'The world economy is experiencing a setback'
'There is a global recession'

Well, these statements are used very loose these days, but do we really know what happened and how?

Here is a small story to understand how economy works:

The Story>>

Once there was a little island country. The land of this country was the tiny island itself. The total money in circulation was 2 dollars as there were only two pieces of 1 dollar coins circulating around.

1. There were 3 citizens living on this island country. Anne owned the land. Bob and Chris each owned 1 dollar.

2. Bob decided to purchase the land from Anne for 1 dollar. So, now Anne and Chris own 1 dollar each while Bob owned a piece of land that is worth 1 dollar.

> The net asset of the country now = 3 dollars.

3. Now Chris thought that since there is only one piece of land in the country, and land is non producible asset, its value must definitely go up. So, he borrowed 1 dollar from A, and together with his own 1 dollar, he bought the land from Bob for 2 dollars.

> Anne has a loan to Chris of 1 dollar, so his net asset is 1 dollar.

> Bob sold his land and got 2 dollars, so his net asset is 2 dollars.

> Chris owned the piece of land worth 2 dollars but with his 1 dollar debt to A, his net residual asset is 1 dollar.

> Thus, the net asset of the country = 4 dollars.

4. Anne saw that the land he once owned has risen in value. He regretted having sold it. Luckily, he has a 1 dollar loan to C. He then borrowed 2 dollars from Bob and acquired the land back from Chris for 3 dollars. The payment is by 2 dollars cash (which he borrowed) and cancellation of the 1 dollar loan to C. As a result, Anne now owned a piece of land that is worth 3 dollars. But since he owed Bob 2 dollars, his net asset is 1 dollar.

> Bob loaned 2 dollars to A. So his net asset is 2 dollars.

> Chris now has the 2 coins. His net asset is also 2 dollars.

> The net asset of the country = 5 dollars. A bubble is building up.

5. Bob saw that the value of land kept rising. He also wanted to own the land. So he bought the land from Anne for 4 dollars. The payment is by borrowing 2 dollars from C, and cancellation of his 2 dollars loan to A.

> As a result, Anne has got his debt cleared and he got the 2 coins. His net asset is 2 dollars.

> Bob owned Anne piece of land that is worth 4 dollars, but since he has Anne debt of 2 dollars with C, his net Asset is 2 dollars.

> Chris loaned 2 dollars to B, so his net asset is 2 dollars.

> The net asset of the country = 6 dollars; even though, the country has only one piece of land and 2 Dollars in circulation.

6. Everybody has made money and everybody felt happy and prosperous.

7. One day an evil wind blew, and an evil thought came to C's mind. 'Hey, what if the land price stop going up, how could Bob repay my loan. There is only 2 dollars in circulation, and, I think after all the land that Bob owns is worth at most only 1 dollar, and no more.'

8. Anne also thought the same way.

9. Nobody wanted to buy land anymore.

> So, in the end, Anne owns the 2 dollar coins, his net asset is 2 dollars.

> Bob owed Chris 2 dollars and the land he owned which he thought worth 4 dollars is now 1 dollar. So his net asset is only 1 dollar.

> Chris has a loan of 2 dollars to B. But it is a bad debt. Although his net asset is still 2 dollars, his Heart is palpitating.

> The net asset of the country = 3 dollars again.

10. So, who has stolen the 3 dollars from the country ? Of course, before the bubble burst Bob thought his land was worth 4 dollars. Actually, right before the collapse, the net asset of the country was 6 dollars on paper. B's net asset is still 2 dollars, his heart is palpitating.

11. Bob had no choice but to declare bankruptcy. Chris as to relinquish his 2 dollars bad debt to B, but in return he acquired the land which is worth 1 dollar now.

> Anne owns the 2 coins, his net asset is 2 dollars.

> Bob is bankrupt, his net asset is 0 dollar. ( he lost everything )

> Chris got no choice but end up with a land worth only 1 dollar

> The net asset of the country = 3 dollars.

**End of the story**

Some Learnings >>

There is however a redistribution of wealth.
Anne is the winner, Bob is the loser, Chris is lucky that he is spared.

A few points worth noting -

1. When a bubble is building up, the debt of individuals to one another in a country is also building up.

2. This story of the island is a closed system whereby there is no other country and hence no foreign debt. The worth of the asset can only be calculated using the island's own currency. Hence, there is no net loss.

3. An over-damped system is assumed when the bubble burst, meaning the land's value did not go down to below 1 dollar.

4. When the bubble burst, the fellow with cash is the winner. The fellows having the land or extending loan to others are the losers. The asset could shrink or in worst case, they go bankrupt.

