Loan Modifications and Bankruptcy Filing
If you’re an individual having to file for bankruptcy and are worried about your credit rating, you might consider filing Chapter 13 bankruptcy. Chapter 13 bankruptcy it’s not as hard on your credit because you are required to pay back the debt over 3 to 5 year time frame. Many times this will show your creditors even though you had to file for bankruptcy that you are not walking from your debts like in Chapter 7. Because of this, the credit reporting agencies remove the Chapter 13 from a person’s credit report after seven years. After the payment plan is completed, this will make creditors take a stronger look at these individuals because they are now debt free and they repaid all their debt after the bankruptcy filing. Creditors appreciate the effort of a debtor to repay their obligations rather than walking from them. Everyone makes mistakes, but the smart ones learn from them and don’t repeat them. After filing bankruptcy it’s always good to go through some kind of money management and financial health classes which in many times are available for free.
When filing bankruptcy it’s important to look into the future so the same mistakes are not made again. Whatever is necessary to reduce your bottom line is important. Many individuals that file for bankruptcy also attempt a loan modification if they own a home. This will reduce their payment and help them be able to stay in their family home. It’s important to look at all your options so when your debts are discharged you’ll be able to move forward.
