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Saturday, December 12, 2015

Bankruptcy in General

Bankruptcy: A Matter of Pride

Bankruptcy is a financial technique in which you declare that you cannot repay your creditors now or see a way to repay them in the future. Depending on your income and the amount of money you owe, an individual may declare chapter 7 or chapter 13 bankruptcies. However, in either case, bankruptcy is a fairly public affair. Your name and address will be published in at least one of the local newspapers for all of your friends to read, and your neighbors will see movers coming to repossess some of your items. For many people, the worst part of bankruptcy isn’t losing the money; it’s losing pride and dignity.

The first way to deal with this is to realize that most of your friends and family have gone through money problems at one time or another in their lives. Although they may not have resorted to bankruptcy, there is certainly no question that only the very lucky do not feel drown by debts at one point or another. Simply put, people will understand. Even though you may feel like everyone is snickering at you behind your back, the truth is that most people are actually empathizing with you.

Also realize that not everybody will realize you’ve declared bankruptcy. Most people do not take the time to read the newspaper that carefully, and even though word does travel fast, it is not a topic that most people will bring up because it simply is not that interesting. You might feel like you’re the headlining news, but in actuality, most people probably didn’t even know about it.

It is important to continue with the process, even if people do find out. If you are embarrassed, simply understand that so our all of people in this country who are going through the same thing. You are not alone. In fact, you may be able to get counseling to help you go through the bankruptcy process. You may be surprised at how many people have declared bankruptcy and gone on to be very successful.

If bankruptcy is the best thing for your family and your financial situation, it is most important that you continue with the declaration. Take care of yourself first, then worry about what other people have to think. The most important thing is not what your neighbors have to say, but instead what you are doing to get yourself bank on track financially so that your future will be brighter.

Bankruptcy and Divorce

If you believe that you and your partner are headed for divorce, and you both have a lot of debt between you, it might be a good idea to decide to file for bankruptcy before you begin to file for divorce. This will pave the way for the divorce to proceed much more easily because it will allow you to get rid of some of your debt and to clear the way for a clean break. If you can file for bankruptcy, then you can have a better idea of how to deal with the debts that do remain between the two of you. It will also mean that if your ex files for bankruptcy later on down the road, you can be protected because you are going to take care of your debts before the divorce.

The way it works is rather simple. When one or both of the spouses file for bankruptcy, all of the property that has been shared by both of them will become a part of the estate and will then be available to pay for the debts. This will also mean that you have been granted an automatic stay, which means that the creditors can’t hound you for money. Remember that this stay does not prevent you from getting spouse or child support from your ex. The next thing that will happen is that the bankruptcy court will decide what shared property is exempt from the bankruptcy, meaning that it cannot be sold in order to pay for your debts. Then, the divorce court can divide that property between you and your ex spouse.

If you are trying to negotiate property settlements, and also going through bankruptcy, you are going to be dealing with very complicated issues. Some of the debts that might be related to a property settlement might not be wiped out during the bankruptcy, so you will still need to pay them. However, these debts can be wiped out if you can show that you can’t pay the debt and still take care or yourself or your children, or that if you wipe out the debt it is going to be better for you than the harm that would be done to the people that you owe by not paying it. This means that if you think your spouse is going to consider filing for bankruptcy after the divorce is final, you need to make sure that your finances are squared away so that you aren’t going to be faced with any more debts.

Bankruptcy and Taxes

When it comes to bankruptcy and taxes, there can be several serious things that you are going to want to think about. If you are going to file for bankruptcy, you are going to want to make sure that you are doing everything you can to save yourself as much trouble, money, and time as you can.

You should know that any income tax debts might be eligible for being taken care of under Chapter 7 or chapter 13. If you are willing to file for bankruptcy, this is one of five ways that you can get out of tax debt. However, you should remember that in order to get your taxes discharged by filing for bankruptcy, you are going to have to meet certain requirements, so you should make sure you meet them before you file for bankruptcy to get out of tax debt.

If you file for Chapter 7, you are going to be able to get fully discharged of the debts that are allowable. With Chapter 13, there will be a payment plan that is required so that you can pay back some of your debts, and the rest will be discharged. Remember that not all of the tax debt that you might have is going to be discharged if you file for bankruptcy. You have to meet five criteria in order to get your taxes taken care of.

These five criteria that you need to meet in order to get your tax debt discharged when you file for bankruptcy are all important. The first is that the date that the tax return was due was at least three years ago. The second is that the tax return had been filed at least two years ago. The third is that the tax assessment is at least 240 days old. The fourth is that the tax return cannot have been fraudulent. And the fifth is that you are not guild of tax evasion. If you can meet all of these criteria, you are going to be able to most likely get your tax debt discharged when you file for bankruptcy.

Remember that filing for bankruptcy carries its own consequences, especially on your credit. You should not file for bankruptcy just to be able to get out of paying your tax debt, because it is going to do much more harm than good in the long run when it comes to the damage done to your credit. Only file if you have no other option and if you’ve been told that it is your best chance of beginning to rebuild your life.

Now, with the new laws that were passed in 2005, you will need to take some pre-bankruptcy debt counseling in order to be able to file a chapter 7. It has become law that you get counseling before and after filing bankruptcy.

The debtor must get counseling and certification from a non-profit credit-counseling agency before the forms can be filed for your bankruptcy.

You’ll need to take one or two sessions in order for you to find certification. With the certification you will be able to proceed with the bankruptcy filing.

There is work you need to do even before you get your pre-filing credit counseling certification. There are forms you will need to have filled out during your sessions.

