Posts from the ‘Bankruptcy’ Category

Filing Bankruptcy OR Loan Modification

Repossession affects credit score, build up additional banking fees, and will only add to financial turmoil in your life. Do Not Blame The Economy For Repossession!!!! You are in a this situation for a reason because, YOU FAILED TO COME UP WITH NECESSARY FINANCES

…….Then how to avoid repossession?  Which is the best option that I have?

Its My CAR
  • Filing for Bankruptcy
  • Loan Modification / Loan renegotiation

Filing For Bankruptcy
Your last and final option to avoid repossession is filing bankruptcy which is the worst options that you have. We recommended that you avoid this at any cost.  You would end up in a better situation by selling your vehicles to pay off your repossession bills than you would by filing for bankruptcy.
……….Bankruptcy is not “finance-ending,” but it certainly will wreck your credit for awhile.

Loan Modification / Loan renegotiation
Its never recommended that you avoid your creditor. Keep in touch With your creditor (who gives you a monetary loan). Keep in close touch and talk about your situation.
If not contact Loan modifier or a renegotiator, who works directly with lenders to modify loans, extend terms or reduce payments.

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How Bankruptcy is related to Auto Credit?

Filing a Bankruptcy for individuals can be of two types, Chapter 7 and Chapter 13. The effect of Bankruptcy can stay on your credit score card for up to 10 years. There are certain things which need to be considered while planning to file for a bankruptcy.

If you are considering repossession for your vehicle, then this won’t be the right time. If repossession occurs before filing for bankruptcy, then it is implied that you are using bankruptcy to avoid paying your debts and after filing will indicate that you have not learnt your lesson. And if repossession occurs outside of repossession then you will find it very difficult to get an auto credit from anyone, including the subprime lenders, for many years.

If you have filed your bankruptcy under Chapter 13, you will need an order from the trustee to obtain addition loans. Without this order you are not allowed to apply for any kind of loans during bankruptcy.

The lender has the right to repossess your vehicle if you fail to make payments and you are filed under Chapter 7. You may also not be given approval for another vehicle loan from your lender after filing for bankruptcy.

If your case has been filed under Chapter 7, and you vehicle has been repossessed but the case has been discharged, you have a chance to obtain an auto loan from a subprime lender. However, a low interest rate is not guaranteed. This type of loan is called as a bad credit auto loan.

Repossession is of two types, i.e. voluntary and involuntary. In an involuntary repossession, your vehicle is taken away by a repossession service whereas a voluntary repossession happens when the vehicle is brought to a place decided by the lender and then surrendered. Though there is not much difference in both types, it is still named differently.

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Debt worries? Do not Give up so early

It is a well known fact that filing bankruptcy is increasing. US government expected to curb the bankruptcy abuse by reforming the bankruptcy law in 2005. However, the recent past has seen filings surging back, partly because of layoffs and rising unemployment. This along with tighter credit, dwindling 401(k) accounts, smaller paychecks and fewer saving have left the people to keep creditors at bay.

Financially hurt consumers used to take refuge in credit cards to help them wade through water. “The fact that consumer credit has tightened and shrunk explains why bankruptcy filings have now gone up so dramatically,” explained one of the law professors at University of Illinois.

The debt-laden consumers are approaching consumer credit counseling services for assistance. But credit counselors say that it’s harder than ever to help them. “People are coming to us in much worse shape than they used to be,” says president of a Credit Counseling Agency.

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How to decrease Auto Loan payment worries when bankruptcies are around?

“Americans are going bankrupt in record-breaking numbers. Around 65% of filings are Chapter 7 which is the walk away filing versus the repayment plan filings referred to as Chapter 11 or 13. Around 85% of the Chapter 7 filings are categorized as no assets cases. This means the people have nothing”, says a law firm.

According to the American Bankruptcy Institute, “Consumer Bankruptcies jumped 32% in 2009 from the previous year reaching to 1.4 million in 2009”. In whatever words they may say, one thing is clear, that for an average American financial stability is not actually stable. Adding more trouble to a financially troubled American, the auto loan affects the mortgage loan and other loans. In this case, how would an American save his Car, his house and other assets?

“Loan modification would be a best choice,” Providers of this service will work with your current lender, acting as a trusted third party and a valuable “buffer” between parties involved.

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