Bank finance articles and tips

Is your phone ringing off the hook? Are you receiving threatening letters in the mail from debt collectors? Have you had to borrow money to pay your mortgage, rent or basic necessities? If you can answer yes to any of these questions then you are probably experiencing financial turmoil.

Financial troubles can cause a substantial amount of stress for individuals and families. In this day and age nearly everybody's lives have been touched by the poor economy. Whether your property value tanked in the real estate collapse, if someone you know lost their job or if your favorite local café went bankrupt, you've probably been affected by the economy in some way or another.

Just as no two people's financial situation is the same, no two bankruptcy cases are the same. In fact, filing for Chapter 7 or 13 can vary greatly between filer. Before deciding on which to file, there are a few considerations that go along with a Chapter 7 case.....

f you are thinking about filing for Chapter 7 bankruptcy but you are afraid that you will have to liquidate everything you own, you probably don't need to worry. In many cases, individuals get to keep personal property such as their furniture, vehicles, clothing, tools and jewelry.

Why is this? Because there are exemptions that allow Chapter 7 filers to keep a certain amount of their property and in many cases, debtors get to keep everything they own. If you have an excess of personal property such as multiple vehicles, luxury boats and such, you may be required to liquidate those items, but if you are literally living off the basic essentials, you may not need to liquidate anything.

Facing bankruptcy, a common worry is that it will be nearly impossible to re-establish credit after bankruptcy. Contrary to what many people believe, your credit score can recover and rise again after a bankruptcy. Furthermore, a bankruptcy will not stay on a person's credit report or affect their credit forever. A chapter 13 bankruptcy stays on a person's credit report for 7 years, while a chapter 7 bankruptcy stays on the report for 10 years after filing. While this may seem like a very long time, it is worthwhile to remember that in determining one's credit score, new information is weighted more heavily than older information. In other words, two or three years of regular, monthly payments on a credit card without ever being late, can cause a person's credit score to rise despite a past bankruptcy filing.

It's no secret that declaring bankruptcy certainly gave you control over your finances - and you're certainly eager not to end up back in the bankruptcy courts again. But thanks to a combination of the shrinking job market and the rising cost of living, you're worried that you'll end up right where you started: filing a petition in a bankruptcy court.

Even if you've got your bills under control now, it's always important to use the recession as an opportunity to make sure that your financial education is on the right track - especially if you're trying to avoid bankruptcy again.

Reserve struggles to create a plan to spur borrowing, bankruptcy debtors still have the opportunity to borrow money to buy homes. Let's take a look at how bankruptcy debtors can get a mortgage during or after bankruptcy:

After Chapter 7 Bankruptcy

A debtor is often able to obtain a subprime mortgage less than a year after their bankruptcy discharge. However, if they are willing to wait an additional two years they can often get prime mortgage rates or at least close to prime. FHA mortgages are available to Chapter 7 debtors two years after bankruptcy, while conventional loans are accessible after four years. If a Chapter 7 debtor has done an exceptional job in rebuilding their credit, they may be able to get a conventional loan only 3 years after their bankruptcy discharge. Three years is enough time to save a sizeable down payment and build the type of credit rating that can bring interest rates down significantly.