The first is the income certification form. It will state your income and also it will show a fee schedule. Also, keep in mind that the budget form will also need to be filled out, but that form is very self-explanatory and easy to understand.

With these forms complete, and your certification now complete, you will need the non-profit credit counselor to fill out your affidavit and agreement for credit counseling. Your attorney will notarize the form, but you’ll also need to send it along with a coy of your state ID.

All of these forms must be presented to the court clerk before you begin to file your bankruptcy paperwork along with a notable fee.

You may be able to get this service online and even on the phone. Many companies will offer their service in the office, but they also are very flexible with the sessions. Once you have completed these steps, you are ready to file the paperwork with your bankruptcy court.

You will need to be prepared and understand what it is that you need to expect certain things to happen during the court process. You will want to keep in mind that another counseling session is a must in order for you to plan better for the future. You will want to keep in mind that the finical planning session will help you to get back on your feet and also plan better for your future.

Bankruptcy fraud

Even though a bankruptcy can sit on your record or on your companies record for a very long time, and even though it can make it nearly impossible for you to get loans, get credit or even do any large financial trading, there is still the factor that remains that once you have filed for bankruptcy, your debts are most likely going to be taken care of. This had led to many advancements in bankruptcy fraud, and has led in turn to a crackdown on this fraud by the government, which is going to hopefully be able to take care of too many different bankruptcies and get more and more people back on their feet in the correct manner.

Bankruptcy fraud can be done in several ways, and some of them are quite hard to catch. One thing that is done is when someone files for bankruptcy but really doesn’t need to file for it. They might hide most of their assets by giving them to others to own or hold, and by not disclosing them. This means that the assets that they do have are taken and sold, and their debts are forgiven, and once the bankruptcy act is closed, these people simply get their property back from wherever they had it, and they are in much better shape than they were before, even with the mark on their credit. If you have enough property and you hide it from the government, then even though your credit says you have filed for bankruptcy, you can still find ways to pay for things because you still have the assets.

Bankruptcy fraud is dangerous because it is hurtful to the people who file bankruptcy when they actually have to. Those that are filing in fraudulent manners are tying up the court system and are tying up the resources that the other people need in order to actually get their debts taken care of. This is detrimental to the whole process. It also isn’t fair to the creditors because if someone files bankruptcy and hides their property, the creditors are not going to get everything that has been owed to them and are going to find themselves out of luck. Because of the fact that bankruptcy fraud can be harmful to so many different people, the government has cracked down on it and now makes sure that being caught with bankruptcy fraud is something that is very punishable. It is also not easy to get away with in any way.

Chapter 11

When you file for bankruptcy, there are several types that you might want to file for. Each different type if made for different situations. Chapter 11 is a bankruptcy that happens when a business is unable to pay its creditors or take care of its debts. This is a federal bankruptcy that is filed with a federal court. A chapter 11 bankruptcy means that the business plans on trying to continue to be in business while it is filing. It means that the business is not going to go out of business, but that it is going to allow the court to reorganize its finances, including its debts and its contractual obligations.

With Chapter 11, a court can grand either a complete or a partial relief from most of the debts and obligations that the company has. This is done so that the company can begin again and can have a fresh start. What happens is fairly simple. The court will take the assets that the company has and divide them in order to payback its debts or its obligations. If the debts are greater than the assets, then the owners and stockholders of the business are going to end up with nothing. This means that their rights and interests in the company will be completely terminated. Then, the company is actually going to belong to the creditors, as a way of paying them back. This is the only way that the creditors can hope to get all of the money back that is owed to them, if the assets of the company are not enough to pay them back. It is done in hopes that the company will succeed in the future, and that the creditors will be able to make a profit off of it.

Basically filing for Chapter 11 means that you hope to keep the company in business. You hope that you are going to be able to find a way in the courts to sell off all of the company’s assets to pay back the creditors, and you hope that by doing so you are still going to be left with the company in the end. However, there is a risk that you are taking because if you can’t find enough assets to pay off your creditors, you are going to end up losing your company to them. The good news about this is that you are no longer going to be personally responsible for paying back your creditors. The bad news is that they are going to have your business and you are going to have to start from scratch in order to make your own living.

Chapter 15

There are several different types of bankruptcies, and Chapter 15 is only one of them. This is the function of bankruptcy when it comes to different countries. The reason that the United States added this part to the Bankruptcy Code is that a lot of the time what happens in one country regarding bankruptcy is often tied to either assets or information that can be found in other countries. When there are many different countries, and therefore multiple jurisdictions involved, things can get confusing. Chapter 15 can help to straighten these things out in such as way so that everyone know where the money is and where it should go.

Chapter 15 basically allows the US government and the bankruptcy courts to be able to get information about a company’s assets or a country’s assets. This is a good option for companies that try to keep some of their assets in another country so that they will be better able to file for bankruptcy. What this does is that it makes the proceedings for bankruptcy go much smoother and take up much less time and money than if there was no such thing as Chapter 15 to protect the assets of a company in general.

Chapter 15 sets up cooperation between the United States Courts and the foreign courts and representatives so that they can all take care of the interest of the person filing for bankruptcy together without having to deal with all of the red tape that goes along with filing for bankruptcy when several of the assets are located somewhere overseas.

It is a matter of discretion when it comes to whether or not the US courts will extend the assistance needed to the countries or companies in question. Most of the time, the US courts will have to take into consideration how the different jurisdictions relate to the matter at hand and what kind of action should be taken to get the bankruptcy done with as little trouble and drama as possible.

Remember that this is something that has been set up so that in general the process of gaining a bankruptcy and getting to take care of the assets that are overseas are easier to take care of. Most of the time this can be used in conjunction with the other filings of bankruptcy, because it is something that can be very useful to many of the individuals or companies that file for bankruptcy.

