Bankruptcy Help 5 Things You Can Do After Bankrupcy Is A Remortgage Right For You Uk Mortgage Protection Insurance Does Not Have To Be A Rip Off Self Help Credit Repair Second Chance Credit
One of the issues that people considering bankruptcy often worry about is that they will never get credit after filing a Chapter 7 or Chapter 13. That, or the fact that the bankruptcy will stay in their credit report for 10 years from the filing, which fact would serve as warning to future creditors that you might turn out to be a bad risk. But neither is true, however.While a bankruptcy will indeed stay in your credit report for ten years, it does not necessarily mean that you can no longer get new credit.
Furthermore, only a Chapter 7 bankrupcy will stay in your credit report within 10 years. If you filed under Chapter 13, the period is shorter – about five to seven years. Worst case scenario: You can get a new loan but with high interest rates or fees. Now, that’s not so bad, is it? Especially after considering that even people with good credit can get bad loan deals. The fact remains that no matter how bad or good your credit line, it is not a guarantee that you are going to get approved for a loan or get low interest rates. In other words, a bankruptcy may damage your credit but only to an extent. It does not necessarily mean that you will never qualify for a new credit. What damage there is, you can always rebuild. And that is what you should be focusing on, instead of wallowing in the pits of Credit Doom.
#1 CAN DO: Keep a Credit Card out of the Bankruptcy
When filing for bankruptcy, the rule is that you have to make a schedule. A schedule is a list of all assets and liabilities that you are required under the law to disclose before a bankruptcy case could commence. If you owe money on a credit card at the time you file for bankruptcy, you have to include that in the schedule. Otherwise, you may be sued for perjury and penalized under federal law. What’s worse, if you fail to disclose unpaid credits like this, you may be denied discharge of all your debts.
The rule, however, only applies to unpaid credits. So if you do not owe any money on your credit card, then you can go ahead and keep that one out of the bankruptcy. You are not obliged to inform the credit card company of the bankrupcy case. Note, however, that your credit card company may still find out about it through other means and cancel your card as a precaution. If your credit card company gives you notice of cancellation of your credit card, don’t give up yet. Many credit card companies allow their credit card holders who are filing for bankruptcy to keep their credit card on condition that they agree to reaffirm the balance on the card and enter into a new agreement. Try to re-negotiate the terms with your credit card company and see if you can settle for a situation that is beneficial for both you and the company. While the decision is up to the creditors, keep in mind that what they want is to avoid the loss incurred when the debt is discharged and to have your future business.
#2 Get New Credit after Bankruptcy
If there is one thing you can count on in today’s competitive lending environment, it is that credit is always available, even to the recently bankrupt. The catch? Credit may be more expensive than before and available with lower limits. But all that is secondary only to the fact that credit does exist and you can get it. One of the easiest credits available to the recently bankrupt is a secured credit card. As opposed to an unsecured credit card, in a secured card, you must make a deposit of a certain amount of money in exchange for a card that you can use just like a regular credit card. Your credit limit is equivalent to the cash deposit you made. Now, the good thing about a secured credit card is that it is usually available post bankruptcy at lower rates than unsecured cards.
What’s more, the fact that these credit cards are secured are not often indicated in your credit report so creditors have no way of knowing whether your credit card is secured or not. All they will see is that you have been approved for a credit card, which ups your credit score a bit and puts you back in the game fairly quickly. Note, however, that credit experts are not quite in agreement concerning the impact of secured credit cards on your credit rating. So if you do decide to open a secured credit card post bankruptcy, be sure to do it slow.? While your rush at rebuilding your credit is understandable, making mistakes that could significantly affect your credit score like this is not worth it.
Rebuilding your credit worthiness after bankruptcy is a matter of getting a toe-hold in the world of credit. The balance is often precarious and needs delicate treatment. Use credit cautiously and pay on time.
#3 Buy a House after Bankruptcy
Absolutely. In fact, there are many studies that show bankruptcy debtors can qualify for a home loan on the same terms as if they had not filed bankruptcy within 18 to 24 months after a bankruptcy discharge. You see, what the creditors are concerned here is not your past financial troubles but your current financial status – e.g., your down payment, the stability of your income and the relationship between the loan payments and your monthly income. That said, take note of the following things that you might want to do in preparation for your first house purchase post bankrupcy:
If you currently have a mortgage, you may occasionally wonder if a remortgage is a good option for you and or your family. Certainly, a remortgage isn’t for everyone, so take this quick test to determine if you’re in the running to pursue a remortgage as a viable choice
1. Do you presently have a mortgage with a higher-than-average interest rate
Often, if an individual or couple has had a mortgage for a long time, they can get a better deal on interest rates if their credit is decent.
