Recently, the government released the foreclosure numbers for 2010. This number exceeded all expectations of all analysts coming in at over 1 million foreclosures. Another number that was listed along with this was the number of foreclosure notices that were sent out in 2010. That number was over 3 million and this, rightfully so, concerns many lenders coming into 2011. Banks and mortgage companies are now worried that 2011 will surpass the record number of foreclosures and bankruptcies filed in 2010. Many Americans are in this situation and don't know what to do. For those that are employed and still have an income filing Chapter 13 bankruptcy might just be the ticket. Filing Chapter 13 bankruptcy is a type of debt elimination for those who are looking for a way to repay their debt on their terms and not the lenders. A Chapter 13 will allow a longer payback time frame with less interest, allowing the debtor to catch up on the arrears while being able to keep their property. Chapter 13 bankruptcy is very similar to debt consolidation programs but has the power of the court behind it. If the debtor runs into a situation where they can't afford to keep up on the Chapter 13 payment plan, they will be able to convert it into a Chapter 7 bankruptcy. In a chapter 7 bankruptcy the debtor will have to surrender some property, but they will benefit from the discharge of all the unsecured debt.
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After filing for bankruptcy it's important to quickly work rebuilding your credit score. The higher the credit score, the less visible the past bankruptcy will be. A Chapter 7 bankruptcy will stay on a debtor's credit report for up to 10 years and it's important to keep a clean record through that time. Some Chapter 7 bankruptcy filers feel the need to celebrate the discharge and being debt-free. This is the time when they should be frugal and avoid getting an unaffordable debt. With predatory lenders out there that know the individuals cannot file for another eight years, if common sense is not exercised, they will end up in the same situation that they just got out of. There are some simple tips to rebuilding your credit score after filing bankruptcy. First of all, maintain the same standard of living that you had when going through the bankruptcy. Next, try to understand the difference between your wants and your needs. Thirdly, when credit comes available, be frugal and don't incur more debt than your budget can handle. Remember, credit scores will reflect the number of inquiries on your report. A large number of inquiries will lower a person's credit score that you worked so hard to rebuild.
There are many rumors flying around that after a bankruptcy filing an individual will never be able to get credit again. This can fall under myths and urban legends because it is untrue. After filing Chapter 7 auto loans can be easily acquired. Sometimes the debtor will have to pay a larger down payment and might expect to pay a higher interest rate, but the loans are available. Someone who's in a Chapter 13 bankruptcy will not be able to incur any new debt without permission of the bankruptcy trustee that is handling the case. A year or so after the bankruptcy has been discharged many lenders look at your employment and your ability to pay along with the fact that you're debt-free and see this as an opportunity for a good risk. Always be cautious when taking out any loan and make sure that you're not setting yourself up for failure. When in doubt, consult your bankruptcy attorney or a financial consultant to see if it's okay and go ahead with the loan.
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