Bad Credit Personal Loans After Bankruptcy Are Readily Available
Many people are able to receive bad credit personal loans after bankruptcy, often as soon as 30 days following the discharge of the bankruptcy. Many companies have found a good market offering these loans, knowing a person cannot claim bankruptcy for a minimum of seven years following the bankruptcy discharge. This opens a new market for some lenders will to take a chance of people with a bad credit rating knowing they have legal recourse to recoup the amount of the loan.
Although most traditional lenders simply will not grant bad credit personal loans after bankruptcy there are numerous lenders that fight over the market. Even with the counseling requirements of bankruptcy on financial management and responsibility, there is no law that requires those declaring bankruptcy to follow any suggestions made during the counseling. Following the discharge of the bankruptcy, individuals are free to seek bad credit personal loans after bankruptcy whenever they choose.
Although bankruptcy records are open the public, and their availability is often seen as an embarrassing punishment for ignoring past responsibility, the availability of bad credit personal loans after bankruptcy has many taking that route to get out from under a heavy debt load. Even with the new laws there are those who continue to pile on debt and file for bankruptcy every seven years or as soon as the law permits.
No Laws Govern Who Applies For Bad Credit Loans
While many laws exist over who can offer bad credit personal loans after bankruptcy and the interest rates charged for them, there is no laws governing who can apply for them. Even a person who has multiple bankruptcies in their past are free to seek financial help wherever they can find it. Despite the significantly higher cost of bad credit personal loans after bankruptcy people often flock to the lender offering such loans.
Few, if any of the lenders offering bad credit personal loans after bankruptcy require any type of collateral for the money, even knowing there is a good chance the loan will go into default, the recourse available, including wage garnishment, make them a profitable business. When a person defaults on bad credit personal loans after bankruptcy a court-ordered repayment is typically granted for the amount of the loan and any costs associated with collecting the loan.
Often the cost of collection approaches the amount of the initial loan along with courts costs, attorney fees and collection agency fees, all charged to the delinquent creditor. This adds even more to the cost of obtaining bad credit personal loans after bankruptcy.
Friday, September 28, 2007
Thursday, September 27, 2007
Individual Bankruptcy
Types Of Bankruptcy Depend On Individual’s Situation
For individuals there are two types of bankruptcy including Chapter 7 in which all of their debts are essentially eliminated and Chapter 13, in which their debts are paid off over a five-year period, supervised by a trustee of the court. Businesses can use a Chapter 11 bankruptcy during which they can reorganize their debt until it paid off or renegotiated in order to remain in business until their financial house is back in order.
An initial consultation with a Bankruptcy attorney will help determine which of the types of bankruptcy the individual qualifies to file. There are certain tests administered to determine if the individual qualifies to file Chapter 7 under the new bankruptcy laws. Essentially, an income calculation will determine if the person has a current monthly income, after allowable expenses that is less than the average income in the state in which they reside. If their income is higher than the average, they will have to file for Chapter 13 bankruptcy.
In Chapter 7 bankruptcy, all debts, including secured and unsecured can be discharged. However, some assets owned by the individual may be confiscated and sold by the court in order to satisfy a portion of the secured debt. Of the two types of bankruptcy, Chapter 7 offers the most financial relief for the creditor.
Paying Off Debt Over Time
If a person does not qualify for Chapter 7 Bankruptcy, they might consider a Chapter 13 plan, which requires making monthly payment to a court trustee who then sends payments to all creditors listed as part of the repayment plan. Of the two types of bankruptcy this helps a person meet their financial obligations while keeping creditor’s from taking collection actions against the debtor.
In the past, many people may have started out in Chapter 13 bankruptcy and found they were unable to meeting the obligation and moved into Chapter 7. Under the new bankruptcy laws, which went into effect in 2005, the choice between the two types of bankruptcy is determined by the courts means test. If the person has the means, current income level, to pay off their debts, they are restricted to filing for Chapter 13.
On either of the types of bankruptcy, any assets or initial payments will be directed to those creditors that have what is considered priority access such as past due income taxes, student loans and other government obligations. Payments to unsecured creditors are made last in the line for recovering money owed.
For individuals there are two types of bankruptcy including Chapter 7 in which all of their debts are essentially eliminated and Chapter 13, in which their debts are paid off over a five-year period, supervised by a trustee of the court. Businesses can use a Chapter 11 bankruptcy during which they can reorganize their debt until it paid off or renegotiated in order to remain in business until their financial house is back in order.
An initial consultation with a Bankruptcy attorney will help determine which of the types of bankruptcy the individual qualifies to file. There are certain tests administered to determine if the individual qualifies to file Chapter 7 under the new bankruptcy laws. Essentially, an income calculation will determine if the person has a current monthly income, after allowable expenses that is less than the average income in the state in which they reside. If their income is higher than the average, they will have to file for Chapter 13 bankruptcy.