Corporate Bankruptcy: Where Does it Leave You?

Corporations can file for bankruptcy, just like individuals. Bankruptcy is the legal declaration that you cannot pay your debts. However, the problem arises when the corporation is a large public company that has given out thousands of shares of stock to different stockholders. If you are one of these stockholders, you may be wondering how this company’s bankruptcy will affect you.

Don’t worry—when you are a stockholder, although you own a tiny piece of the company, you personally are not financially responsible for the company declaring bankruptcy. You may lose a lot of money because the value of the stock might drop to zero, but creditors won’t be banging you’re your door asking for millions, that’s for sure! However, as a stockholder, you are responsible to continue to understand how the company is operating throughout the bankruptcy. You do have a small say and how it operates.

Companies can choose to file either chapter 11 or chapter 7 bankruptcy. Most choose to file chapter 11. This means that, although the company cannot currently pay off its debts, it is hoping that with some help and with reorganization the company can be profitable again. The company’s stock can continue to trade while this is occurring. Sometimes a trustee and creditors will handle the reorganization, and sometime the new owners will handle it. It depends on the specific situation.

In this case, when the reorganization plan is complete, you as a stockholder will get a vote. You should read everything sent carefully, and if you agree vote in favor. If you do not agree, vote against. Your voice does make a difference, because if enough people vote against, the company cannot carry through with the plan.

However, in some cases, this is not how companies choose to proceed. If the company is deeply in debt and does not see any chance for coming back from this debt, even after a reorganization, the company will declare a chapter 7 bankruptcy and liquidate. When a company liquidates, the trustee sells all of the assets to pay off creditors. For, secured debts are repaid, and then unsecured debts are repaid. If there’s any money left, it is split amount he stockholders, but this is usually not the case.

The bottom line is that bankruptcy is bad for everyone. It is important to follow the things happening in your company so that you are aware of things like this that could be on the horizon. The stock market is a gamble, and sometimes it does not pay off.

Debt Consolidation: An Alternative to Bankruptcy

Bankruptcy is when a person or business officially declares the inability to pay back creditors the money that was previously borrowed. This should only be done as a last resort, because bankruptcy will affect every aspect of your life. It will also affect your ability to get loans, mortgages, and credit card in the future. However, for some people, declaring bankruptcy means finding freedom once again. It wipes your slate clean so to speak, and you can start over again with your credit.

However, there are a number of things you should try before you declare bankruptcy. One of these things is debt consolidation. Deb consolidation cannot help everybody concerned with money problems, but for some, it is jus the boost needed to keep them from declaring bankruptcy.

Debt consolidation is basically taking all of your loans and paying them off using one large loan. You then have one monthly bill to pay instead of a number of smaller bills. This can save you money in the long run. Why? The one large loan will usually have a secured lower fixed interest rate. This is especially advisable if you are considering declaring bankruptcy because of high credit card debts.

Credit cards have very high interest rates—usually much higher than any other kind of loan. If you miss just one month of paying your card in full, you may never get back on track for paying off the balance. This can really start to add up if you find that you have more than one card. If you are far into debt, you can probably not get an unsecured loan from a financial institution, like a bank. However, you should be able to get a secured loan. A secured loan uses your house, car, or other possessions as collateral. With a lower interest rate, you can start making headway into your debt instead of simply making the minimum monthly payments. This will help you to avoid bankruptcy.

Consolidating your debts may not be the best choice for everyone. In fact, in some cases, bankruptcy is really the best way to get back on the financial fast track. However, it is important to realize that you have choices. If you don’t have to declare bankruptcy, avoid it and you will find that your life will be financially easier to handle in the future. It depends on your unique situation. Talk to a financial professional if you want more help learning about debt consolidation.

Doing Nothing and Avoiding Bankruptcy

Bankruptcy is the official declaration that you cannot repay your debts. This is used only as a last resort, when you have found no other way to get out of debt. For most people, this is not a good option. Bankruptcy can only be successful if you really have tried every other option and none of these options have worked. For some, bankruptcy might be the answer, but there are many options you should try first. One of these options is actually doing nothing.

Unlike most people think, you cannot simply be thrown in jail for not paying your debts. This only happens in extreme cases, like if you refuse to pay your taxes or don’t pay child support. As long as you pay these debts, there is not much a creditor can do to you. The key is, however, that you must live simply with only the basic needs until your debts are no longer collectable.

For example, a creditor can sue you for the debt you owe and take you to court. However, even if that debtor wins in court, which is most likely, he or she cannot take away your basic needs. Basic needs that cannot be taken include clothing, food, ordinary household items, like your bed and blankets (as long as they are not excessively ornate or valuable), and checks you receive for social security, public assistance, or unemployment. If you have nothing else, the creditor has nothing to take.

Be forewarned that you will not be able to save any money during this time period, nor will you be able to live with anything other than the basic human needs. If you start earning an income, anything you do not use for food and other basic human needs can be taken away. A court will decide how much your wages will be taxed.

After a number of years, the debt becomes uncollectable. The basic plan behind doing nothing is that you will live simply until this time arrives. It will probably be different for every debt you have, depending on what kinds of debts they are. However, after that time period, you can again start saving money, living more extravagantly, and even applying for new loans. Of course, you probably will not quality, but after seven years, all past debts are wiped clean from your credit history.

This method takes time and is not for everyone, but if you don’t want to declare bankruptcy, it is an option you have. Talk to a financial professional if you want to figure out the best course of action for you and your lifestyle.

