You are here: Home / Archives for Information

Getting Bankruptcy Loans in Your Hour of Need

May 20, 2011 By Leave a Comment

In certain quarters it is assumed that just because you file for bankruptcy, the doors to credit are forever closed to you. This is an erroneous assumption, people who have previously filed for bankruptcy can get access to credit if they take note of the sites covered here.

Just because you file for bankruptcy doesn’t mean you shouldn’t have access to credit anymore. The whole purpose of filing for bankruptcy is to allow people who have made serious financial mistakes learn from past ones and get on with their lives.

Bankruptcy loans are a good way to get along with your life and buy items that are really important such as a home.

There are two types of bankruptcy loans:

-Debt consolidation loan.
-Post-bankruptcy loan.

Debt consolidation loans usually exist to help people who have filed for Chapter 13 bankruptcy in order to pay off their credit. This way they can make monthly payments depending on their bankruptcy schedules. For people who have failed to learn how to budget, this may lead to a problem because they tend to end up piling more debt despite their financial situation.

For most people, the most common sort of bankruptcy loan is the post-bankruptcy one. This loan is purely meant for people who have handled the entire bankruptcy procedure perfectly well and who have proven that they understand how to handle their financial affairs.

Such loans are only available to people who have declared bankruptcy after it has been proven that their creditors have been completely paid.

When a person has filed Chapter 7 bankruptcy, a debtor should wait at least two years after the filing of the bankruptcy, before they can file for a loan. If it is a Chapter 13 bankruptcy then all the creditors must be completely paid before a loan can be applied for.

Repayment of your creditors and waiting for the agreed time to elapse before you file a loan application, doesn’t necessarily mean that you will be given the loan. Rebuilding of your credit line takes a certain amount of time as well as persistence and patience. While lenders tend to forgive past mistakes, a bad credit rating won’t do any good in helping out your situation.

In order to obtain a loan after bankruptcy, the best thing to do would be to prove that you are no longer a risk to lenders who want to give you money. You can easily do this by reestablishing all your credit by paying your bills promptly. You should try to properly maintain one credit card such as a major credit card or a store card.

Once you have established a responsible credit history, you can even request reference letters from your credit company as well as companies that you pay for utilities, in order to prove your financial responsibility to other lenders.

Rebuilding a bad credit history isn’t always an easy thing to do. No one owes you any favors to help your prove that you are creditworthy once more. Figuring out how to prove that you are creditworthy is an entirely personal affair. If you plan carefully and have a solid sense of budgeting, you can easily change a past history of bad credit into a good one, you should remember however that the onus of proof is entirely on you.

Filed Under: Information Tagged With: , , , , , , , , ,

Learning to Avoid Bankruptcy

May 20, 2011 By Leave a Comment

Most people aren’t aware of how to avoid the dire situations that land them into a position where they need to file for bankruptcy. These are some ways through which a person can learn to avoid dire financial situations.

To most people filing for bankruptcy usually seems like a quick and easy way which they can fix a big problem, but it usually isn’t. Bankruptcy may affect your financial life for more than a decade and it may prevent you from owning a home or a car and living the kind of life that you really want.

If your debt is crushing you, it really isn’t too late to change your habits and control your financial situation. These are ways that you can easily achieve this:

Get Control of Your Spending:
Statistics have shown that less than 43% of Americans have $1,000 saved in case of emergencies. The whole idea of living from one paycheck to the other isn’t safe, emergencies occur on a daily basis. Cars tend to break down and people can get injured or miss work for unexplained reasons. If you’re trying to cope with your bills, try thinking of the sorts of problems getting laid off from work could cause.
Everyone can’t put away a huge amount of their salaries but most people can afford to put at least between $5 to $15 weekly in a savings account. The best way to live under your means and stay free of bankruptcy is to create a spending plan which is workable and stick to that plan. Figure out the essential things such as shelter, food and transport. Find a reasonably priced home, car and cheap clothing that isn’t necessarily of the designer sort.

The whole point is for you to spend less than you make and this will require some form of sacrifice or the other. The level of sacrifice all depends on how far above your income, your spending goes. Once you have determined the necessary spending that you have to make, you should take a hard look at all you unnecessary spending habits. Limit your spending strictly to what you can afford so you can have some to pay off your debts and save in case of emergencies.