In Chapter 7 bankruptcy, all debts, including secured and unsecured can be discharged. However, some assets owned by the individual may be confiscated and sold by the court in order to satisfy a portion of the secured debt. Of the two types of bankruptcy, Chapter 7 offers the most financial relief for the creditor.
Paying Off Debt Over Time
If a person does not qualify for Chapter 7 Bankruptcy, they might consider a Chapter 13 plan, which requires making monthly payment to a court trustee who then sends payments to all creditors listed as part of the repayment plan. Of the two types of bankruptcy this helps a person meet their financial obligations while keeping creditor’s from taking collection actions against the debtor.
In the past, many people may have started out in Chapter 13 bankruptcy and found they were unable to meeting the obligation and moved into Chapter 7. Under the new bankruptcy laws, which went into effect in 2005, the choice between the two types of bankruptcy is determined by the courts means test. If the person has the means, current income level, to pay off their debts, they are restricted to filing for Chapter 13.
On either of the types of bankruptcy, any assets or initial payments will be directed to those creditors that have what is considered priority access such as past due income taxes, student loans and other government obligations. Payments to unsecured creditors are made last in the line for recovering money owed.
Sunday, September 23, 2007
Saturday, September 22, 2007
Overcoming Personal Bankruptcy
Personal Bankruptcy, Student Loans And You
Today’s college graduates have to face financial reality more quickly than just a few decades ago. You are given only six months grace from your graduation date until you have to start repaying your student loans. Don’t have a job yet? Too bad, kid. Welcome to the real world. In the 1970’s, college students figured out that by declaring personal bankruptcy, student loans could be forgiven or pushed back a few years. Unfortunately for future generations of American college graduates, in 1998 the law was changed to make student loans non-dischargeable.
Make Student Loans What?
“Non-dischargeable” is our vocabulary word of the day, class. Translating it into American English, this means that if you declare personal bankruptcy, student loans still need to be paid. You cannot get out of it, unless you suddenly drop dead, but that kinda defeats the purpose of getting a college degree in the first place. The Federal Student Aid Ombudsman (FSAO) says there are only three extremely hard to fulfill criteria for exemption of this non-dischargeable rule. You must fulfill all three. They are:
If the loan repayments force you to a “lower than minimum standard of living”.
If the loan repayments will force you into poverty most of the time you need to repay the student loans.
You have to make some sort of effort to repay the loan before filing for personal bankruptcy. Student loans will usually be dischargeable only if you have been able to make payments for five years.
Your Options
You really don’t have many options left if you need to declare personal bankruptcy. Student loans can sometimes be consolidated, which can often make paying them back a lot easier, but you will still need to pay them back. If your college closed permanently before you graduated, then you have an excellent shot of contesting the loans. But what about for the other 99.9% of college graduates? If you’ve consolidated and stretched your student loans for years, at this point it can be next to impossible to disentangle who is owed what, and you can challenge the enforceability of the loans. Since it is the creditor’s job to provide proof of claim about what you owe, this legal loophole might be your only chance. Otherwise in declaring personal bankruptcy, student loans will still be staring at you in the face. Creditors are only allowed to take 10% of your paycheck in order to repay a loan.
Today’s college graduates have to face financial reality more quickly than just a few decades ago. You are given only six months grace from your graduation date until you have to start repaying your student loans. Don’t have a job yet? Too bad, kid. Welcome to the real world. In the 1970’s, college students figured out that by declaring personal bankruptcy, student loans could be forgiven or pushed back a few years. Unfortunately for future generations of American college graduates, in 1998 the law was changed to make student loans non-dischargeable.
Make Student Loans What?
“Non-dischargeable” is our vocabulary word of the day, class. Translating it into American English, this means that if you declare personal bankruptcy, student loans still need to be paid. You cannot get out of it, unless you suddenly drop dead, but that kinda defeats the purpose of getting a college degree in the first place. The Federal Student Aid Ombudsman (FSAO) says there are only three extremely hard to fulfill criteria for exemption of this non-dischargeable rule. You must fulfill all three. They are:
If the loan repayments force you to a “lower than minimum standard of living”.
If the loan repayments will force you into poverty most of the time you need to repay the student loans.
You have to make some sort of effort to repay the loan before filing for personal bankruptcy. Student loans will usually be dischargeable only if you have been able to make payments for five years.
Your Options
You really don’t have many options left if you need to declare personal bankruptcy. Student loans can sometimes be consolidated, which can often make paying them back a lot easier, but you will still need to pay them back. If your college closed permanently before you graduated, then you have an excellent shot of contesting the loans. But what about for the other 99.9% of college graduates? If you’ve consolidated and stretched your student loans for years, at this point it can be next to impossible to disentangle who is owed what, and you can challenge the enforceability of the loans. Since it is the creditor’s job to provide proof of claim about what you owe, this legal loophole might be your only chance. Otherwise in declaring personal bankruptcy, student loans will still be staring at you in the face. Creditors are only allowed to take 10% of your paycheck in order to repay a loan.
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