| Bankruptcy Myths (bankruptcy)
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Bankruptcy Myths
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Getting Approved After Bankruptcy
If you plan to apply for a loan, you need to do some homework beforehand in order to increase your chances of getting approved. A bankruptcy on your credit report is really a drawback, however, some lenders are willing to approve loans even if you have gone through a bankruptcy as long as it has been discharged and you can prove that you are to be trusted. To prove such a thing you need to make su... Read bankruptcy article
Buying a Home After Bankruptcy
In Texas, a bankruptcy can remain on your credit report for ten years. While this can make getting a loan and other types of credit difficult, it certainly doesn't mean that it is impossible. If you are looking for a way to boost your credit or if you want to take full advantage of the fresh start that declaring bankruptcy has provided, you may want to consider investing in homeownership.
... Read bankruptcy article
Bankruptcy Myths
People who have debt problems very often give in to unsupported myths and hearsay without ever taking the time to truly understand the law, and the implications of bankruptcy. So those people who have huge debt need to be aware of a couple major factors before running off to file bankruptcy on a whim.
It's common to hear that bankruptcy will affect your chances of getting a line of credit. In this market, many lenders are willing to take just about any chance due to the fact that the market has become so competitive. Naturally, the interest will probably be much higher, and the amount of credit much lower, but regardless, it is possible.
As for the chance at owning a home, it's been known for lenders to approve a mortgage in as little as 18 months after a person has filed for bankruptcy.
Here's how your bankruptcy can affect you and your money. Most of the savings and pensions are exempt in bankruptcy from your estate. Therefore these accounts are safe and will not be liquidated. If you have tax liens that are not paid, those are usually not forgiven. This is something that you should think about before filing for bankruptcy.
You should look for a a good financial advisor or credit counselor to help you form a financial planning strategy.
It's not easy to decide to file for bankruptcy. You've probably gone through a lot just trying to avoid it at all costs if you're like most people, but there comes a time when even trying to consolidate debt does not work. After every other option seems to be exhausted, it may be time then to find a good bankruptcy lawyer.
The best way to find a bankruptcy lawyer is through a referral. Perhaps from family members or friends who have done the same. They should be able to give you a good recommendation since they've gone through it themselves. If you have seen first hand through these people how the lawyer has conducted himself competently, then you can probably feel good about obtaining him for his services.
If there is nobody that you know to recommend a lawyer, or if you just don't to go asking around, then the local yellow pages under ''attorney' should help you find someone in your area rather easily. Be sure that the lawyer you choose can handle your case without the burden of an already tight schedule and heavy case load.
Once you schedule a consultation don't be afraid to ask him questions. He's there to help you, not scold you as it sometimes feels. Give he or she the details of your case, let him address the questions you might have, and find out what his fees are.
Now you're on the road to fixing your financial situation.
If you don't have a bankruptcy lawyer in mind, you may want to consult the yellow pages in your phone book. Bankruptcy lawyers are listed in a special section under "attorneys". When choosing a bankruptcy lawyer, you need to keep a few things in mind. You want to choose an attorney who does not have such a heavy case load that he can not handle your case. Try scheduling an initial consultation. When you meet with your potential bankruptcy lawyer, make sure to ask questions. Take time to discuss your case, address any questions you might have, and discuss his rates and fees.
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Bankruptcy Basics
Most people don't understand bankruptcy until they are faced with it. Even then, a lot of people still don't understand what is really happening. In the most general terms, bankruptcy allows a person having financial difficulties to wipe out his or her debt and start fresh. People file bankruptcy for numerous reasons: divorce, unemployment, death in the family, lawsuits, illness, medical bills, foreclosures and credit card debt.
Bankruptcy allows the creditor to receive a fair share of the money that the debtor can pay back, while giving the debtor a fresh start. There are two types of bankruptcy to fulfill this need: Chapter 7 and Chapter 13.
Under a Chapter 7 bankruptcy, all unsecured debts are wiped out. These debts include medical bills, legal fees, utilities, deficiency balances and credit card debt. The debtor may lose property to the court that will be sold in order to pay creditors. There are certain debts that will remain. By law, they cannot be discharged through Chapter 7. These debts include alimony, child support, taxes, certain student loans and debts from fraud, larceny and fines.
Chapter 13 bankruptcy helps people with regular incomes that wish to pay their debts but are unable to do so at the current time. With court supervision, a repayment plan is established between the debtor and his creditors that will pay the debts under an extended period of time.
In 2005, a new law was established -- the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. So many consumers were abusing bankruptcy. You may have heard of people simply filing for bankruptcy repeatedly. Some simply had their debts discharged and went out and bought until they were in the same situation again. Other consumers needed protection from unethical lenders. This law makes it more difficult for consumers to file for bankruptcy.
Before a bankruptcy can be filed, the debtor must enroll in a credit counseling session. Before the bankruptcy is complete, the debtor must complete a financial management seminar. The consumer will learn to budget, manage money, use credit wisely and the basics of consumer information. These classes aren't always free, some come with a mandatory fee.
Means testing will also apply to bankruptcy filings. The means test is an effort to force more debtors into Chapter 13. Any debtor who is able to repay 25% of what they owe, or $10,000, to his or her creditors will not be allowed to file for Chapter 7 bankruptcy. Basically, if the debtor is proven to be able to pay back a significant portion of his debts in the next five years, then he should be required to.
Financial advisors will tell you that bankruptcy should be your absolute last option. It will ruin your credit history. It isn't easy to be granted bankruptcy and it isn't easy to get over it. You should consider every available option before you decide to file bankruptcy. Often, you can go ahead and attend a consumer financial management class. Learn how to get out of debt and avoid bankruptcy.
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