READJUSTING DEBT AND WRITING CONTRACTS

Article Tools

Image Gallery

Print

E-mail

Comments

RSS

Reported by several companies nationally, including TRW, this history sets a person's payment history: the record of whether the individual made monthly payments or not and whether the payments were made in a timely manner. A person with perfect credit has a credit report that shows that all monthly payments were made currently. A late payment is shown with a number, showing the number of months late the payment was made. The greater the number of late payments, the worse the credit report. Events such as foreclosures and repossessions are also noted.

So while the fact that a person filed for bankruptcy may appear on a credit record for as long as 10 years, a person may be able to reestablish credit to obtain a mortgage within two years. Of course, normal underwriting requirements must still be met, but, if after filing bankruptcy a debtor managed to save a large-enough down payment, established a good credit rating, and had a good job, he or she would stand a good chance of qualifying.

Finally, debtors often ask about the moral obligations associated with filing for bankruptcy. Clearly the decision is very real and personal. I remind clients they are free to repay clients later, when business gets better and the prospect of losing one's house or business passes. The difference is you send the check or money order when you have the ability to do so, not when someone else demands payment.

There is no one solution for debtors in this rapidly changing age. Bankruptcy may not be the answer to all of your problems. But more and more often it is being accept ed as a reasonable alternative in this changing world.

By Frank Brown

More Than A Handshake:
Contracts—Your Rights of Agreement

Which of he following five transactions are contracts: buying a newspaper, getting married, using your credit card, making a phone call, or sharing a car pool?

If you answered yes to all five, you were right. That's because each of those transactions falls within the definition of a contract, which is "an agreement upon sufficient consideration to do or not do a particular thing:"

Here's how that definition works out in a sampling of those types of transactions:

When you buy a newspaper, the sufficient consideration is the price of the paper. For it, the newspaper boy agrees to do a particular service-namely, hand over today's copy of the Daily Planet (or whatever paper it is that you are buying). If you shortchange him or if he hands over a copy of yesterday's Tribune, that's a breach of the contract.

RSS | Comments | E-mail | Print