Filing Chapter 12

When you are talking about bankruptcy in general, you are going to find that there are many ways to file for bankruptcy. In general, when you file for bankruptcy you are saying that you no longer have enough money to pay back your debts or to pay your creditors. If this is the case, you are filing for bankruptcy. The good news for you is that filing for bankruptcy is going to give you a fresh start. The courts will decide how your creditors are to be paid off, and you will no longer be in debt. The bad news is that it is going to reflect poorly on your credit for a long time. However, you will be able to begin to make money on your own that doesn’t have to go towards paying your debt, and this is good news because you are going to find you can start over again.

However, there are different practices when it comes to filing for bankruptcy, and there are different ways to file. These different ways are named after the different chapters in the Bankruptcy Cod of the United States Code. Chapter 12 is a piece of the code that is only available to family farmers and to fishermen who have gone through certain situations and end up with no money to pay back their creditors.

The Chapter 12 of Title 11 states that the bankruptcy filings of family farmers and fishermen are to be handled in a slightly different way than ordinary US earners. Chapter 12 has always been under fire, and was set to expire in 2004, before it was renewed and made permanent. It is similar to chapter 13, except for that it benefits the farmers and the fishermen.

The reason that family farmers and fishermen need a separate code to file bankruptcy under is quite simple. While most wage earners have jobs and businesses, many times the success or failure of farmers and fishermen can be completely out of their hands. Weather and natural disasters play a big part in whether or not a farmer or fisherman succeeds. Therefore, when a farmer or a fisherman is going to file for bankruptcy, these things need to be taken into consideration because there are going to be different allowances made for situations that are not under the control of the person who is filing for bankruptcy. It is all designed with the best interest of the parties involved in mind.

Filing Chapter 7

If you are going to be filing for bankruptcy, you might be, or be forced to be, filing under Chapter 7. If you are a business, this means that the business is going to be ceasing operations and having a Chapter 7 Trustee appointed right away, who will sell all of the assets and distribute the money to the creditors. It might or might not mean that the people who work for you will lose their jobs. Sometimes, when a company is sold off, it is kept intact or partially intact, and business might proceed as usual, simply with a different person in charge.

Chapter 7 can also be filed by an individual. This is going to mean that you can keep certain property that is exempt. However, some liens, such as real estate mortgages, are going to be kept intact. Any assets that are not exempt are going to be sold off by the trustee in order to pay back the creditors. This is going to mean that the other types of unsecured debts that you have will be canceled. Even though most other types of unsecured debt are canceled, there are some that you are still going to have to be responsible for. This includes child support, most taxes, most student loans and any fines or restitutions that you are responsible for regarding any crime you might have committed.

If you file for bankruptcy, you are going to be able to start again because most of your debts will have been canceled. Of course, anything that you have of any value will have been sold, so you are going to have to start over when it comes to that as well. Another disadvantage is that you are going to have a record of the bankruptcy on your credit report for 10 years. It might mean that you aren’t able to get loans or other types of credit, but this effect could happen just as easily with high debts.

There are some things that you should consider before filing for Chapter 7. There are some cases in which you can avoid being forced to file on the grounds that it is abusive. You might be able to opt for Chapter 13 instead, which means you can pay off all or some of your debts if you have more time, and if this happens you won’t have to have your property and assets sold off.

Filing Chapter 9

When you are going to be filing bankruptcy, there are several different types from which you can choose. One of the kinds of bankruptcy is called Chapter 9, and this is municipal bankruptcy.

This began in 1934 during the great depression. This was enacted so that municipalities could file for bankruptcy in the same way that individuals and businesses could. The purpose of filing for Chapter 9 bankruptcy is that it will provide a municipality that is financial distressed with protection from the creditors, and allow it to develop further and figure out a way to clear its debts. In the same way that other bankruptcies work, when a municipality has filed for Chapter 9, their assets will be reorganized in order to pay back as much of their debt as possible. With this type, this means that either the old debts will be extended in the interest of the debt maturities and that the creditors will still get their money, just at a later time. Sometimes, it also means that the interest or principal on the debts can be reduced. Other times, it means that the debt can be refinanced by getting a new loan that will cover all of the old ones.

The thing that is different about Chapter 9 is that there will be nothing in the bankruptcy filings that say that the assets of the municipality have to be sold or liquidated in order to pay off the debts. This makes it very easy for a municipality to file for bankruptcy and figure out a way to get out of debt without having the legal issues regarding differences between states and their internal affairs that should not be regulated by the government.

A person or a business cannot file for Chapter 9. Only a municipality can, which is defined under the code as “a political subdivision or public agents or part of a state.” This includes cities, counties, school districts, towns, and even public improvement districts. Also included under this definition would be bodies that produce revenue, such as bridge authorities, or authorities that deal with highways or gas.  When filing for Chapter 9 it is very important that you fit this definition because the specifics of Chapter 9 are meant only to provide this surface to a municipality, and not to just an individual or a business who is going through bankruptcy. It is designed to keep the country running as well as possible.

Often people consider using a bankruptcy because they have many questions regarding the future and also they wonder if it could be the best way out. You need to make sure that you realize that the bankruptcy will stay on your credit report for years. You will still be able to achieve credit, but it will affect your credit number.

One of the most common questions about bankruptcy is about your current credit cards and also your credit for buying a home or another big purchase.

If money is owed on a current credit card, then it must be listed in your bankruptcy forms as a debt. These forms are filed under penalty of perjury and if fraud is detected, your bankruptcy case can be discharged.

Something that you will need to consider is that perjury is a federal crime. You may end up fined or in prison if you falsify any of the documents that you clean in your bankruptcy case. As for your cards, you’ll find that if you don’t owe the company anything, then you don’t have to list it and you can keep it.

