Drivers often assume that if they are involved in a car accident the at-fault party’s auto insurance will compensate them for all expenses related to their property damage and injuries. While ideally this would be the case, these days many drivers are insured with policies too small to cover anything more than a minor collision, explains a California personal injury attorney. Consequently, claimants are often left with enormous debts after the accident.

Why Are So Many Drivers Underinsured?

In order to ensure that all drivers have auto insurance, including low income ones, the state created the California Low Cost Automobile Insurance Program (CLCA). Through the program, low-income good drivers are able to purchase an affordable liability policy:

$10,000 in bodily injury liability per person

$20,000 in bodily injury liability per accident

$3,000 in property damage liability per accident

Such amounts are inadequate to cover the expenses related to a serious accident. If injured in the collision, a driver would only receive $10,000 for medical expenses, pain and suffering, and lost wages. In many cases, accident victims may require the care of a specialist, surgery, and months of physical therapy, which can result in hundreds of thousands of dollars in medical bills. If multiple parties were injured as a result of the negligent driver’s actions, the $20,000 in bodily injury liability will be divided among them. In addition, many minor, non-injury collisions can exceed $3,000 in property damage.

What Can Drivers Do To Protect Themselves?

In order to avoid incurring debt from an accident, drivers should carry collision and uninsured motorist insurance. All property damage-related expenses not covered by the at-fault party’s policy would be covered under the collision insurance, and the uninsured motorist insurance will ensure that medical bills exceeding the other party’s policy are paid.

Recovering physically and financially after a car accident is the best way to overcome such a traumatic experience. Considering the state’s high unemployment rate, the likelihood of being involved in a collision with an underinsured driver is quite high. Obtaining collision and uninsured motorist insurance will protect against falling into debt after the accident.

Additional information on car accidents and the injury claims process is available to the public free of charge.

To request a free book or article, or to speak with a California personal injury attorney, feel free to call 866-981-5596.

Debt is taking a severe shape in the post recession US economy. The credit card and student loan debt needs serious attention that has become a major issue is time of economic depression. The rise in the rate of job loss and unemployment is one of the important reasons for people filing bankruptcy. People are forced to enroll in a debt management program but the mushrooming growth in the scam companies due to the rise in the consumer debt. These scam companies are targeting the vulnerable debtors. Therefore, in this situation they should consult a law firm in case you are not aware of its benefit you can read through the article to get a better picture of it.

Know the benefits of hiring a law firm:

1. Most of the law firms offer debt counseling services. During the time of counseling the counselor or an attorney scrutinizes your financial situation. After analyzing your situation he will suggest you a debt relief program according to your current financial state. Hiring the services of a law helps you avoid the sigma of bankruptcy.

2. If you are financially crippled and left with no option than filing bankruptcy then with the guidance of a law firm you can file your bankruptcy petition effortlessly. According to your economic state it can propose settlement offer or ask you to consolidate your debt by providing debt management services.

3. As these law firms have a stable connection with most financial institutions so it is beneficial to hire the services of a law firms. Then you have higher chances of settling your debts successfully.

4. Law firms are reliable and help you avoid falling into the trap of scam debt settlement companies.

Important facts that you need to remember before selecting a law firm:

These are following things that you need to remember before choosing a law firm:

• Make sure before you hire the services of a law firm it is transparent in the dealing. If the firm is authentic then it will clarify your doubts and answer your questions.

• You can browse through the website of the law firm in order to understand whether it is reliable. Make sure you check the Better Business Bureau (BBB) rating of the law firm. The client feed back and testimonial by the clients of the past.

A law firm helps to reduce the debt of the people effortless, therefore hire the services of a law firm to attain financial liberty.

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If you are faced with credit card debt trouble, you can fortunately decide among several different solutions. Credit cards, which have always had a reputation for excessive interest levels, are the most common culprit of consumer debt. Unlike some other forms of debt, such as mortgages and HELOC, credit card debt has no silver lining like possible tax advantages. Since it is the worst form of debt and usually has the highest rates, consumers should eliminate it at the lowest possible cost and as fast as possible.

There are two routes to take when trying to get out of debt: either through a credit card debt relief company or by attempting to resolve the situation yourself. A debt relief company offers several solutions, such as credit counseling (better known as debt management), debt settlement (also known as debt negotiation) and bankruptcy (Chapter 7 or Chapter 13). In order to find out which approach you should take, you should first see if you can solve the problem on your own. Before doing so, however, consumers need to make certain that they have a sound and efficient strategy in place that they can follow through with. Plenty of consumers have failed to resolve their debt on their own because of a poorly defined strategy that did not involve making the most advantageous payments.

For example, the account that is charging you the highest interest rate should always receive the largest payment each month. For all your other accounts, you should just make the minimum payments. It is also important to be on top of all the due dates and to make sure you send all your payments by the due date. This strategy can be further enhanced if you are able to free up more money and allow yourself to make larger payments. Reducing expenses where it makes sense and finding other means of income, such as a second job, can do the trick. If following this strategy is still inadequate in reducing your debt, then you should resort to contacting a debt relief company. When you explore the solutions offered by these companies, you should first take a look at the most benign solution, credit counseling, before considering the riskier options, such as debt settlement and bankruptcy.

