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Have You Bought Cars and Incurred Debt? What Are the Consequences in Bankruptcy?

March 8, 2010 By admin Leave a Comment


With many people losing their jobs at the moment that are going to be a lot of cars debt problems, where people cannot afford the repayments on their cars. What should you do if you are in this situation (especially if you are considering bankruptcy)?

Cars Debt - What Type of Debt?

When cars are purchased they will usually be financed either with a loan secured against the value of the car (motor finance) or by a personal loan. This article is concerned only with cars financed with a motor finance loan secured against the car.

Cars Debt - What Should You Do?

If you are having trouble making the payments on your car loan then there may be things that you can do. Investigate whether it is possible to re-finance the loan over a longer period - this could cut the payments quite significantly.

If you are unable to meet the payments and can't refinance then you need to speak to the loan company urgently. Unless you can agree a payment holiday with them they will take the car back. Negotiate with them to get the best terms that you can - if you volunteer to give the car back you will probably end up owing less than if the loan company have to threaten you with bailiffs.

Shortfall Debt and Bankruptcy

If your car is taken back by the loan company and the amount that they raise from selling it is less than the value of the loan you will be left with a shortfall debt. This is just like any other personal debt (credit card, personal loan) and the loan company can and will come after you for it. If you are considering bankruptcy then it is important to realize that a secured motor finance loan will not be included in the bankruptcy but a shortfall debt would be. Therefore if you think that you are going to declare bankruptcy it is important to hand the car back and get the shortfall debt established before you declare bankruptcy. If you don't, you could end up with a debt that is not included in your bankruptcy.

For more free information on how to solve your debt problems visit Neil Douglas-Campbell's site, http://debtadvice4free.com. This site provides debt advice and information from someone that has been in a debt crisis situation and is now debt free.

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Declaring Personal Bankruptcy – Consequences That You Need to Know

February 13, 2010 By admin Leave a Comment

For many people, it's no big secret that declaring personal bankruptcy is not necessarily good news, that it definitely is not easy and that it comes with consequences. So as well as considering whether you have alternatives to declaring bankruptcy before you decide to do so, you also need to familiarize yourself with the potential harmful consequences and make sure you know how you will deal with them.

First of all, your financial reputation will be tarnished. Your credit record will carry information ascertaining to your declaring bankruptcy for around ten years. This is going to make it very, very difficult to obtain any kind of finance and in situations you find you are able to get credit, you will find yourself on the receiving end of very high interest rates. You can rebuild good credit, however.

You should also bear in mind that declaring personal bankruptcy is a matter for public record. Of course, it's probably only a real issue if you live in a small town where everyone seems to know everyone else's business thanks to issues like this being posted in the local newspaper. It's highly unlikely that such a public announcement of your bankruptcy would take place if you live in a large city.

While there is law in place that stipulates discrimination to be illegal, certain jobs do require you to pass a credit check.

Want to know how to manage your debt without losing control? Get the right information on Declaring Personal Bankruptcy before you make the important decision. To get the facts on bankruptcy, simply Click Here

Find out more about declaring yourself bankrupt and what are the considerations you should take note of.

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Consequences of Personal Bankruptcy When Applying for Loans

February 7, 2010 By admin Leave a Comment

Corporate bankruptcies are a lot different than personal bankruptcies. Though some of the consequences bankruptcy implies can be eased, if you have to go through a bankruptcy process you will have to make many sacrifices. Nevertheless, it is possible to get finance after bankruptcy; you just need to know how.

If you are on your own without the aid of an experienced lawyer chances are that by going through a bankruptcy process you lost most of your assets. When going through bankruptcy you are only entitled to keep certain properties: A single vehicle up to a certain value, necessary clothing, tools you strictly need for your job, small personal belongings up to a certain value, insurance up to a certain value too, the property where you live, part of your earned (yet unpaid) wages, social benefits, necessary house appliances and other home equipment, etc.

Any other belongings like other houses or other vehicles will be used to repay the creditors and you will typically loose them. Moreover, not all debts are dischargeable so you will end up with some outstanding obligations you will need to meet on a monthly basis, thus limiting your income.

How Personal Bankruptcy Affects Loan Applications

Loan approval or denial is generally a decision based on credit score which is determined by your credit history. It is not an exaggeration to say that a bankruptcy ruins your credit history, but it does not ruin it beyond recovery. The main problem is that it does not only leave a negative stain on your credit report but it also reduced your assets that could guarantee a loan and your income which is another guarantee for lenders.

That being said, truth is that a bankruptcy on your credit report will scare lenders away unless you can show that after two years since the bankruptcy has been dismissed, you have been able to build an impeccable credit history without stains at all. There are also other things you can do to boost your possibilities of getting approved.

How To Increase Your Chances Of Getting Approved

Make sure your credit report is clean of stains on your recent credit history, check that there is not negative information that should not be there like missed payments or late payments that you have canceled on time. If there are, contact the credit agencies with documentation backing up your claim and demand them to remove that information.

If your recent credit history is bad, you will need to wait in order to successfully apply and get approved. Make sure you pay all your bills in time for at least six months and if you can get a credit card to start rebuilding your credit do so but make sure you never miss a payment and pay your balance in full each time.

When applying for a bankruptcy loan, if you can provide collateral, your chances of getting approved will increase considerably. Your home or your car can both be used as security for a secured bankruptcy loan. This will greatly reduce the risk implied for the lender and may convince him to approve your loan. If you can also provide a co-signer with a better credit score than yours, this will also boost your chances and contribute significantly to your bankruptcy loan approval.

Devora Witts is a certified loan consultant with several years of experience in the credit area who instructs people regarding credit recovery and approval for personal loans, home loans, consolidation loans, car loans, student loans, unsecured loans and many other types of loans. If you want to understand Payday Loans and Non Home Owner Loans thoroughly you can visit her site http://www.badcreditloanservices.com

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