But this doesn’t necessarily mean you will get to keep your card. Your company may cancel your account as a precautionary measure.

Also, you’ll need to keep in mind that credit is available to other who files a recent bankruptcy, but the thing is you will end up paying more in interest rates.

But it is not necessarily a good idea to start up right away with those credit cards. Usually it is what gets people into trouble in the first place. It is also important to avoid credit repair scams.

The fact that you will not be able to get a loan for a home in the next ten years after filing bankruptcy is false. Usually after two years you should be able to qualify for a loan. It will stay on your credit report for quite some time, but often, it is taken into consideration and you are given a loan on good faith.

Keep in mind that when it comes to bankruptcy you will want to look for other solutions, because you need to find someway of getting your individual and business financial obligations.

If the right steps are taken from the beginning, you can keep yourself and your family out of financial trouble and away from bankruptcy.

You will need to start off by educating your children. Many of us growing up weren’t presented with the tools and knowledge to establish and maintain good credit and keep away from the scare of bankruptcy.

You should be honest to your children about your finances, but also need to be able to guide your children to make the right decisions in the future. Teaching children that hard work, no matter the job, has its rewards and if you spend on a budget, there will never be a fear of bankruptcy.

You’ll also need to establish a budget in order to keep bankruptcy from happening. You cannot spend what you don’t have. Many people today have multiple credit cards and are in essence spending money they don’t actually have, plus more for interest.

You also don’t want to pay off the credit cards with another credit card. This is just an awful chain reaction that will not get you anywhere. You’ll need to spend what you can afford and only what you can afford.

But you will want to make sure you have something socked away for an emergency. You will find that that it is a good idea to have at least two thousand dollars set aside for just in case purposes.

It is another step to take to keep out of financial trouble. Probably the most important thing though is to watch your bank account. Don’t allow yourself to be in a situation where you overdraw.

Keep in mind that there are so many people who rely on the overdraft in order to keep them financed each month, but you will find that your actions are destructive to your credit report but they are also The fact is more than a third of adults rely on their banks overdraft to keep them going on a month-to-month basis. Such actions are ones that lead individuals on a path to bankruptcy.

How to get a Mortgage After Bankruptcy

Declaring bankruptcy can be a great tool if you find yourself drowning in debt. Bankruptcy is meant to help people who just cannot find another way out. It allows you to use all of your assets to pay back as much as possible over a set number of years are all at once and then start anew. When you declare bankruptcy, you free yourself from creditor and collection agency phone calls and have the chance to start over again with a fresh slate.

Well, almost. When you declare bankruptcy, it appears on your credit history that you took this action. Bankruptcy means that your lenders probably did not get back all of the money you owed them. Therefore, if future lenders see that you have declared bankruptcy in the past, you are considered to be a very high-risk candidate, because you might not have changed. Getting a mortgage after bankruptcy can be especially difficult, but there are ways to go about doing it.

First, building up credit—good or bad—takes time. If you declare bankruptcy, you effectively wipe out your credit history. However, that includes any good credit you may have had as well. Therefore, you have to start from scratch. Just like a mortgage lender would consider a young adult a high-risk candidate because he or she has little credit history, you too will be considered a high-risk candidate. You can explain to your lender about how you’re going to change until you are blue in your face, but a more effective way to do that is to prove it. Build up your good credit again, and wait about two years before even considering approaching a lender regarding a mortgage.

You can also use special government programs to help you get a mortgage. Some will work with you to put less money down on your new home and to convince a lender that you should qualify, even if you have declared bankruptcy in the past. If you have a solid income now and are working to pay off debts, you can probably qualify for some of these government programs.

You can also use your current home as equity to convince a lender that you should qualify. The less money your want to borrow, the less risk you are to a lender. Therefore, if you can pay for the majority of your new home by selling your current home, your lender will be more likely to overlook the fact that you’ve declared bankruptcy in the past.

The real lesson here is that bankruptcy should not be declared lightly. You need to make absolutely sure it is the best option for you. Bankruptcy should be your last resort financially, because it will make it difficult to do things like get approved for a mortgage or a car in the future.

Is Bankruptcy Right for you?

Bankruptcy is a financial practice that allows you to officially declare that you cannot repay your debts now and do not see how it will ever be possible in the future. Declaring Bankruptcy is a big step. For some people, there are other ways to get out of debt, like debt consolidation or negotiating with your lenders. However, if your best option for getting out of debt is bankruptcy, than you should take steps to make this financial situation work in the best possible way for you. A financial profession can help you do that. In any case, before you jump into anything, you need to fully decide if bankruptcy is right for you.

First, it is important to learn as much as you can about bankruptcy. For individuals, chapter 7 and chapter 13 are the two types of bankruptcy that can be filed. There are other options for businesses and entities. Learn the difference between the two so you can see how they work. If bankruptcy is right for you, you must be aware of your obligations and your lenders’ choices.

Once you have learned all you can about bankruptcy, take a moment to consider other options. For example, you can consolidate your debts into one large monthly payment. If you are considering bankruptcy because you just barely miss paying off your bills on time every month or if you feel overwhelmed by credit card debt, this may be a great option for you. You can also try doing nothing and living simply for a number of years, which works well if you have no family for which you are responsible. Another options is negotiating with your lenders. In the end, there are many different options other than bankruptcy, so make sure that your second step is to consider them all.

Next, check out the requirements for eligibility for declaring bankruptcy. If your debts are too high and your income too low, you probably will not qualify for chapter 13 bankruptcy. On the other hand, if your income is too high and your debts too low, you probably will not qualify for chapter 7 bankruptcy. In some cases, you may not qualify for either, and this is a sign that you did not think through your other choices.