Please note that the above content is provided by our guest writer Luke Lee

It is not a simple process to get oneself out of debt. However, several options exist that allow individuals to reduce or even eliminate their debts. Before a person files for bankruptcy, which is rather damaging and can be more problematic than debt, other debt relief alternatives should be considered. As an example, the filing for either an unsecured or secured loan is a method by which a person may eliminate their debt.

There are several ways to reduce debt. Some individuals wish to avoid obtaining a loan when eliminating debt. In either case, it is not easy to reduce the debts and doing so can take extended periods of time. Due to high finance costs, it is possible that paying double the usual amount of monthly dues may not cause a reduction in costs. Regardless, these debt consolidation loans typically have lower rates and, therefore, lower finance fees than what a consumer would pay on their credit cards.

Unsecured Debt Consolidation Loans

These loans are given by financial institutions, such as banks and do not have property security. That is, there is no collateral attached. It is not simple to get approved for these loans as, if the individual has too much debt, lenders will not wish to approve the loan. However, if your credit score is high and you have a fairly high salary, it might certainly be possible to obtain an unsecured loan.

One of the biggest disadvantages of unsecured loans is that they typically have higher rates than secured ones. Since lenders are taking a risk when they provide a loan, individuals should be prepared to pay higher interest rates. Regardless, the rates are still much lower than the average rates of credit cards.

Secured Debt Consolidation Loans

A secured debt consolidation loan consists of collateral. In order to obtain a secured loan, the borrower will offer up a valuable piece of their property as collateral. Sufficient collateral may consist of a boat title or vehicle title. If the individual owns a home, they should consider obtaining a line of credit or a home equity loan in order to consolidate the debts. These types of loans typically do not necessitate a good credit rating although higher credit will mean that the individual will be offered a better rate. Obviously defaulting should be avoided when secured loans are possessed as this will lead to a complete property possession by the lender.

Debt has become a part of people’s living reality with a crumbling economy setting in. Dealing with hefty debts is not an easy task especially when your income has been curtailed to half and your necessary expenses have taken a mighty toll on you.

Faced with complicated debt issues, most people are resorting to debt relief options such as debt negotiation or debt consolidation in order to get themselves out of never ending obligations. Well, debt relief options simply abound. You can choose one and rid yourself of your debts quite easily. However, does the issue of debts simply end in paying off the obligations? Perhaps the answer is no. A wholesome debt relief will not only get you out of debts but also prevent you from getting into debt problems in future. If you are looking for a wholesome debt relief option, then the best thing you can do is get enrolled for credit counseling.

Credit Counseling not only helps you plan a debt relief but also prevents you from acquiring further debts that you will be unable to pay off easily.

When you enroll for credit counseling, the credit counselor works on your financial and debt issues in the following manner:

• Evaluates your debts and your financial situation.
• Guides you on how to tackle your money and debts.
• Devises a budget to help you with effective money management.
• Designs a debt relief method suited to your debt situation and budget. Usually it is planned so that your debt payments carry least interest and you can pay off your debts in about 3 to 5 year time.
• Educates you about how you should manage your money wisely and avoid credits as much as possible.

In fact, credit counseling could be quite safe and advantageous as a debt relief option as far as credit rating is concerned. The effect of credit counseling on your credit rating will depend upon how you intend to use the credit counseling service. If you opt for credit counseling simply to learn the tricks of financial discipline then your credit rating will not be affected in any way. However, if you sign up for credit counseling for any kind of debt relief then your credit rating will be affected.

Credit counseling services are offered on the internet, over the telephone as well as in person. You can choose the option that suits you best and take your first step towards a peaceful debt free life.

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Expensive life style and high standard of living has made people take up loan programs. When they are unable to pay back the loan, they often submerge in the pool of debt. There are many companies who offer help to settle the debt but often turn out to be unsuccessful. This article would share a few tips so that you can avoid falling into the maze of debt.

1. Prepare a budget
Plan out a budget program and stick to it. Allot a stipulated amount of money for your monthly expenses and the remaining amount can be transferred into the savings account. Budgeting prevents you from being extravagant. Ensure that your expenditure does not exceed your income.

2. Buy what is bare necessity
At times we buy things that are not essential for the moment. However, certain impulse drives us to purchase things that are beyond our budget. With the rise in the use of credit cards we have developed a habit of buying things on credit. Control the urge of buying things that you can

Bankruptcy cannot be far behind if you have not managed your finances well and if you don’t qualify for other debt relief options. When you are in debt, you may be exploring all possible ways to stay away from bankruptcy. And the fact is many options have come up that can serve as an alternative to bankruptcy. However, filing for bankruptcy is no longer a simple process. You have to be eligible to file bankruptcy. Earlier you could do so as per your convenience but according to the New Bankruptcy Law which became effective 17th October 2005, you have to consult a credit counselor before you can file bankruptcy.

