Why Filing Bankruptcy Won’t Let You Erase Your Debt

The reason why the government won’t let you erase your debt anymore because they are frustrated at seeing 9 out of 10 people run up their credit and then try to duck out on the debt. The reason is that creditors issue a service to you by lending out tens of millions of dollars so you can get something on credit and then have the customer run up their bills. The creditors are losing ten of thousands of dollars just by people who choose not to pay their debts. There are people in this world that will do that and once they claimed bankruptcy under the old rules they were scot free and would get more credit and do it again.

That unfortunately takes away from the people who have legitimate problems such as medical expenses or a loss of income. Maybe a death of a spouse who was the bread winner was the reason why bankruptcy was claimed. These days it doesn’t matter, because of the way we are here in the United States the government felt the law had to change. Under the 2005 rule the victim of Hurricane Katrina would have been allowed to claim a full excuse bankruptcy but under the new rules they cannot. Because under the new laws their debts were prior to the Katrina, some where years before and they does not excuse people from paying their debts.

How fair has that become, the people who really need a break cannot get one because of the people who have no regard for others. How long did people think it would take the government after seeing thousands of bankruptcies from passing through the courts to say hey that is enough. It took them long enough where creditors lost millions and millions of dollars and they finally had enough.

All of the Chapters of bankruptcy had some changes made to it. These days it is mandatory to attend credit counseling and it is mandatory to take a means test to determine if they’re eligible for filing a Chapter 7. If you have a steady job with steady income then they allow you to file a Chapter 13 but if not then you must liquidate your assets and if lo and behold you have no assets then you are out of luck because you need a job for Chapter 13 and then you need assets for Chapter 7 so it is a vicious cycle that may work for most people, but what about the people who don’t have anything or a job. Then their life just got harder.

Before the government makes bankruptcy obsolete let’s try to not to take anymore advantage of creditors. If you know you are falling into debt, contact the credit card company and tell them you need help and they may be able to freeze your account until you can work something about. Keep on top of your debt and keep on track with your payments.

Oral Nicholson wants to show you how to avoid bankruptcy and will show you proven techniques and statergies to get you out of debt without bankruptcy. For bankruptcy information visit http://www.filing-bankruptcy.info

This entry was posted on Thursday, April 26th, 2007 and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
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How Credit Scores Affect Mortgage Applications

With a good credit score an applicant will receive prompt response from many lenders, all of them offering low interest rates and low down payment options. The loan amount offered also may be high. On the contrary a low credit score would result in a lot of rejection from various mortgage financers. Because creditors wouldn’t come forward easily to give credit to individuals that have a history of difficulty in repaying existing loans. After all, creditors take risk when they finance mortgages against the credit history of a debtor. Naturally, they will wish to remain on the safe side and pick up less risky ones that have good credit histories. A good credit score means less chance of missing on payments and therefore less risky.

But there are some real risk takers that will come forward to finance mortgages for individuals with bad credit scores. They would charge high down payments and always high interest rates though. They may also fix additional charges for every little paper work and may charge high closing rates. The loan amount offered will also be considerably less. The individual with poor credit scores will not have much choice but to accept the terms and conditions as there are no other alternatives. This is a tight situation and to avoid this you must have a good credit score.

People with bad credit may fall in to the trap of ’secured loans’. Secured loans are the ones where the loan applicant offers an asset as collateral security. The lender becomes secure about the repayment of the loan and not the borrower. Securing a loan with bad credit score becomes easy only when the applicant is willing to offer some asset as collateral security. This again is a very dangerous situation where an individual runs the risk of losing his entire collateral asset in case of failing to pay the loan installments in time. An individual should always avoid such type of a loan.

Resort properties normally require large amounts of finance which a person with bad credit may find it difficult to obtain. So it is always advisable to keep your credit score high. Incase the credit score becomes low due to unavoidable financial reasons it can be improved upon. There is no need to lose hope simply because a person has a low credit score. If the property that he intends to buy has good equity he should go out and try to obtain finances for it. There are many sub prime lenders willing to offer their services.

For a review of your credit report as it relates to a mortgage loan and a consultation on the best loans available to you, give us a confidential, no obligation and no cost call.