Bankruptcy Loan

Bankruptcy loans are for people who have filed a Chapter 7 or 13 and are in need of receiving money or credit to purchase something, or they need to rebuild credit. These transactions are generally transactions that the person or family filing bankruptcy obtain after all the debt has been dismissed or taken care of. Before making decisions about a bankruptcy loan, consumers should understand the process of these actions by consulting with an expert such as their attorney.

This court proceeding exists to provide the honest debtor with a fresh start. Many times people find themselves in difficult situations that prevent them from being able to pay their bills and debt. These situations can be the result of a family crisis, like the loss of an income producing family member, job loss, or illness. Whatever the tragedy, this court proceeding wipes the slate clean so that individuals and families can begin building credit again. Bankruptcy stays on a credit report for 10 years. This mark on a credit report will become less significant as time progresses. This will enable those filing bankruptcy to eventually begin the process of obtaining credit again.

Some institutions offer secured credit cards for those who have filed a Chapter 7 or Chapter 13. A secured credit card is where the debtor offers cash to the credit card company. The credit card company puts the money in an account and the credit limit is then equal to the account balance. With time, as the debtor builds credibility with the credit card company, the credit limit is increased. Bankruptcy loans can also be secured loans from a bank or cash lending facility. In this case, a valuable item is put up as collateral for the cash borrowed. The collateral secures the bankruptcy loan. Money was mentioned many times in the Bible. "And they were glad, and covenanted to give him money." (Luke 22:5)

Two years after a Chapter 7 or Chapter 13 discharge, debtors become eligible for mortgage loans. These loans do not necessarily charge higher interest rates and often offer the same interest rates available to any other customer. The size of the down payment on the mortgage and the steadiness of income will prove to be more important than the Chapter 7 or Chapter 13 on the credit application.

Financing specialists handling this type of transaction can assist a borrower in finding the best possible bankruptcy loan with competitive rates and terms. Those who are familiar with a Chapter 7 or Chapter 13 can help with bankruptcy loans by negotiating terms with creditors. The Internet is a good source for finding more information on these court proceedings and available options.

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