There are two ways in which you may be able to secure a loan while in an active Chapter 13 bankruptcy:

After-petition debt: A debtor may not accrue new debt of more than $1,000 once the petition is filed without the court’s prior approval. The debtor must submit an application to incur the obligation. Without holding a hearing, the court may grant the application if no objections are raised.

The debtor must file an application to purchase real estate. This includes real estate that would be used for the debtor’s personal residence and refinance loans that change the terms of the debtor’s current mortgage loan. The debtor must show that the new loan would be affordable, reasonable, and not cause unfair treatment to unsecure creditors in the case.

Bankruptcy guidelines can vary by state and may not apply to the unique financial situation of every consumer. Successfully navigating the bankruptcy process requires the expertise of an experienced Roseville bankruptcy attorney.

Vehicle loans are one of the most popular loan types in the country, and for good reason. To make a living, most people require reliable transportation. One of the main concerns of people who file Chapter 7 bankruptcy is whether or not they will be able to get a car loan once they have done so. While you must wait at least until you receive your Chapter 7 discharge, which usually occurs 60 days after your 341 hearing of creditors, you can then begin applying for auto loan.

Can I Get A Loan After Bankruptcy?

Yes, you can get an auto loan soon after being freed from Chapter 7 bankruptcy, but finding a suitable lender may take some time. You should anticipate paying substantially higher interest rates. Chapter 7 bankruptcy can stay on your credit report for up to ten years after you file it. Furthermore, if you had good credit prior to bankruptcy, your credit score is likely to have suffered when you experienced problems with too much and/or delinquent debt. You’ll need to find a lender ready to work with “poor or no credit lending” standards because of these two factors. Individuals designated high-risk borrowers are charged a higher interest rate by these types of lenders.

Do I Need Good Credit?

Generally speaking, you do not need perfect credit. Beginning to repair your credit after bankruptcy is an important step toward obtaining a car loan. If you have any secured property payments (such as another vehicle or a home loan) left after bankruptcy, making these payments on time provides you an advantage in reestablishing your credit. Furthermore, if you qualify for a secured credit card, you can use it to make little purchases and pay off your monthly balance on schedule. These activities will allow you to begin building credit almost quickly, as well as demonstrate to your potential auto loan lender that you have regained control of your finances following a Sacramento bankruptcy.

Getting a loan after bankruptcy is not impossible. It is in fact quite possible to get a loan after a bankruptcy. However, the borrower must understand that it is not going to be easy. It is not going to be simple because lending institutions are still very wary of giving loans to people who have declared bankruptcy. This is because they want to be protected in the event that something goes wrong. They want to be protected in the event that the borrower fails to pay his or her loan back.

After Debts Are Discharged

A borrower who declares bankruptcy must first provide a copy of the papers that were filed with the bankruptcy court. The borrower must also supply a copy of the order from the bankruptcy court stating that the bankruptcy has been discharged. The lender must consider the borrower’s ability to repay the loan. The lender must consider the borrower’s income, assets, and current liabilities. They must also determine if the borrower has too much debt. If the borrower has too much debt, the lender must take the borrower’s debts and assets into consideration. They must then determine if the borrower can handle the new debt that they will be taking on if they are approved for the loan. If the borrower has too much debt and bad credit, they might still be approved for a loan if the loan is asset backed. This is a loan that is secured by assets. Even still, some lenders do have an outright ban on lending to bankruptcy filers until a certain period of time has passed. So its important to discuss the lenders guidelines early in the process to make the most of your lending search.

For instance, if the borrower has a house that is worth $200,000, they may be able to get a loan for $200,000 because the house will serve as the collateral, although most lenders don’t lend up to the full value of the collateral. If the borrower has too much debt and bad credit, the lender will assess the borrower’s credit history. They will determine the borrower’s ability to repay the loan. They will then take the borrower’s income and assets into consideration. If they determine that the borrower has a high likelihood of being able to repay the loan, they may be willing to grant the loan. A lender will want to make sure that the borrower can repay the loan. The lender will want to make sure that the borrower will not be put into a worse financial situation because of the loan. They will want to make sure that the loan will not cause the borrower to fail to pay his or her other bills.

Of course, the borrower should also be wary. Not all loans are alike, and many may not carry the best terms or financial incentives for the borrower after bankruptcy. Take time to shop around after working with your Roseville bankruptcy lawyer to discharge your debts. Once you start with a clean slate, make it count and find the best loan for your financial situation as you build your credit profile.