Consequently, if your mortgage carries with it high interest rates, why not consider a remortgage that offers you much lower interest rates
Shop around locally and online and find out what the going interest rates are for someone with your type of property. You just may discover that you can save a bundle by choosing a remortgage rather than sticking with your current lender.
2. Has your credit history improved since you first got your mortgage
As mentioned previously, credit reports can change significantly over the years.
Perhaps you and or your spouse obtained your mortgage ten years ago when you were young and without a good credit history. Or maybe you got your mortgage seven years ago, right out of bankruptcy. In either case, if you’ve paid your bills on time, you probably have a credit report worthy of a lower interest rate than you’re paying.
A company that specializes in handling remortgage agreements may be able to offer you a lower interest rate that will significantly reduce your payments. Though you’ll have to pay some fees associated with choosing remortgage, if the interest rate difference is sizable enough, you could actually wind up saving hundreds each year.
3. Are you dissatisfied with your mortgage lender
If you’re not satisfied with the customer relationship you have with your mortgage lender and don’t worry – many people aren’t, why not switch to a new financial institution. Getting a remortgage will allow you to pick a lender who can better meet your needs therefore, you can choose an institution that will treat you like an individual, not simply a number.
Even remortgage lenders who are overseas and only accessible by telephone and/or email can still be more committed to your happiness than traditional brick and mortar ones. Broaden your horizons when seeking out a remortgage professional, and don’t allow distance to discourage you from checking them out.
4. Do you have a number of personal and/or household debts you’d like to consolidate
On a regular basis, many remortgage companies now offer terrific debt consolidation packages as a part of a remortgage. By choosing these remortgage options, you can whittle down the amount that you’re paying each month and thereby reduce your monthly bills, often by significant amounts.
Although you will still have to pay back the money you owe to your creditors, a remortgage can give you a bit of breathing space, especially if times are particularly tough and money isn’t as easy to come by as it once was.
Depending on where you choose to buy the cover, UK mortgage protection insurance does not have to be a big “rip-off”. Buying the cover alongside your mortgage with the high street lender is the worst choice you can make when thinking of taking out protection. Choosing to go independently for the cover can save you an enormous amount of the money and an independent specialist provider will give you the advice needed to be able to make an informed decision.
Problems began for the sector in 2005 when the Office of Fair Trading received a super complaint from the Citizens Advice regarding mis-selling of payment protection. Fines were handed out by the Financial Services Authority and the sector was referred to the Competition Commission. Recently the Financial Services Authority revealed that despite them setting out recommendations for selling the cover they have investigated over 4,000 cases of mis-sold protection policies in 2007.
Along with this the Competition Commission said that banks are raking in high profits by as much as 80% on selling UK mortgage protection insurance cover and loan protection alongside mortgages, loans and credit cards. However they are not admitting they make around
Many times when people feel that their credit is ruined, they give up all hope of ever trying to apply for anything again. What these people may not know is there are still programs available to help them achieve the things they want without having to worry about credit issues.
Each creditor will set their own standards for deciding whether or not you are eligible to be approved, and their views on your credit history will vary. There are some that will only look at your record from recent years, and some will be more lenient with giving you credit if it appears that your payment history has steadily improved. A good way to determine whether or not you will qualify with a company is to call the creditor directly and discuss their regulations with them. The worst that could happen is that you could be denied, and even though this may be an incredible blow to your ego, you will not be any worse off than before you made the phone call.
Many creditors are open to working out a repayment schedule. However, you should only consider this option if you are unable to work out a schedule for yourself but you feel like you can work under the deadlines of a creditor’s budget. There will be no good result if you waste someone’s time making them find the best option for you, and then fall behind on your payments again. There are also credit organizations as well as non profit companies that are dedicated to helping people get on schedule with their payments, but try to research these companies before enlisting their help because they are not always trustworthy. You should also make sure that you learn about all of their fees upfront whether they are higher than average or hidden fees. Also, just because a company is non-profit, it doesn’t mean that you have to make a contribution. If you were in a position to give money away, you would not be requesting their help. If you are going to get help from a management company, make sure that you find one that will conduct their services in person as opposed to the Internet.
Too often people feel the only way out of a bad credit situation is through bankruptcy. Filing for bankruptcy is not the easy way out at all. When you file for bankruptcy it will take you at least seven years to recover and your goals of buying a house or a car will be even further out of reach. In October of 2006 a new amendment was added to the bankruptcy laws stating that everyone filing for bankruptcy must seek credit counseling within six months of filing. If you think about it, it might be worth your while to seek the counseling and learn how to better manage your credit rather than file for bankruptcy and postpone the inevitable.
Although you think your future credit looks bleak, you have to remember that there are steps you can take to fix your credit and get it back on the right track. Whatever you do, don’t give up. Rather than hide your head in the sand or look for the easy way out, make an attempt to fix your credit, whether it’s through counseling or other means. If you do that, then somewhere along the line someone will be willing to take a chance on you again..
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