Buying Into Financial Woes

Buying Into Financial Woes

Buying Into Financial Woes
Over two million consumers filed for bankruptcy last year .​
Before you decide that you need to​ file for bankruptcy, as​ a​ consumer you should do the research and find out exactly what it​ is​ and whether you are truly in​ need of​ it .​
There is​ a​ difference between consumer bankruptcies and municipal bankruptcies .​
Consumer bankruptcy is​ the most common since it​ involves things such as​ credit card debt, medical bills and car loans .​
One of​ the few things not covered by bankruptcy, no matter the type, is​ secured loans such as​ student loans or​ child support.
Municipal bankruptcy is​ where a​ city, town or​ even school district files for bankruptcy .​
At one point in​ time, it​ was called Adjustment of​ Debts of​ a​ Municipality and is​ now under chapter 9 .​
Sometimes, depending on which chapter the consumer bankruptcy is​ filed under, you could be able to​ keep your things after you file .​
Basically if, after financial counseling, you are deemed qualified to​ file, then you need to​ decide which chapter is​ right for you.
Chapter 13 allows the consumer to​ keep everything they owe money on while obliging them to​ pay over a​ certain amount of​ time, usually three to​ five years .​
Consumer bankruptcy tops the list as​ far as​ bankruptcy goes because it​ seems as​ though everyone is​ a​ consumer of​ some sort .​
However, there are options such as​ pre filing counseling and there are wonderful agencies that do debt consolidation to​ help get you back on your feet.
Once you get the ball going in​ that direction it​ is​ hard to​ stop it .​
There is​ one way that you can lessen the amount of​ time you are in​ a​ bankruptcy situation though.
If you file for chapter 13 bankruptcy you generally have between three and five years to​ pay off your debts and charge off your bankruptcy .​
Chapter 13 bankruptcies are required to​ give a​ pay off amount .​
This means that when you file a​ chapter 13 there is​ a​ pay off amount given for the total balance of​ the bankruptcy .​
If you have a​ home you can choose to​ use the equity in​ your home to​ pay off the balance of​ your chapter 13 bankruptcies .​
You can do this by either refinancing your existing loan, or​ getting a​ home equity line of​ credit .​
There are benefits to​ either option and the choice really will depend on what fits your family, and financial ability.
Often times you can find a​ lower interest rate for your home loan then the one you currently have which will save you money and allow you to​ have a​ longer time to​ repay your loan .​
You may also be able to​ lower your monthly payments as​ well, which can help you during this financial strain .​
The biggest key factor to​ being able to​ do this is​ that you ensure that when you file your chapter 13 bankruptcy papers you are allowed to​ incur debt while in​ bankruptcy status .​
If you are not allowed to​ incur debt then you will be unable to​ refinance or​ get an​ equity line of​ credit.

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