Consider all of your property and debts if you do qualify. What will happen to your home? Your car? Your retirement plan? Every state has different specification when to comes to this, so make sure that you understand how your property will or will not be taken. Also, it is important to begin compiling lists of your assets and debts. Remember that some debts cannot be wiped out, like child support payments.

Once you have all your information compiled, you can begin the declaration process. It is best to work with a lawyer or financial professional to complete this task, and remember to always be completely honest. Declaring bankruptcy is not for everyone, but it can work for some people.

The Chapter 7 Bankruptcy Timeline

Bankruptcy is when you legally declare that you can no longer repay your debts. Individuals have the choice of either declaring chapter 7 or chapter 13 bankruptcies, depending on the severities of their debts and the incomes being made. Of most, chapter 7 bankruptcy makes the most sense, although you should consider both carefully and do what is right for your. However, if you do declare chapter 7 bankruptcy, here is how it will play out:

First, your declaration officially begins when you sign the paperwork and file the proper documents with a bankruptcy court. In most states, you have to finish a counseling course regarding bankruptcy so that you can be sure this is the correct option for you. This can be done no longer than six months before file your paperwork. Upon filing, your wages will no longer be garnished and your creditors can no longer proceed with legal actions against you or, in most cases, even call you regarding your debt. The court will contact your creditors.

Next, you must meet with your creditors in what is called the 341 meeting. Creditors may or may not choose to attend, but you must be there. A trustee will be assigned to your case and presides. This meeting will typically only last five minutes, and creditors usually do not show up. Afterwards, your trustee will sell any of your possessions that are nonexempt. Creditors have up to 90 days to then file claims. A bankruptcy lawyer will be assigned to help you through this process.

After the 90 days are over, or after all of your creditor have files their claims (whichever comes first), you will be discharged and all of your debts will be written off, except certain exceptions, like student loans and child support payments. Other debts that cannot be wiped clean from your slate include alimony obligations and taxes.

Be aware that most of your possessions can be sold when you file for bankruptcy and will be sold rather quickly. In many cases, it is better to sell them yourself for more money before you declare bankruptcy and use them to help pay off debts. If you can do this effectively, you might not have to declare bankruptcy at all. If you can, look for options to avoid bankruptcy. You have choices, and debt counselors can help you figure out a financial plan that is right for you.

Bankruptcy is a way for you to get out of your hard financial times and it is something that you have to do when you can no longer afford to pay your existing debts.

Keep in mind that there are many types of bankruptcy, but the most commonly filed form of bankruptcy is chapter 7 and a chapter 13.

Chapter 7 is the most common for the individual. It is the complete erasing of qualifying debt. The debtor is then released from all repayment obligations. Keep in mind that chapter 7 bankruptcies are very serious and should not something that is taken lightly.

While giving you an immediate fresh start in repairing your finances, it remains on your credit report for 10 years. You still will be seen as a high risk and you will also be noted as a person who is financially irresponsible.

Chapter 13 is less harmful to your credit. Though there are still marks against you, since you will be working to repay your debts on a payment plan, you do not look like you are financially irresponsible, though you are still considered a slight credit risk. With a chapter 13 you will be able to keep your home and they will not start selling your assets to pay back your creditors like you would in chapter 7.

In 2005 an act passed legislation that now makes it more difficult for individuals to receive a chapter 7 bankruptcies. You know need to do pre-filing credit counseling sessions and also post-filing financial counseling, so that you can get yourself back on the right track.

It is very important that you weigh all sides of the chapter 7 and the chapter 13 bankruptcies. You need to decide which one will do you more harm then good. You’ll also want to make sure that you pick a bankruptcy that will help you to resolve some of your financial problems.

Not a lot of people want to make the decision of when to file bankruptcy, but you’ll also find that there is some point where it just may have to be done. You’ll wan to keep in mind that bankruptcy will affect your credit rating and you’ll also have other ramifications.

Filing bankruptcy should only be a last resort when all other options have failed you. But when should you consider filing for bankruptcy?

You may also want to file bankruptcy when you are constantly borrowing money from one credit source to pay another credit source. If you need to start taking cash advances of more than $500 just to pay for living expenses.

You borrow to meet regular expenses like food and utility bills. You have stopped answering your phone because the only calls you receive now are from creditors.

Are there creditors that are threatening to sue you? They have even already taken some legal action against you. You will find that these all are signs that there is something terribly wrong and these are signs that you may want to consider filing a bankruptcy.

Then it comes to the decision of what sort of bankruptcy you need to file for. The most common are chapter 7 and chapter 13. With a chapter 7, you will find that it will wipe all your debt clean and it will also give you that immediate fresh start. Chapter 13, you will be making payments for three to five years.

However, you need to make sure that you consider filing for bankruptcy when you have gone through all of your other options. You’ll need to make sure that you think about your financials as practical situations. You will also find that if you get some professional advice from a bankruptcy lawyer they will tell you what your options are and also get the bankruptcy filing going if that is your last option.

Wednesday, July 27, 2011

How Do Buy Here Pay Here Car Lots Compare to Traditional Auto Loans?

If you're interested in buying a car, but have bad credit, you may have found yourself considering any one of a number of local buy here pay here car lots. These small dealerships that offer to finance cars with no credit check, can be a viable option for those that have no other option available. There are better ways to get a real auto loan without having to resort to using a dealer that finances their own cars, although many people are not aware that they have a choice.

A buy here pay here car lot typically has an inventory of older vehicles. Sometimes, they carry newer vehicles that are undesirable models, or high mileage newer cars. Rarely will you ever find a used car at one of these types of car lots that has any factory warranty remaining.

