Bankruptcy is the nuclear weapon of the financial world. This is the last resort or you can say the last tool to clear your debt. Before you file for bankruptcy, you should see if you could repair your credit to improve your credit score and the credit history. If you are badly in debt, it would be wise to meet a debt counselor for debt counseling. There are many credit agencies that would be willing to help you repay your debts by formulating a realistic repayment plan. Prior to filing for a bankruptcy, make an attempt to settle your outstanding debts through debt consolidation.
You should meet a reputed law firm that is well-versed in bankruptcy rules prior to filing for bankruptcy. You must realize that when you file for bankruptcy your entire credit history gets affected badly. This blemish remains on your credit report for the next ten years. Are you wondering whether you would be eligible for a home loan, personal loan or a new credit card? Bankruptcy is defined as a legal proceeding that is carried out in the bankruptcy court for the consumers and businesses to eliminate their debts to get a fresh financial start. The federal court handles all the cases of bankruptcy under the federal law.
Chapter 7 and Chapter 13 are the two laws that are followed when an individual files for bankruptcy. Under the Chapter 7 of the bankruptcy law, if you own a property, the state can lawfully liquidate the property to pay off the debts. If the bankruptcy is filed under Chapter 13, you can keep all your property but you have the responsibility of repaying the debts in monthly installments within a period of three to five years. Life has to go on even after you have filed for bankruptcy. Filing for bankruptcy is not the end of the world and life is not going to come to a standstill.
However, it is a fact that once you file for bankruptcy, you would be denied any type of loans because of the very low credit score and a blemished credit report. However, banks or financial intuitions will be willing to grant you a loan when they see that you are on the path of repairing your credit. Even then, the rate of interest on the loans would be high. Life after bankruptcy is not so difficult, if you learn from your earlier mistakes. You can curb your spending and have a monthly budget planned out. If possible you can take up a weekend job along with your regular job.
Make an extra effort to improve your credit score and continue doing the same until you are in the bracket of “Good Credit Score”. Obtaining home loans after bankruptcy can be a bit difficult because moneylenders or the banks are not willing to take the risk of having a bankrupt person as their customer. However, if you are ready to make the necessary rectification to your credit score by paying off the utility bills and the credit card bills in time, there is a chance of you getting a home mortgage loan. Take these tips into consideration.
After bankruptcy, ensure that all your payments are made on time so you do not have any delinquent credit report. When a bank understands that you are paying your bills on time, it would make them feel more confident and it is more likely you would be eligible for a home loan at a favorable rate of interest. Purchase a prepaid credit card. Use it only for buying groceries and to pay for gas. Ensure to clear off the entire credited amount at the end of each month. This will help to establish a pattern of good credit in your credit report and the improvement reflects in the credit score.
Meet a reputed debt counselor who can forward you to an experienced loan officer who specializes in subprime loans (A loan that is offered at a higher rate of interest. This loan is granted to people who do not qualify for prime rate loans). The loan officer would be in a posit
ion to advise you on home loans after reviewing your credit and job history, bankruptcy information and financial status. It is advisable to repair your bad credit to boost your credit score to increase before approaching for a home loan after bankruptcy. If you are in dire need of a personal loan, apply for a bad credit personal loan.
Though you have to pay a higher rate of interest on the loan amount, you can actually revive the credit score and improve the credit history by paying the monthly stipulated amount in time. Financial experts opine, if you have declared bankruptcy, you should apply for a bad credit personal in the shortest possible time. There are many lenders apart from the banks and financial institutions who would avail you of a bad credit personal loan. The majority of people who incur business debt opt to file a personal Chapter 7 bankruptcy and take in all of their personal and small business debts in the filing.
More often than not, there usually is no ground for an LLC or a Corporation to file a bankruptcy separately for the reason that – one the business cannot be ministered a discharge, secondly the trustee liquidates (sells off) the corporate assets condition to the fact that their worth is more than the debt amount to be paid by the business but this is hardly ever the case, and lastly it hands out official notice to business creditors that the business is closed, even though the creditors typically by now know that fact as explained by a bankruptcy lawyer.
The one the best benefit of a small business bankruptcy in a single personal Chapter 7 bankruptcy is that it lets you to save money by using one petition to discharge your personal debt; together with your personal guarantee of business debt, suggests the Minnesota bankruptcy attorney. After filing your bankruptcy, you will have to go to attend a 341 meeting also acknowledged as a ‘meeting of creditors’ more or less one month later. This is an important step for you to obtain bankruptcy maintains Minneapolis bankruptcy lawyer. After the creditor has a 60-day period to raise objection you will be given your discharge.