Co-signing for a loan is not an everyday occurrence. Many people with poor or under established credit may only be able to secure a loan with the help of a co-signer. Although co-singing is commonplace in some instances, there are risks involved to both the borrower and the co-signer if the debt becomes delinquent or is unpaid. When you cosign a loan for someone you are essentially telling the lender that you will be responsible for the repayment of the loan if the primary borrower defaults. This is a huge undertaking for most people. If the borrower files for bankruptcy protection you could find yourself on the receiving end of harassing calls from creditors, threats of liquidation or risk damaging your credit.

Cosigning a loan is something that should be done with extreme caution. Make sure you know the terms of the loan, how much you are agreeing to be responsible for and if you feel you are able to handle some of the worst case scenarios before you commit. Make sure you have an open and honest discussion with the borrower about the risks involved.

Despite the risks associated with cosigning a loan, it’s not uncommon for borrowers to attempt to protect their cosigners from the debt they owe. If the borrower is planning on filing for bankruptcy, they may try to protect their cosigner from the debt they owe by including a clause that lets them off the hook. If you, as the cosigner, are not aware of this clause it could come as a huge surprise. While it’s not uncommon for a borrower to try to protect their cosigner, it’s against the law. If the borrower is planning on filing for bankruptcy and includes a clause that exempts you from the debt they owe, you can dispute it. The clause should not be enforceable because it was not included in the original loan agreement. If you still find yourself in the position of facing the debt owed by the borrower you can submit a proof of claim to the bankruptcy court.

It’s important to keep the lines of communication open with the borrower to ensure that they are not planning on including you in their bankruptcy filing. If you are not included in the filing, you can move forward with your life and continue to build good credit. Cosigning a loan can be a smart move provided that the borrower has good credit and is financially stable. If you have any questions or concerns about cosigning a loan contact one of our Sacramento bankruptcy lawyers today.

These days, many people are finding themselves drowning in debt or still suffering the consequences of prior unresolved debts. To stay afloat, some are turning to high interest, risky loans to make ends meet. Perhaps even worse, are the predatory lending practices of some agencies to take advantage of these consumers.

Poor credit scores, a history of repossession or collections, and stingy lenders can all make getting a secured loan more difficult. Subprime auto loans target people with poor credit or complicated loan histories, with the lure of fast cash. The reason these loans are easy to obtain is simple: complicated and costly repayment terms. These subprime loans are often associated with higher rates of payment delinquency. As a result, lenders usually require a hefty down payment and a co-signer. The co-signer is responsible for the loan if the primary borrower has defaulted or has been unable to make the payments. Further, some people have found themselves trapped in a cycle of auto loan scams and predatory lending agreements when they try to take advantage of these kinds of loans.

For the consumer, the problem is twofold. First, some consumers in this financial hardship already face challenges with money management or are more likely to experience financial hardship during the life of the title loan. Additionally, lenders often prey on people they deem as high risk, hoping for default. Once default happens, the lender repossesses the car and sues the consumer for the loan balance. Not only does the lender retain possession of the car, often reselling it for profit, but they also sue for payments from the consumer.

Unfortunately, this type of predatory lending has been commonplace in recent years. However, there are ways to get out of a bad loan and manage debts. A Sacramento bankruptcy lawyer can help you fight your debt problems and regain control over your financial future.

There are several types of loans that consumers can choose from when it comes to borrowing money. Payday loans, title loans and personal loans are the quickest, easiest option for anyone needing fast cash, but, they are risky. Other types of loans are more exclusive, often requiring criteria that make it difficult for the average borrower to obtain easily. While both avenues serve a purpose, the options to consumers are far from equal.

Types Of Loans

In general, loans fall into one of two categories: secured loans and unsecured loans. Secured loans are any lines of credit that are tied to assets or property as collateral, such as car loans and mortgages. If the borrower defaults on the loan payment, the loan lender has the right to repossess or liquidate the asset to satisfy the debt owed. Unsecured loans are lines of credit that are not tied to assets or property as collateral. If the borrower defaults, the loan lender only has debt collection and traditional legal avenues for obtaining the debt owed.