5. If there is another citizen D either holding a dollar or another piece of land but refrains from taking part in the game, he will neither win nor lose. But he will see the value of his money or land go up and down like a see saw.

6. When the bubble was in the growing phase, everybody made money.

7. If you are smart and know that you are living in a growing
bubble, it is worthwhile to borrow money (like Anne ) and take part in the game. But you must know when you should change everything back to cash.

8. As in the case of land, the above phenomenon applies to stocks as well.

9. The actual worth of land or stocks depend largely on psychology.

Author: http://www.Deskforu.com

About the author:
http://www.Deskforu.com is an innovative concept of 'Web desk' combined with powerful Pixel advertising. Our mission is to provide effective and economical ways for Internet Advertising.


Article source: Free Bankruptcy Articles.

F�r alle Betroffenen hier ein Musterbrief um die Kontok�ndigung r�ckg�ngig zu machen:

Absender Datum

An

- Rechtsabteilung -

Betr.: Beschwerde wegen K�ndigung meines Kontos Nr.

Sehr geehrte Damen und Herren!

Ich bin seit ........... Kunde Ihrer Filiale in .............. .

Am ................. wurde mir das o.g. Girokonto gek�ndigt.

Auf meine Nachfrage wurde mir keine / folgende Begr�ndung gegeben:

Gegen die K�ndigung lege ich hiermit Beschwerde ein mit folgender Begr�ndung:

Gem�� der seit 1995 g�ltigen freiwilligen Selbstverpflichtung des Zentralen Kreditausschusses, dem auch Ihr Institut angeh�rt, haben Sie f�r jeden B�rger auf Wunsch ein Girokonto bereitzuhalten.

In meinem Fall liegen keine in der ZKA-Erkl�rung genannten Hinderungsgr�nde vor.

Ich bitte daher um R�cknahme der K�ndigung meines o.g. Kontos und um Weiterf�hrung auf Guthabenbasis und setze daf�r eine Frist bis ................ .

Sollte dies bis dahin nicht geschehen sein, reiche ich Beschwerde bei der f�r Ihr Institut zust�ndigen Schiedsstelle in Berlin ein.

Eine ordentliche Klage, aufbauend auf der aktuellen Rechtsprechung, behalte ich mir vor.

In Erwartung Ihrer gesch�tzten Antwort verbleibe ich

mit freundlichen Gr��en

Ich hoffe es hilft Euch weiter. Gru� Micha
Schuldenberatung - Weg mit den Schulden

Author: Michael Karl

About the author:
M: Karl, owner of the site: http://schufafrei.singledad.de

Article source: Free Bankruptcy Articles.

Bankruptcy is a long and complicated process, requiring a lot of paper work to be done, which can be extremely stressful. The hardships experienced here can be amplified exponentially if the person filing for this 'status' has no idea on where to start. For the amateurs or those unfamiliar with the system of filing for such, bankruptcy questions run through their minds all the time. That's completely understandable, because I haven't heard of anybody that can walk through the entire process without difficulty. Some frequently asked bankruptcy questions include this: will my wife or husband be affected if I file for bankruptcy? The answer to that would depend on whether or not your husband or wife signed any agreements that directly tie her to the bankrupt accounts.

If she hasn't, then the answer is: no - he or she will gain 'immunity' to it, or in other words, he/she won't be affected. But that isn't the only factor that comes into play, because the 'rule' of 'immunity' does differ from state to state, therefore its best that you consult a lawyer specializing in this field before you start celebrating (for some strange reason). The next bankruptcy question that's ever so annoyingly asked is if the guy filing for it can do it on his own, and if he wouldn't need the help of a lawyer. The answer to that would be hell yeah! Yes - you can go about the process by yourself, that is if you know what you're doing, and aware of all the risks involved for not 'stating your case' properly.

If you don't have a clue as to what on earth you're doing, overwhelmed by endless paperwork, and what's going to happen, then it's best you hire yourself a bankruptcy lawyer. This is a guy that KNOWS what he's doing, everything that's needed to be done, and makes sure the 'flow' runs smooth and clean (unlike you). How much would hiring a guy of that profession cost? That's another one of those frequently asked bankruptcy question, in which I'll gladly answer: that'd depend on a number of factors, like who you hire, and where you're from, but the usual price ranges from 1 to 2 grand (US dollars).

