Archive for November, 2009

When filing for bankruptcy there are two forms of debt that are reviewed for discharge. There are secured and unsecured debts. Secured debts begin as a secured loan. The borrower pledges assets such as a home, vehicle or property as collateral. These assets then become a secured debt. If the borrower defaults on payments, the assets can be used as collateral and sold to pay off the due debt. An unsecured loan has no assets attached for collateral use. Unsecured debts are utility bills, cellular phone bills or credit card bills, etc. These bills can be discharged in bankruptcy such as in when filing chapter seven. Other debts such as those associated with alimony, child support, etc. cannot be discharged in bankruptcy.

For debts that cannot be discharged in a bankruptcy, another option is to speak with a debt consolidation representative. This is a helpful tool in consolidating your debts into a single monthly payment. You will be able to do so within your personal budget. Speaking to both a bankruptcy attorney as well as a representative from a debt consolidation firm can help you to make the best decision in becoming free from both secured and unsecured debt. Either method of debt relief is effective in removing credit harassment and removing or lowering interest rates. If you are unsure of which of your debts are secured or unsecured, a bankruptcy attorney can answer that question for you easily by a phone conversation or a free consultation.

No matter if you have bad credit and are considering bankruptcy or if you have previously filed bankruptcy, you can qualify for a personal loan. It often takes a matter of five short minutes to be approved and you have only a minimum amount of requirements to be able to do so.

The Five Bankruptcy Loan Qualifications

· Bankruptcy is discharged
· Weekly income is of the amount of $195.00 or more
· You have a valid Social security number
· You are a United States citizen
· You are payments are up to date on all of your current bills

These five requirements are basic and are most often currently met at the time of loan consideration. If you meet these requirements you should then consider if you are interested in applying for an unsecured or secured loan. If you are interested in the difference between the two, the description is as follows in the next paragraph.

Unsecured Loan

This is any monetary loan not secured against the borrowers personal assets.

Secured Loan

This is any monetary loan that a borrower pledges an asset (a car, property, etc.) as collateral for the loan.

The End Result Of Your Loan Choice

You can apply for such loans through online loan services or by visiting a local loan officer for an application evaluation. Loans are generally approved based on income levels and assets for a secured loan status. If the loan service feels secure in lending you the requested money then there is little reason to why you should be denied the loan. If you are considering a loan it is best to do some research to see where you can find the best offer with the lowest interest rate. This may not offer you a great APR immediately after your bankruptcy, but further down the road your interest rate offers will gradually become more appealing. Be sure to give yourself time to prepare for a bankruptcy loan. Making sure that a loan is being used for the right reasons and in turn is a step towards rebuilding credit post bankruptcy.

Starting Spring 2005, the new bankruptcy law went into effect. The new law was intended to make the process of bankruptcy more difficult. Two steps were added. One step requires a person filing for bankruptcy to attend an approved Credit Counseling Course within six months before the debtor completes the filing process. The course is set up through a bankruptcy attorney.

The second added step says the debtor must attend and complete an approved Financial Management Course before the debt discharge can proceed. The attorney can also set up this appointment. In many states the courses can even be taken on the Web.

Additionally the new law requires a test on a person’s finances for approval in bankruptcy proceedings. Three tests will evaluate personal income. The tests will check a debtor’s eligibility for bankruptcy and help provide the debtor’s income proof. The debtor must provide a copy of a tax return or transcript of a tax return for the most recent filing period. There are several other changes that came with the new law and a bankruptcy attorney can provide specific details on these.

Years ago the thought of going bankrupt was a devastating experience but as credit became more available and medical bills began to grow, more and more people found themselves having more debt then they could handle. Bankruptcy laws were originally developed to help people get out from under their debt burden and for most people it was a viable of way of starting over with a new lease on their financial life.

Bowing to the credit companies, the federal government has established new bankruptcy law that still helps most people get back on their feet while providing protection against abuse of the system by a small segment of debtors. Under the new rules a person must prove that they have no choice but to file for bankruptcy protection and failing that, will be responsible for their debt.

No longer can a person pile up debt and then use bankruptcy to wipe it out. Under the new bankruptcy law they must show they do not have the financial means of paying off their debt. They must also attend counseling sessions to learn how to better budget their income to keep them from falling into the same trap again.

Persons who have lost their jobs or have amassed unforgiving medical expenses can still find protection against creditors by filing for bankruptcy. The procedure under the new bankruptcy law is a little more complicated and there are a few more forms but overall, the protection meant for the consumer are still available for any in need.

Our financial obligations will always catch up with us wherever we may be. It doesn’t matter if you are living in one of those plush high rise buildings or in one of those cabins in a windy and dusty area, you will eventually have to deal with all your creditors and the worst thing that could happen at this point is for you to be too deep in debts that you cannot possible crawl out of the financial rut that you have created.