Down payments are usually required by dealers that offer in house finance. That's an industry standard. Because the dealer wants to minimize their risk of loss, they usually require a down payment equal to a certain percentage of what they actually paid for the car. Some dealers actually want a down payment equaling what they paid for the vehicle!

Interest rates are usually very high at buy here pay here car lots. You can expect to pay upwards of 15% and in many cases over 20%. Not only do these dealers make hefty profits on the sale price of vehicles, they also make even larger profits on the finance charges. Buying a car with bad credit from a buy here pay here car lot is no doubt, the most expensive way of buying a car.

Traditional loans don't have these issues...

The down payment is an initial investment in the sale price, not just dealer profit. Interest rates are much more reasonable and you can usually expect better help if you ever have a problem making a payment. The problem is that most people that have credit problems don't realize that there are financing options available to them through select companies that specialize in helping people with bad credit car loans.

Should you find yourself in the predicament of needing a car loan but having bad credit, do your best to get a real car loan that will help you to rebuild your credit score with reasonable monthly payments based on what you can afford. There are companies that are willing to help and that can set you on the right track with a real auto loan, frequently with little to no money down.

You'll find helpful resources for buying a car with bad credit without having to resort to using buy here pay here car lots, at

Sunday, February 14, 2010

Tips For Getting Car Finance Approved After Chapter 7 or 13 Bankruptcy

Needing a newer car is one of the most prevalent situations for people who have just gone through a Chapter 7 or 13 bankruptcies. This is especially challenging because most creditors base their loan approvals on the credit worthiness of the applicants. If you are in this particular situation, you should not fret because there are ways for you to get a loan within affordable terms.
A very important fact that you need to keep in mind is that not all creditors follow identical policies as regards granting loans to people. While prime lenders such as multinational banks are rigid when it comes to granting loans to individuals, other types of creditors are more accommodating especially to those who just suffered a bankruptcy.

What you need to remember after going through a Chapter 7 or 13 bankruptcy discharge and/or dismissal is that most creditors would look at your credit score which is why you can expect to get rejected most of time.

However, if you find the right lender through one of the online credit services, you will have a better shot at getting approved for a loan. All you need is to present proof of your capacity to pay back the money through your monthly income. Some credit programs even allow no down payment arrangements so you will be able to keep all of your money intact for the time being.

Getting good rates for a loan is not impossible, that is, if you know where and how to look for the right creditors. Seeking assistance from reputable credit services online would make your loan application pull through a lot faster so it is by far the best option that must be taken.

Bankruptcy happens to be one of the toughest financial hurdles that people encounter and if you just went through it, you are most likely aware of the fact that you will have a hard time to get approved for an auto loan when you need one. If you have had a dismissal, it will be more difficult regardless if it was a chapter 7 or 13. On the other hand, a discharge will not be as tough to work with.

Your choice as to the type of lender you will do business with greatly affects your chances of getting approved especially after a financial setback like bankruptcy. You can expect most, if not all prime lenders to turn you down due to your current credit worthiness. Generally, you would be advised to make some progress in rebuilding your credit before you can be considered for an approval of any type of loan.

In order to get ahead in re-establishing your credit, you need to consider applying for an auto loan with sub-prime lenders. These creditors are used to dealing with people who have just suffered through bankruptcy and more importantly, they are more willing to work with you. This is a sector of the financial market that generally helps people out of their financial woes by granting them credit without asking for too many requirements.

Going to the right type of creditors would make it easier for you to get a loan and het out of bankruptcy. What only matters with subprime lenders is how much money you are actually earning at the moment which would determine how much monthly payments you can make.

A very important caveat that you have to observe though is to only deal with reputable subprime lenders in order to get you out of the financial slump you are in. Avoid predatory lending, such as buy here pay here dealers.

Friday, January 22, 2010

Buying Cars With Poor Credit With No Money Down

Author: Jason Lanier

Purchasing a vehicle with bad credit involves a lot of factors, which causes confusion to many people especially those who are not familiar with how the credit industry works. Such things as interest rates, monthly payments, loan terms and conditions, and many others can be daunting to deal with which is why it is best to know more about the process before signing on to anything.

One of the most prevalent misconceptions about auto loans is that down payments are always required. The big question is, why do people believe these myths at all? Here are the reasons why:

In the past, any financing arrangement obtained from a bank would require down payment as part of institution's policy. Presently though, this is no longer true especially with secondary or subprime lenders because these institutions generally work with people who are having trouble finding any kind of loan because of their credit. Online lenders are also much more accommodating as they cater mostly to bad credit individuals trying to get a new car or a home.

You can almost always expect car dealerships to ask for a down payment due your credit standing. Potential car buyers are always in fear that they will not get approved elsewhere because of their bad credit standing so dealerships duly take advantage of such fact. In the end, the buyers pay for a lot more than the actual selling price of the car because of the additional fees on top of the interest rate and the down payment.

It is imperative that you have a working knowledge on how to buy a car with poor credit. There are a few options that you can take such as getting pre-approved for a car loan through online credit services. Being paired with the right lender will do a lot of good for your finances because getting a reasonable rate for a loan is possible as well as a lower car price.

Learn about real companies that can help you with poor credit auto financing at

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Article Source: - Buying Cars With Poor Credit With No Money Down - Having to Have a Down Payment is a Myth

Tuesday, December 15, 2009

1329 Words About Bad Credit Car Loans - Down Payments, Interest Rates & Where to Get Approved!

This article covers many different aspects of bad credit car loans and buying cars with bad credit in detail. Topics include the difficulty of obtaining bad credit auto financing, whether or not you actually have to have a down payment, interest rates and whether or not you really have to pay a crazy high interest rate, buying used vs new, where you can get approved and finance add-on products. This article will certainly help you along your way if you are looking to buy a new or used car and have a poor credit rating.