Moving forward, for some reason, many people ask whether or not their student loans will be discharged. Here's the answer to that: you'd be lucky if they were. Many cases do not discharge them, and are usually only discharged in extremely pathetic situations of hardship. Hey, that brings up another frequently asked bankruptcy question, which is: what debts aren't eradicated when filing for bankruptcy? First and foremost, the debts which you don't list on the paper aren't eradicated (obviously). Other debts that aren't erased include the support you have to pay to your spouse after separation (not getting rid of her that easy), child support (them too), as well as tax debts.

Moving on to the last question, which is 'will I be selling my house if I were to file for bankruptcy?' The answer to that would depend entirely on the chapter you belong to, and the equity of your house. A lawyer can help you choose the best options that'd be in your favor.

Author: Rick Goldfeller

About the author:
The author of this article Rick Goldfeller is an underground Financial Analyst who has been successfully running campaigns for several wealthy clients. Rick finally decided to go public and share his knowledge and experience through his website http://www.finanzine.com. You can sign up for his free newsletter and join his coaching program.

Article source: Free Bankruptcy Articles.

When the modifications to U.S. Bankruptcy Code made it more difficult for people to declare bankruptcy and have debts forgiven, many consumer rights activists cried foul. The credit industry worked hard to get this passed, and at first blush, it does appear to work against debtors.

On the other hand, the changes did debtors a favor in some respects. By making it harder to seek bankruptcy protection, the new laws made it mandatory that those who might not need to declare bankruptcy go through credit counseling and enter a repayment plan if possible. The changes also revealed just how desperate creditors are to keep your debts from being written off completely. Armed with that knowledge, there are ways to avoid bankruptcy and right your personal financial ship.

Pennies on the Dollar

Everyone has seen or heard ads for law firms or other agencies that will work with creditors and settle your debts for virtually nothing. This can happen, but there are some caveats. One is that many such agencies are not reliable or trustworthy. If they are full-fledged law firms, they will have some oversight from the state supreme court's disciplinary counsel, as well as the local bar association. Even so, be wary and investigate before signing on with anyone.

Further, these agencies collect your money for a time without paying your creditors. Your accounts will get further behind while you pay them, knocking your credit score down nearly as much as a bankruptcy would. If you are struggling to make ends meet but paying on time or nearly so, this is a fairly unpalatable option.

Finally, to the extent that these agencies do help, you may be able to do the same for yourself. While some creditors are more willing than others to settle for lower dollar amounts, any of them would rather take something than nothing. Thus, if you are already that far behind, you might try saving yourself some fees that would be charged by the agencies by negotiating for yourself.

Credit Counseling

An adage that has been unfairly applied to lawyers is true in the area of credit counselors; 99 percent of them give the rest a bad name. Class action suits against these groups abound, and internet message boards are full of angry stories. A good credit counseling agency can help immensely.

The way such agencies work is to work out a payment plan with you based on what you can afford. They then apply it to paying off your creditors based on preset rate reductions. They are funded by the credit industry, which is a major turn off for some people. However, the credit industry pays them to do something that helps the consumer; they help you pay your accounts off, at a lower interest rate than you might get otherwise.

Again, many of these agencies are unreliable, paying late or not at all. Many creditors, upon your telling them you plan to work through a credit counseling agency, will try to talk you out of it for this reason. When they do, listen. You may be able to work out a better deal for yourself than the agency could. The creditors want to be paid to the extent possible; they have no incentive to ruin your credit by forcing you into bankruptcy.

If you do decide to go through a credit counselor, investigate first. Is the agency accredited? What complaints against them have been filed with the Better Business Bureau and how have they been resolved? Find a place you can trust.

Conclusion

There are ways to avoid bankruptcy in most cases. If you have lost everything with uninsured hospital bills, that is one thing. Being behind on your bills and overextended on credit need not push most people over that edge. Creditors want you solvent so they can collect something; you want yourself solvent so you can obtain credit again someday. The U.S. government wants you solvent so you can contribute to the economy. Look into your options and you will learn that you can usually find your way out of the bankruptcy hole before you hit bottom.

Author: Jeffrey Dean

About the author:
Jeffrey Dean is a copywriter for Yodle, a business directory and local online advertising company offering practical advertising solutions. Find more bankruptcy information at local.yodle.com/articles. Is Bankruptcy the End of the Road? Legal Advice You Can Use to Climb Out of the Hole

Article source: Free Bankruptcy Articles.

According to a report released by the National Bankruptcy Research Center, personal bankruptcy filings are up 34 percent in January 2009 as compared to January 2008. Compared to the previous month, December 2008, filings were up 4.5%.