In a bankruptcy, how loan debts are handled varies by the loan type, as well as whether that loan debt is also considered a “priority debt”. Secured debts are not eligible for a traditional debt elimination as most commonly thought of when someone discusses filing for bankruptcy. Secured debts in bankruptcy are most often satisfied through a Chapter 13 repayment plan. Borrowers can repay a portion of the debt through a series of affordable monthly payments, while keeping the property or asset. Unsecured debts are often eligible for either a Chapter 7 debt elimination or Chapter 13 repayment plan, depending on the finances of the borrower.

If you have questions about your debt or how bankruptcy can give you a fresh start, contact our Sacramento bankruptcy office today at (916) 459-2364.

You may wonder what will happen to your debt during your bankruptcy case. Unsecured debt like credit cards, medical debt, and payday loans will be eliminated, but the secured debt will be handled differently. Secured debt usually includes a home mortgage or vehicle loan. The lender holds the property as collateral until you have paid off the loan.

Secured Credit Cards

Some retailers like Sears or JCPenney issue secured credit cards. They claim to take your property if you fall behind in payments. While they may have a right to repossess the property, they do not have the right to enter your home to do so. These companies know this and rarely attempt to repossess property purchased with their store cards.

Some banks will also let you open a credit card that is secured by cash. They will hold the money in an account, and if you fail to make your credit card payments, they will take the money from the account for the secured credit card debt.

Home equity credit cards are secured against your home. It is almost always a bad idea to use these types of cards. If you fail to make the payments, you could lose your home.

Automatic Stay

An automatic stay goes into effect as soon as you file your bankruptcy papers with the court. This effectively interrupts all secured and unsecured creditors from taking any action against you to collect on your debt for a certain period of time. The automatic stay stops phone calls, letters, foreclosures, vehicle repossessions, and utility shut-offs to name a few.

The bankruptcy court can sometimes stop secured creditors from taking collateral by removing the creditor’s lien. This action renders the debt unsecured. Unsecured debt can often be eliminated in your bankruptcy case. Another option for dealing with secured debt as you can pay the value of the property at the time of the filing and not the amount you still owe on the loan. This enables you to keep the asset and pay considerably less for the item.

Chapter 13 Bankruptcy

Filing Chapter 13 bankruptcy enables you to restructure your debt so you can gradually pay the arrears on any secured property you have fallen behind in payments. Sometimes your interest rate can be lowered, making your payments even lower.

If you are overwhelmed in debt and worried about losing your home or other secured property, contact a Sacramento bankruptcy attorney to find out how you can get financial relief.

As a Bankruptcy attorney in Sacramento California, questions about obtaining a small business loan after bankruptcy are reasonably common. Specifically, small business owners who have declared personal bankruptcy in California in the past want to know if a small business loan is within their grasp. While the general impression is that a lender will not loan money to an individual who has filed bankruptcy in the past, obtaining a small business loan is possible under certain situations and with some considerations.

Owner and business relationships

Small business owners and their businesses are intrinsically connected. Running a small business means that you will personally guarantee loans. As a non-legal entity, you are the business, and the business is you. Therefore, it doesn’t matter to lenders if your previous bankruptcy was due to personal or business debt; instead, lenders focus on whether you were able to reestablish credit, have a business plan, and are earning a steady income.

Credit Report and Credit Score

A bankruptcy will remain on your credit report for 7 to 10 years depending on which type of bankruptcy you filed. If you are seeking a loan during this period, you are likely to experience much more difficulty in obtaining a small business loan. This level of difficulty will start to decrease around the two-year mark. This timeframe gives you 24 months to put maximum effort into increasing your credit score by making payments on time and not taking on too much additional debt.

Business Plan and Consistent Income

Business plans typically help business owners approach private or public lenders for a small business loan. They lay out operations of the business, what products you will sell, and how you will sell them. While putting one together may seem like a daunting task, the “keep it simple” motto can be applied to the creative process to ease some of the anxiety surrounding developing a business plan. Business owners have been able to obtain lending with a business plan as short as one or two pages. The critical point is that a business plan shows lenders that you have put time into developing a program that is executable. The easier to understand and grasp the concepts, the better. While business plans are grand, showing a revenue stream from business operations is even better. If you have a pre-existing and consistent income stream, banks will be able to ascertain your ability to repay the loan.

The Business Loan Interview

It will be impossible, in most cases, to obtain a small business loan without meeting or speaking with a loan specialist to explain any discrepancies or negative information contained on your credit report. In preparing for this conversation, you should be prepared to explain either on your credit report. Spend time to go over your credit report after bankruptcy and create a written explanation for each negative item. This preparation will better prepare you to answer any questions that may arise during the loan consideration phase.

