Explanations Of Bankruptcies And Credit Counseling

Explanations Of Bankruptcies And Credit Counseling "I often tell my clients that a financial crisis is similar to a work of art: everyone perceives it differently, but you recognize it when you see it. If you are gasping for air in the middle of the night while worrying about unpayable expenses, you should be aware of your options. Chapter 13 or the more stringent Chapter 7 bankruptcy can be valuable legal protections, but the Bush administration has made it more difficult to qualify for bankruptcy and it may not provide the protection you expect. Consumer credit counseling is marketed so aggressively by so-called ""non-profit"" organizations that one must presume there is profit involved...there is, and you don't want to go there.Chapter 13 BankruptcyChapter 13 bankruptcy is a renegotiation of your debts with the goal of paying them off in a reasonable amount of time. The day you complete your Chapter 13 obligations, you will be able to submit an application for credit. I see it daily: a Chapter 13 ""survivor"" can obtain a conforming loan in as little as two years by reestablishing credit lines promptly and maintaining excellent payment history.Chapter 7 BankruptcyThis is indeed a death sentence. Chapter 7 bankruptcy will effectively prevent you from obtaining credit for at least three years, and seven years for A credit. This indicates that you have no intention of repaying your obligations in the future and are erasing them entirely. Do not do this if you anticipate needing credit in the future. If, on the other hand, you are truly overwhelmed to the point where you cannot pay your mortgage, you may need to consider this solution so you can clear the slate and concentrate on your most important obligation - your home.Consumer Credit GuidanceBecause you are formally and legally renegotiating your debts, CCCS, as it is commonly known in the mortgage industry, is often compared to Chapter 13 bankruptcy. Counselors do not always inform clients of this, causing many perplexed applicants to ask their loan officer, ""I just completed Credit Counseling and paid off all my debts; why would you deny my application?"" The applicant's application was denied because the underwriter viewed him as if he were in the middle of a bankruptcy. In addition, despite the fact that a client may make monthly payments to the Service, the Service does not always pay debtors on time. Look for a credit counselor who will not restructure your debts if you need one. Better yet search for better options Do it yourself so that you have no one to blame but yourself.If you do not have a sheriff at your door, your best option is to consider 'bankrupting' yourself. That is, restructure your debt immediately and on your terms. This may require you to prioritize which creditors you will pay and which you will instruct to ""go ahead and write this one off..."" It's the same as what a court would do, but you avoid a permanent mark on your credit report and obtain immediate debt relief. Here you will find additional information regarding a Do-It-Yourself Bankruptcy.
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