These increases are no doubt a consequence of the current economic crisis. The National Bureau of Economic Research (NBER) reports that the United States' economy entered recession in December of 2007.

Traditionally, recession has been defined as two quarterly declines in gross domestic product, but the Business Cycle Dating Committee of the NBER has taken a more comprehensive approach to defining recession. 'A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income, and other indicators.'

Justin Berton, San Francisco Chronicle staff writer, wrote an article titled 'Economic Woes Lead to Bankruptcy Boom,' in the January 13, 2009 edition. He reports that membership in NACBA, the National Association of Consumer Bankruptcy Attorneys, has increased by one third in 2008 to 3,200 practicing attorneys.

In 2005 bankruptcy filings skyrocked to over two million non-business filings, due mostly to anticipation of the Bankruptcy Reform Act of 2005, which took effect on October 17, 2005, making filing bankruptcy much more difficult.

Those who were in poor financial shape had a strong motivation to file bankruptcy before the new law went into effect, rather than to try to work their way out of debt, since they would no longer have the insurance policy of bankruptcy after October 2005.

The Bankruptcy Reform Act of 2005 increased the amount of work it takes to file and decreased eligibility. Filers are also now required to take credit counseling and debtor education classes. Filings in 2004 had actually decreased to 1.56 million filings from the 1.625 million filings in 2003.

In 2006, predictably, bankruptcy filings crashed. Two effects were causing downward pressure on filings. First, filing demand had been cannibalized because many of those who would have, in the absence of the reform act, waited to file in 2006 were motivated to file in 2005 to avoid the restrictive new laws. Second, the restrictive new laws simply made many who previously were eligible to file ineligible.

What the credit card lobby took away through the Bankruptcy Reform Act, the tanking economy has given back. Many more United States citizens are now eligible to file bankruptcy, though no doubt, they're not happy about it.

Author: David B. Zwiefelhofer

About the author:
David Zwiefelhofer provides bankruptcy attorney services across the United States.
For help filing bankruptcy in Arizona, contact a Phoenix Bankruptcy Attorney. In Milwaukee, Milwaukee Bankruptcy assistance.

Article source: Free Bankruptcy Articles.

In Australia, after you are declared bankrupt, it is still possible to travel overseas during the period of your bankruptcy, provided that first you have obtained the written permission of your bankruptcy trustee to do so.

While this requirement may seem a bit daunting at first reading, in reality it need not be a serious impediment for you to do so, although in a media release dated 23/07/07 the government reported that prosecutions had been initiated where bankrupts had attempted to travel overseas without first obtaining permission from their bankruptcy trustee. No numbers were mentioned.

Overwhelmingly, over overwhelmingly the bankruptcy trustees seem to grant this permission provided that they are satisfied that the bankrupt is not trying to skip the country so as to avoid their responsibilities to the trustee in the administration of the bankruptcy.

Before permission will be granted you need to be able to meet any other current obligations to your bankruptcy trustee, particularly those that relate to any contributions that you are paying if your income is over the current Threshhold Amounts. These will have to be paid advance before you go. To determine this your bankruptcy trustee will want to know the details of your current income.

The official government line is that you need to have legitimate reasons for the proposed travel, for example, that the travel is for compassionate reasons or is a condition of your employment. I've never heard of any person not being given permission to go on the grounds that the trip was for a holiday.

I advise bankrupts to contact their trustee, in writing, about a month to 6 weeks beforehand, advising where you wish to go, the dates that you wish to leave and will return, and for some reason best known to the people who make up these rules, who is paying the fare? If someone else is paying, your trustee will need a confirming letter from that person.

Your will need to supply your trustee with an email address, telephone number and overseas contact address.

Then there's the big stick, and I wonder why they bother. The officials in charge also write that 'breaching a travel condition imposed by your trustee is also an offence under the Bankruptcy Act, with the penalty for this being up to 12 months imprisonment.'

In looking at media releases about bankruptcy prosecutions, I could find none reported in all 2007, and up to the end of September 2008 that related to bankrupts actually breaching travel conditions.

Author: Fred Appleton

About the author:
For more than 10 years Fred has helped people understand and deal with bankruptcy from the point of view of the person owing the money. Fred has helped thousands of people sort out their debt problems. From what people have told Fred, over the years, he is certain that bankruptcy can save lives and marriages too.
http://www.fredappleton.com.au

Article source: Free Bankruptcy Articles.