Tag Archives: chapter
Get Out of Bankruptcy using Your Home Equity
Filing for bankruptcy will not always discharge your from all your debts. Now that the New Bankruptcy Law has taken effect, filing for bankruptcy is ever more difficult and complicated. Today, your bankruptcy attorney cannot advice you about which type of bankruptcy you should file. Even if you want to acquire a Chapter 7 bankruptcy and be released from all your debts, it will not be so easy.
Under the new bankruptcy law, the bankruptcy court judge will be the one to decide whether you can file for a Chapter 7 Bankruptcy and get discharged from your debts. First you have to go through a “means test” which calculates your income, your monthly expenses and your financial capability as a borrower. If you passed the test, thats the only time you can file for a Chapter 7 Bankruptcy. If you fail, the judge will require you to file for a Chapter 13 bankruptcy.
Getting Out Through Home Equity
A Chapter 13 bankruptcy will put you in a repayment plan, which means you still have to pay off your debts. However, through bankruptcy, your debts will be reduced and your creditors will be giving you a much lower interest. Under the bankruptcy provision, creditors can only impose up to 10% of interest rate to their debtors. Furthermore, the New Bankruptcy Law has made all repayment plans to be a mandatory five-year term. This gives you a better chance at getting out of your debts more easily.
If you filed for a Chapter 13 Bankruptcy, there is a way to make things even better for you. By using your home equity to repay your outstanding debts, you have the option to pay off your debts either in part or full payment. Acquiring for a home equity loan will also give you more time to pay off your debts. Inquire from your attorney about this option so that he can personally make the necessary preparations if you do decide to get a home equity loan. It is also interesting to note that a mortgage loan is a great way to rebuild your credit.
No Need to File for Bankruptcy
It is also worth asking if there really is a need for you to file for bankruptcy. Given the fact that the New Bankruptcy Reform Act has made the procedures more strict and more complicated, you might want to consider other options rather than filing for bankruptcy.
Since the Bankruptcy Law will require you to undergo credit counseling with an accredited agency six months before filing, the credit counseling agency can help you find a more appropriate solution to your debt problem. Here is where a home equity loan again comes as an option.
A home equity loan lets you borrow the money you need based upon the value of your home property. By paying your creditors with your home equity, you dont even have to file for bankruptcy. Again, it will give you more time to make repayments and it will save your credit report from the record of bankruptcy.
However, before you do apply for a home equity loan, find a lending company who will be willing to give you better rates. Keep in mind that a home equity loan uses your home as a security so be aware about your payment obligations.
Debt Settlement Programs and Chapter 7 – Part 1 (Page 1 of 2)
When debtors find it difficult to redeem their outstanding dues, they generally try to find various ways and means to repay their debt. However, in many cases, this does not work out properly owing to various reasons, and debtors start thinking in terms of Chapter 7 and filing for bankruptcy. Availing the facilities offered by the statute can solve some of your immediate debt problems, but a certain amount of debt will remain even after discharging Chapter 7, and your credit ratings will carry a “flag” for at least seven years. Needless to say, it becomes almost impossible to avail large credit facilities in the future. Many companies offer debt settlement facilities in the form of debt settlement programs. One of the most common type of debt is credit card debt, in which cases the companies offer credit card debt settlement programs so the debtors can redeem their dues.
Generally, credit debt settlement companies work to provide customized solutions for individuals who have low monthly incomes and delinquency problems. The extent of debt settlement services vary from company to company. However, all companies provide certain features which remain common, and facilitate credit card settlement. A debt settlement company can provide options to redeem, and it is advisable to avail the facilities rather than file for Chapter 7 and bankruptcy. It is important to know exactly what Chapter 7 is, and what issues are associated with engaging in bankruptcy. The knowledge can be useful in deciding whether to file for Chapter 7, or avail debt settlement program to repay.
What does Chapter 7 signify? Chapter 7 of the Title 11 of the United States Code, dealing primarily with the bankruptcy code, fundamentally governs the process of liquidation under the bankruptcy laws of the United States government. Chapter 7 is associated with liquidation and bankruptcy issues. It offers the simplest and quickest way to file for bankruptcy – and the statute is available to all U.S. individuals, corporations, and partnerships. As per the statute, a trustee is appointed by the court to gather and sell all non-exempt property, and use the proceeds availed from the sale to pay off the outstanding dues to the creditors.
According to the law “Exempt property” is the property that the debtor is allowed to keep or retain on his or her own name. The facility is given to the debtors, so it becomes possible to “save” something for the sustenance and livelihood of the debtor’s family, as well as the debtor. The nature and kind of property exempted depends upon the state jurisdiction and its bankruptcy laws. It is advisable to consult a good attorney to have a clear understanding regarding exempted properties. According to the new law, it is mandatory to keep residence in a particular state for certain duration before availing the statute benefits and facilities. The new updation was enforced to prevent a debtor from “moving” to another state offering more generous exemptions, just prior to filing for bankruptcy.