What is a Bad Credit Car Loan in General?

Sub-prime and Secondary finance companies offer auto financing for people that have poor credit ratings. This is commonly known as a "Bad Credit Car Loan", as it is a car loan for someone that has bad credit. The interest rates for these types of loans can be very high or reasonable, depending on the lender that you choose to apply with. If you have a bad, fair, slow or poor credit rating (which is all the same), then this type of financing is what you will have to use to buy a car on finance. Not all lenders are created equal and some can offer better terms than others.

Is This Type of Financing Difficult to Obtain?

It depends on what type of lender that you use. Traditional banks are much more difficult to obtain a loan with if you have bad credit. Usually, regular banks and mainstream lenders require large down payments and are very restrictive as to the amount that you can get approved for.

Specialized sub-prime lenders can provide easier approvals and some companies provide their services online, which makes obtaining this type of financing much easier. Generally, if you have a credit score below 680, then a sub-prime lender is what you should deal with if you want to get approved. Credit scores as low as 480 can get approved through special finance programs and in many cases, with little to no money down. While most people become discouraged when trying to get approved with a bad credit rating, it's much easier if you simply use the right kind of lender.

Do I Have to Have a Down Payment?

Car dealerships request down payments, whether you have good or bad credit. It's simply another way of getting more money from you in addition to the amount that they receive from the finance company that approves your loan. Buy here, pay here dealerships always require down payments to lower the risk that they incur by offering you financing.

Obtaining a car loan with bad credit, with no down payment is a matter of using the right lender with the right combination of vehicle, finance amount and terms. Just because you have bad credit, does not indicate that you are required to have money down for a car loan. In fact, the need for a down payment can easily be eliminated with the right combination of vehicle and lender.

Do I Have to Pay a High Interest Rate?

Different lenders have very different lending requirements and guidelines that they use to approve auto loans as well as, the specific interest rate that is charged. Contrary to popular belief, your credit score is not the only variable used to determine your interest rate. The year, make and model of the vehicle that you are wanting to purchase can make a significant difference in the rate that you are charged. So do you have to pay a high interest rate? It depends on where you apply and with which company that you get approved with. You will pay a higher rate than someone that has excellent or good credit, but it doesn't have to be all that bad.

One thing that many people aren't aware of is that car lots can actually increase your interest rate above and beyond what the loan company actually approved you at. This happens all the time and is the main source of profit for the dealership's finance department. It's called back-end profit.

For example, if you get approved at a rate of say, 12%... the dealer can add to that rate from 3% to 5%, depending on the number of "add-on points" allowed by the finance company. So if you're real interest rate is 12%, it's common that you will be told that you've been approved at 15 to 17 percent. The difference that you pay in additional finance charges is profit for the dealership and paid to them by the finance company. The dealership finance manager is paid a portion of the amount, usually 25% of the additional finance charges that you pay as a result of this increase in your interest rate.

The way around paying the higher interest rates is by using a direct lender. By bypassing the dealership finance department you can get lower interest rates and also have the ability to negotiate as if paying cash.

Do I Have to Buy a Used Car?

New cars that are priced reasonably can be obtained with bad credit just as easily as used cars. The added benefit is that there frequently are manufacturers rebates that can be applied to lower the price of the car below invoice, which puts you in good standing as far as the amount requested vs the loan value of the vehicle (great way to get a no money down new car loan with bad credit).

So no, you don't have to buy a used car just because you have bad credit. In fact, many people think that car payments are always lower on used cars. That's not the case and the reason is simple. New cars can be financed for longer than used cars. Also, it's easier to get a lower interest rate (much lower) on a new vehicle than on a used one.

Where Can I Get Approved Easiest?

As described above in the first section, you will need to use a sub-prime or secondary finance company to get a bad credit car loan. You should use a good lender that is legitimate and has a long track history of getting people approved, regardless of their credit history. Some are available online and can provide quick approvals in minutes. But beware of scams and hoax sites that don't deliver.

While you can try to get approved by going directly to a car dealership, it is best if you work with a lender directly. Dealing with a direct auto loan lender will certainly get your loan approved easier and with less hassles. Just because you have credit problems, does not mean that you can't get an auto loan direct, just like people that have good credit. You just have to use the right kind of lender as mentioned above (sub-prime or secondary).

Do I Have to Buy an Extended Warranty to Get Approved?

This question is being addressed because some car dealerships will try to pressure you into purchasing an extended car warranty. Some will state that it looks favorable to the lender or is a requirement that the lender has stipulated for the approval. This is not the case and you absolutely do not have to purchase any type of extended warranty as a requirement for an auto loan.

What About GAP Insurance Added to My Loan?

GAP insurance covers the difference between what you owe on the vehicle and what it is actually worth. In cases where the amount that you will owe will be more than the market value for the car, GAP insurance can be good to have to protect you from having to come up with that amount should the vehicle be stolen or totalled in a car accident. It is against the law for a dealer to force you to purchase it, so be careful when signing the dotted line and don't let a dealer pressure you into having it added to your loan contract.

Jason Lanier is the editor of At his website, you can find good sources for bad credit auto financing for new and used vehicles, regardless of your past credit history.

Special Finance Programs are available for residents of all 50 states.

Regardless of what company that you choose to obtain your financing with, make sure you are dealing with a legitimate online company that can provide you with a real car loan.

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