Good credit score and bankruptcy cannot be simultaneous

When all other debt relief options have failed to get you out of debt, bankruptcy can be your savior. Undoubtedly, bankruptcy ruins your credit score and it haunts your credit rating for a period of 10 years but you have to compromise at some point. And getting fresh credit with favorable terms may be a far cry once you file bankruptcy. You cannot expect to file bankruptcy and simultaneously keep your credit score unscathed.

Filing for bankruptcy will not only help you to get out of debt but it will also allow you to make a fresh start financially. There are different types of bankruptcy but the most widely availed are Chapter 7and Chapter 13. In both the cases, your debts will be treated in a different manner.

How your debts are treated in Chapter 7 bankruptcy?

In Chapter 7, which is also known as “liquidation”, your assets are sold off by a court appointed trustee so that your creditors can be paid off. Not all assets are sold off; you are allowed to retain some of your assets. They are referred to as “exempt property” or property that is spared from liquidation. It can be your car, home etc. However, property that is not exempt should have enough equity so that by selling it, your creditors can get paid for your outstanding debts. There are state as well as federal exemptions and you can avail either state exemption or federal exemption but not both. Exempt property differs from one state to another. Not all debts are discharged when you file Chapter 7 bankruptcy. Usually your unsecured debts can beeliminated in Chapter 7 bankruptcy.

How your debts are treated in Chapter 13 bankruptcy?

When you file Chapter 13 bankruptcy, you don’t have to give away your assets or property. You will be given a debt repayment plan and you are expected to pay off your debts within a span of maximum 5 years. You are required to have a stable income that will enable you to pay every month. The repayment plan is valid once it is approved by the court. The most common types of debts that are consolidated in Chapter 13 include outstanding balances on auto loans, mortgage arrears, credit card debts, student loans and unsecured debts. As a rule, all outstanding debts should be included when you are consolidating debts in Chapter 13 bankruptcy.

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The incidence of bankruptcy filings and foreclosure is at an all time high and debt trapped people are taking all possible measures to wriggle out of the country’s “economic avalanche”, which has managed to knock out consumers from the driver’s seat. It is a well known fact that prior to the liquidity crunch, the economy of United States was consumer driven. Employment rate was high; taxes were quite low, even the real estate market was doing pretty well. Filing bankruptcy was infrequent and much easier.

The new Federal bankruptcy Laws that came into effect on 17th October 2005 changed the way bankruptcy is filed. Norms have become stringent and there are plenty of barriers you have to overcome in form of eligibility criteria. The Means Test is one of them.

Means test has been introduced so that people with higher income don’t file for Chapter 7 bankruptcy. Means test is applicable for consumer debts. Business debts are kept outside the purview of the Means test. If you fail to qualify for Chapter 7 bankruptcy, you can qualify for Chapter 13 bankruptcy. If you have a higher income doesn’t mean that you don’t qualify for Chapter 7 bankruptcy. Your expenses may be very high.

How does Means test in Chapter 7 work?

Means test was introduced so that consumers who are genuinely unable to repay debts can make use of Chapter 7 bankruptcy. Chapter 7 bankruptcy is the easiest of all bankruptcies and you can get out of debt within a very short time span by converting your assets into money and by paying off your creditors. In means test your expenses are deducted from your monthly disposable income. If your disposable income is very high you won’t qualify for Chapter 7 bankruptcy. Your income is compared to the median income of a similar household in the state you reside. If your current income is less than the median income you are eligible for filing Chapter 7 bankruptcy.

Use online calculators for Means test

There are many websites offering online calculators. You can find out whether you qualify for Chapter 7 bankruptcy or not with the help of the online calculators from the comfort of your home and office.

More and more consumers are opting for debt settlement as they are wrestling with their debts. Debt settlement is usually opted for when you fail to get the desired results from debt consolidation or you have not qualified for bankruptcy. Filing bankruptcy has become increasingly difficult after the new federal bankruptcy laws were introduced in 2005.

In debt settlement, the amount you owe is greatly reduced and if the debt settlement company you are hiring is capable enough, the amount you owe can get reduced by as much as 40% to 60%. A debt settlement company has always acted as the Good Samaritan but lately the Federal Trade Commission; state attorney generals have received several complaints against debt settlement companies.

The common complaint against these debt settlement companies is that these companies charge very high upfront fees and before they can deliver what they have promised, they want to get paid for the services. If a debtor is enrolling for debt settlement, the company helping the debtor in settling the debts has to be paid when the debtor signs up for the program. Alternatively, the debtor can make the payment when the program kicks off. However, the payment has to be made during the first few months of the program.

The incidence of dropouts of such program is also high. So, a debtor may have to shell out the entire money even if he drops out in the middle of the program. In order to do away with such anomalies, bill AB350 that is expected to regulate the modus operandi of debt settlement companies in California is “moving closer to passage”.

As far as paying upfront fees is concerned there is a “twist” in the bill which says “The provider