenience. With substantial loans, they are able to complete their studies without the worry of a financial burden, knowing that when they graduate and find employment, they can then make arrangements for repaying the loan. Most students have every intention of paying off their debt as soon as possible after graduation. Unfortunately, however, many find that their plans do not materialize in the way they had predicted, and a number of unforeseen circumstances can prevent them from doing so.

One of the most common roadblocks facing graduating students is the time needed to find employment quickly after graduation. Some are fortunate to be called for an early interview that leads to the start of a new career, but many others need as long as six months or more to find the employment they are seeking. This can seriously affect their ability to make payments on their student loans.

Some graduates find employment with promising prospects, but their lack of experience means low income to begin with. Again, newly-employed graduates in this position can have difficulty establishing a loan-payment schedule. Government student loans usually contain a flexibility clause allowing repayments to begin six months after graduation, but in many cases this is insufficient, and other solutions must be found.

New graduates, whether employed or not, need to be cautious in managing their finances, and most have to find ways of reducing day-to-day living expenses. This may involve a temporary extension of their living arrangements close to the college campus, sharing with a colleague, or even boarding with parents until permanent employment can be found. If loan payments are still an untenable financial burden, some government-sponsored solutions are available.

The repayment terms of student loans sponsored by the government, like the Federal Stafford Loans, for example, can be modified in the case of difficult or unusual circumstances. Graduates who have not found employment, and have not yet begun to repay the loan may apply for deferment. If granted, repayment would not be required until circumstances were more favorable. This would be a minimum of six months, but it could be up to two years longer.

Graduates, who have already begun to make payments, but cannot continue to do so because of financial difficulty, may apply for forbearance. This would allow them to stop making payments for a specified period of time.

As there are several sources from which students may obtain special loans, it is not unusual to find students who have obtained funds from more than one source. This can add to the burden of repayment, and students in this position should consider making arrangements for a consolidated loan. This would certainly reduce the amount needed each month, and it would make repayment more manageable. The U.S Department of Education can make arrangements for this under the Income Contingent Repayment Plan.

Most graduating students are anxious to eliminate their debts as they begin a new life in the world of work. They should consider one of the many financial plans that have been designed to help them do so.

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