Consider Alternatives to Big Banks

While it is natural to envision approaching a large, national bank for a small business loan, do not discount the many alternatives in small business financing that are available to you. Smaller, local credit unions can have less stringent requirements for loans and can be an excellent source of business funding. Additionally, many online business loan companies have emerged over the last five years that offer even more alternatives if you have been turned down through more conventional small business loan venues.

Obtaining Loans After Bankruptcy

While there is no guarantee that you will be able to obtain a small business loan after bankruptcy, if you create a business plan and wait at least two years after bankruptcy will greatly improve your odds of obtaining funding. In addition, you should try to consistently improve your credit score, demonstrate consistent income, and explore multiple options for financing. II you currently own a business but are having trouble making payments to vendors or on personal loans, bankruptcy attorneys in Sacramento California can assess your situation and advise you on whether filing a California bankruptcy can help you discharge debt while keeping the assets that you already own.

20% of Car Loans to Subprime Borrowers

Of the $1.2 trillion in auto loans balances in the U.S., roughly 20% of them are made to subprime borrowers. The trend emerged from a record year of auto sales in 2016 which was largely fuelled by consumer debt. Now that auto sales in America have begun to level off, and with the Federal Reserve increasing borrower costs, the auto loan industry is starting to look like it could run into trouble. Compounding these problems is the fact that last quarter the Federal Reserve noticed a drastic increase in the number of 90+ day’s delinquency rate specifically in new car loans.

Possible Economic Issues

Some economic analysts are starting to suspect the subprime auto lending trend could be leading to a bubble. The good news, however, is that auto debt only accounts for 9.2% of household debt which is nowhere near the size of the mortgage industry subprime debacle that caused the financial crisis of 2007. Those who are hurting the most are the auto loan borrowers themselves who risk further hurting their credit and having their vehicles repossessed, but lenders could also be in the crosshairs as well. The U.S. Justice Department has looked into lending practices in the auto loan sector in the past and may see fit to lobby for increased regulations. Additionally, if late payments and defaults continue to rise many auto loan lenders may be out of business.

If you are currently struggling with making your monthly auto loan payment and are at risk of repossession, contact a Rocklin CA bankruptcy attorney immediately. If you qualify for Chapter 7 or Chapter 13 bankruptcy, you can stop collection attempts and repossessions and may even be able to reduce your total payment through a process known as “cramming down”.

Short Term Loans in Bankruptcy

In a chapter 13 Bankruptcy case a shorter term loan is placed in the unsecured debt category and subsequently paid back over the course of 36-60 months. If you are able to complete the repayment plan ordered by the court, then any leftover amount is discharged. Alternatively in a Chapter 7 bankruptcy, which are harder to qualify for, the short term loan will most likely be discharged along with any other unsecured debt.

It’s important to note that when you took the short term loan is of importance in your bankruptcy case and U.S. bankruptcy code has regulations on how long ago any dischargeable debt was taken on prior to the bankruptcy filing. For unsecured debt, it is typical that any debts acquired within 90 days of filing cannot be discharged and will have to be repaid. You should make the decision to file bankruptcy only after consulting a qualified bankruptcy attorney in the area you would file. A bankruptcy lawyer in Sacramento can explain how different debts will be handled in a bankruptcy case, which chapter of bankruptcy is right for you, and if there are alternatives to bankruptcy that you may want to consider.

Student Loan Debt Management Solutions

• If you have multiple student loan debts, consolidation might be the answer to a majority of your worries. It gives you an opportunity of making single monthly payments towards the several student loan debts. It also lengthens your payoff tenure. This ensures that you have a longer time to pay off your debts.
• It is always advisable to pay off the most expensive student loan first. In other words, you must make it a point to contribute a major part of your monthly payments towards the student loan. Typically this is done with the highest interest rate. Once the costliest debt is repaid, you can move on towards repaying the second most expensive student loan debt.
• Federal student loans offer a bunch of alternative repayment plans. Graduated repayment, extended repayment, income contingent repayment and pay as you earn to help students repay their debts more effectively. You can try out one of these alternatives if you are on the verge of defaulting on a monthly payment.
• In certain extreme situations, there is an alternative termed as loan forgiveness. This allows you to request forgiveness, discharge or cancellation of your entire student loan debt. However, you can request loan forgiveness only under certain circumstances. This includes permanent or total physical disability, an impending bankruptcy or a closure of the school before you could finish your degree.