Most experts agree that a sound-spending plan should consist of the following ratio:

• 35% of your net pay for housing costs (rent, utilities)
• 15% for transportation ( car payments, gas, maintenance, insurance)
• 15% for debt (credit card payments, student loans, personal loans, etc)
• 10% toward savings
• 25% for everything else (clothes, food, fun)

If you follow this ratio, you can live a comfortable and debt free life which will save you from worrying about bankruptcy in the near future.

Debt Consolidation:
Maybe for you it is too late to solve your financial problems, you’re already neck deep in troubled waters and a financial raft is needed pronto. You can easily consolidate your debts into a single one term loan especially if you have home equity available.

Debt Settlement:

In certain cases, even home equity isn’t available. All creditors hate bankruptcy because it is hard for them to reclaim what is owed. As soon as bankruptcy, creditors will be happy if you can settle at least part of the debt perhaps 40% or so of the owed amount. Find out if this is possible

Credit Counseling:
Sometimes people end up in trouble financially because they aren’t any wiser. Credit counseling is a great way for such people to get their spending in check, they can easily learn how to live on budgets and handle debt settlement and consolidation easily.

Filed Under: Information Tagged With: , , , , , , , , ,

The Process of Filing for Bankruptcy

May 20, 2011 By Leave a Comment

The bankruptcy process isn’t as easy as ABC. Some issues concerning the filing for bankruptcy as well as other aspects are discussed in order to foster a better understanding of the entire situation.

Bankruptcy can be a long and tedious process and this includes the filing aspects as well. You have a lot of paperwork to handle and a number of problems to face but as long as you’ve decided that filing for bankruptcy is your hope to freedom, what else can you do?

Credit Counseling:
Under the Bankruptcy Abuse Prevention and Consumer Protection Act (“BAPCPA”) of 2005, every person filing bankruptcy in the United States is required to get some serious credit counseling with a counseling service that has been court approved.

A Big Decision:
Some people think that the decision to file for bankruptcy is the biggest decision that they have to make but they are usually wrong. The step after deciding to file for bankruptcy is usually the most difficult. Here you must decide the sort of bankruptcy to file for. You can either file for Chapter 7 bankruptcy which can clear all of your debt or Chapter 13 bankruptcy which is a repayment plan. Most people would wish to file for Chapter 7 but if you are doing this you must be able to prove that you make below the average income in the state which you reside, this will ultimately mean that you cannot repay your debt regardless of any repayment plan that the courts may come up with.

Hiring a Lawyer:
Paying high legal fees when you are trying to get rid of your debt may seem very stupid but even the experts agree that getting a good bankruptcy lawyer will save you a whole lot more in terms of not only your time but your money as well. They know the laws in your state better than anyone and may be able to advise you to things you would have never known about. Also, once you have retained the services of a lawyer, your creditors will no longer be able to contact you directly and will have to go through your lawyer’s office regarding issues of unpaid debt.

A Meeting with Your Creditors:
As soon as your lawyer has submitted the petition for your bankruptcy, the courts will schedule a date for your meeting with the creditors. The purpose of this meeting is to prove to your creditors that you have honestly answered all their questions and that you have a complete understanding of the bankruptcy procedure and how it will affect you in the future. The lawyer will also ask you to list out all of your assets so that your creditors may review them.

The Inability to Use Your Credit Cards:
Anyone thinking about filing for bankruptcy should stop the use of their credit cards with immediate effect. Any continued charging of items when the intent to file for bankruptcy has been submitted may lead to a creditor challenging your right to discharge any debt owed.

Liquidating Assets:
If your bankruptcy case is of the chapter 7 kind, the trustee will first determine if you have any assets which can be liquidated and used to pay any of your creditors. If the sort of bankruptcy that you are filing for is a Chapter 13 bankruptcy, you may be allowed to retain your assets if you can come up with a repayment plan of about 3 to 5 years, in order to repay the debt that you have.

Waiting For Your Creditors to Respond:
Your creditors are given 60 days after you initial meeting to challenge either your entire discharge or the discharge of a particular debt. If no lawsuits of this nature are filed, after the 60th day, you will receive a notification of a discharge of debt if chapter 7 was filed. In Chapter 13 bankruptcy, a discharge notice is given about two months after the final payment has been made.

Filed Under: Information Tagged With: , , , , , , , , ,