Bankruptcy Personal Pros and Cons

There are facts to consider before deciding to file bankruptcy personal. One of the most frequent reasons why people are afraid of bankruptcy personal is the fear of spending too much time in the court at hearings. Another reason is the unpleasant feeling that your financial matters are discussed as if under the microscope. On the other hand, bankruptcy personal can be the only way of eliminating debts and of having a chance to start a new financial life.

People tend to think that there are more bankruptcy personal cons than pros and this fact can be true especially in case of people with pessimistic life perspective. However, there are true facts that are considered cons and can be serious arguments for doing whatever it takes to avoid bankruptcy personal. One of these cons is that the debtor can loose all his properties or assets of value, equity in a home.

Bankruptcy personal is considered an expensive process, as trustee, courts and fees are to be paid from debtor’s assets. In case the debtor is a business owner, the employees can be dismissed and the commercial enterprise sold in order to pay the creditors. Hardy can a debtor obtain a so-called alternative to bankruptcy personal, as there are some requirements stated in the bankruptcy law. This type of bankruptcy personal allows the debtor to keep his valuable assets and pay the debts over a period of time if there is reliable reorganization plan presenting anticipated income.

Wise financial consultants sustain the idea that once experiencing bankruptcy personal the debtor starts taking seriously financial responsibilities, becoming organized and balanced concerning extravagant expenses. The debtor can be motivated to do everything in order not to suffer the same financial troubles. In a way, bankruptcy personal makes you wiser and more responsible regarding bills and expenses. On the other hand, bankruptcy personal is the only solution to escape headaches and nightmares of dealing with lots of creditors, debts and financial troubles of other nature. Bankruptcy personal removes the uncertainty, the worries and in some cases more expenses.

After bankruptcy personal getting a loan is a real adventure, as lenders tend to accept bankruptcy personal loans at least after two years have passed since the event. In some cases a down payment is necessary in order to obtain a bankruptcy personal home loan. In most of the cases when a post-bankruptcy personal loan is accepted the proof of a flawless payment history is necessary. In case the bankrupt is found dishonest or culpable some bankruptcy restrictions are imposed.

The fact that the debtor should pay on time his bills after bankruptcy personal can be a good fact, giving the opportunity of starting fresh and of becoming organized and responsible. One of the pros of bankruptcy personal is that creditors are forced to accept less money than the debtor owes.

Securing Post Bankruptcy Personal Loans: How To Practically Guarantee Approval

It is always a little misleading to claim that any loan application can be guaranteed approval. In truth, no loan can be guaranteed since lenders generally assess applications on their own specific merits. But there is no doubt that a loan application can be made difficult to turn down – even applications for post bankruptcy personal loans.

The fact that someone with bankruptcy on their recent credit record could secure a loan is unexpected. We are led to believe the stigma that comes with such a black mark sticks, so we have little or no loan options for at least 2 years. But getting loan approval despite bankruptcy it is possible if the right boxes are ticked.

In fact, applicants that have recently come out of their bankruptcy term actually have an advantage over other applicants. So, qualifying for and securing a personal loan is nothing to be shocked about – as long as some compromises are accepted, of course.

Qualifying For A Loan

So, how is it possible to qualify for a post bankruptcy personal loan? It is actually a lot easier than people think. For a start, as with all loans, the credit history of the applicant plays a minor role in an application process. More realistic issues take precedence.

Getting loan approval despite bankruptcy comes down to confirming a secure employment status and providing proof that the loan can be repaid. What problems there may have been to justify bankruptcy is completely irrelevant. So, if the applicant has held a full-time job for a period of 6 months prior to applying, and the income is large enough, then approval chances are strong.

Once an ability to make repayments (basically, that they have a reliable income) is confirmed, then there is little reason to deny the application for a personal loan. Besides, there is a hidden advantage that makes approval very likely.

The Hidden Advantage

It is something of a shock to know that someone who has emerged from bankruptcy can possibly have an advantage over those who have not. After all, bankruptcy effectively means that the obligation of repaying debts in full was sidestepped. But getting a post bankruptcy personal loan is arguably easier to get approved.

The reason is that because all debts have been wiped out as a result of bankruptcy, there is no existing debt to consider. It means that the debt-to-income ratio is extremely strong, and all credit commitments can be focused on the new loan. So, getting loan approval despite bankruptcy is somewhat logical.

Still, lenders are no fools, and know they can take advantage of the situation. So, despite the lack of existing credit obligations, and therefore a smaller chance of defaulting, they will still charge higher interest rates on a personal loan.

Terms To Look Forward To

So, what kind of terms can an application look forward to when seeking a post bankruptcy personal loan? The interest rate will be higher, and the size of the loan itself is usually small – usually between $3,000 and $5,000.

But it is possible to get larger loans, on condition that some security is provided. It may be provided through a type of collateral, or it could be provided as a result of a cosigner being added to the application. Whatever its form, it makes getting loan approval despite bankruptcy practically guaranteed.