Getting calls all day from 800 or 888 numbers? All your “bills” have ‘Past Due’ plastered on the envelopes for all to see? Bankruptcy seems the only option – but it’s more involved than most people can imagine. Almost every needs a lawyer if they’re contemplating Chapter 7 or 13, but in the same vein, almost everyone underestimates the cost of that attorney. If you’re considering going through all the documentation available online, once again, you will underestimate the need for a legal translation. Theoretically, there should be someone out there who will just parse through all the bankruptcy legalese and just tell us what we need to know. We know there are a ton of people out there that need this information – we know they’re looking at all their options and getting buried in the details. Luckily for you – we’re here to show you the procedures behind bankruptcy and offer some hard earned advice. As bankruptcy laws continue to evolve, we’ll continue to muddle through them and share all new information with you.

What is Bankruptcy? Why Does It Matter to You?

In a nutshell, the protection of bankruptcy allows a borrower with way too much debt an out. If you find yourself in too deep a hole of debt, with no way out, our government gives us a ladder to climb our way out of the hole. The bottom line rests on a few things like your salary and your recent credit history. Chapter 7 will get rid of all your debts – but it will also get rid of all your assets. Chapter 13 offers a way to repay what you owe without legal hassle from creditors or removal of your assets.

Will you ever be able to get a loan after you declare Bankruptcy?

If you’ve ever had problems with getting credit or had trouble maintaining your bills, you’ve probably seen the lure of credit repair companies promising fastremedies to debt problems. Brochures usually start coming in the mail, competing with your overdue payments, commercials start vying for your attention. All of a sudden, you can see a solution to your problems! But wait…realistically, it’s not quite so easy. Your problems won’t go away – no matter what the ad says – and all too often, you’ll find yourself back at your credit counselor only to find that they wanted you to fail. Further, you may find the company sponsoring your debt relief doesn’t exist anymore.

You can always try to deal with the problem yourself, but the solution will require time, knowledge of the law and discipline. A lot of information can be found online or can be provided by debt counselors that will explain how important credit reports are, how to improve your credit scores, and specific tasks you can use to rebuild your credit. Free consultations with debt specialists or debt settlement officers can also help you in getting back on track.

What are Credit Reports? Why Do They Matter?

Lenders usually look into several parts of a borrower’s finances before they approve a loan; however, the majority usually look at your credit score and repayment history when considering whether to finance you or not. To discover your past credit history, lenders typically seek out the three major credit agencies and review your credit report. Equifax, Experian, and TransUnion collect data regarding every borrower and, for a fee, give that data to lenders to help them decide on the borrowers likelihood of speedy repayment. The credit report also details your address, employer, as well as any public records, such as bankruptcy. The majority of those in the U.S. have credit reports that show credit card payments and payments on loans or other installment accounts. These payments are then calculated using the FICO scoring system and the output (a number between 350 and 800) us used to determine whether the borrower – you – can be trusted.Your past payments, if made on time, are the most important factor when trying to get more credit. Usually, lenders won’t offer credit to people who don’t have a credit history – not to mention, those who have repossessions, leins, foreclosures, bankruptcy, or 30-, 60-, 90-day late payments. If you find yourself in the latter situation, take care to not accept any advertisement that shouts immediate debt relief – especially to those with poor credit. Any lender worth working with should always use your credit report as a basis of the loan. Of course, approval by the lender is solely at the their discretion. No borrower can be sure of whether they will get a definite loan.