Loan debt of all types can be tricky. If you are struggling to pay your debts, contact our Sacramento bankruptcy firm for more information. We can get you out of debt and back on track.

Payday and title loan risks

Payday loans and title loans are exorbitantly priced. A typical title loan or a payday loan can be nearly 300% in interest. If they are not paid by the end of the month or within the set date, they are rolled into the next month with a fee. In due course of time, these loans can rake up so much in interest that it will exceed the principal amount.

In bankruptcy, they are discharged. They are treated like unsecured loans and are readily wiped out. In chapter 13, they are treated like a credit card debt, but with even less priority. You will end up paying pennies on the dollar for it as per your repayment agreement. In some cases though, the lender might decide to fight back and challenge the court’s ruling.

If the loan was taken within 70 to 90 days of filing for bankruptcy, they might choose to challenge the judgment saying that it was the borrower’s (your) intention, to take the money and not have to repay it at all. However, that would mean lenders will have to prove intent to commit fraud and that is not easy. Bankruptcy courts are also not too friendly towards payday and title lenders, so you are quite safe when it comes to their legal retaliations.

However, there are chances that the lender can prove misdeeds, and you will have to pay it out. So, if you are going to file for bankruptcy, wait for a little over 90 days and then file. If you are stuck in the payday loan cycle, end it today. Our team of Rancho Cordova bankrutpcy lawyers can help get you out of debt the right way.

Car loans

Car loans are based on similar principles as that of home mortgages. The lender agrees to give a loan that is based on a lien that they hold on the car. So, when you pay out the loan amount entirely, you get full ownership of the vehicle.

Car Loans In Bankruptcy

If you are unable to pay out the entire loan and file for bankruptcy, then there are 5 ways in which it will normally go.

• The vehicle will be taken away- In chapter 7 cases, there is a chance the lender will repossess the car.
• Reaffirm the car loan with the lender/loan provider- After a court-approved reaffirmation agreement is signed, the lender can enforce a certain percentage of the car loan be paid.
• Keep the car and continue to pay loans- This is how it will turn out in most of the cases. You will keep the car and make payments as usual.
• Redeem the car loan with a different lender.
• Negotiate new terms with the lender.

Under chapter 13, your car loan will not get written off. Depending on how old the car loan is and the car’s current market value, a new payment plan will be created. The interest rates could be reduced for the loan, so there may be a smaller amount to pay every month.

If you are having trouble with your car loan payments or think you are at risk of repossession, contact a bankruptcy lawyer in Sacramento.

Student Loan Debt Solutions That Really Work

First, it is important to know whether you qualify for certain programs. There are a few payment forgiveness programs available. One is the Public Student Loan Forgiveness Plan. This program allows for eligible borrowers to eliminate their balances after 120 months if they meet certain conditions. Eligibility is based on the career field of the borrower. Some examples are government employees, non-profit employees, and some teachers.

If you aren’t eligible for the loan forgiveness plan you could seek a loan consolidation. These can be tricky so be sure to know what to look for. If your loan is a federal loan you will probably have to apply directly through your lender. If you have a private loan you can apply to roll your loans into one, which would result in a lower payment. Be sure to find one with a lower interest rate than you have now. Also, it is important to understand the terms and conditions. Make sure there is no early pay off fee or hefty interest as penalty fees.

Often, filing for bankruptcy in Antelope, CA isn’t an option for debt relief. This is because student loans are a special debt that isn’t easily eliminated through the court. However, you could wipe out other debts like credit cards in bankruptcy to free up income to put towards your student loan debts.

Student Loan Debt Scammers Reaching High

Borrowers are more stressed than ever. From super high payments to accounts in default, borrowers can’t keep up. Unethical debt relief companies are popping up everywhere. The U.S. Department of Education is warning borrowers to look out for scams. Some of the tactics that they use may seem legitimate, but the red flags are often in the hidden details.

First, any company that offers “instant forgiveness” is a warning sign. No company can promise to immediately or permanently forgive your education debt. This is because your student loan debts are special debts that often do not qualify for certain programs. “Obama plans” and even some cases of bankruptcy in Rocklin CA cannot promise this forgiveness. If the company makes these bold claims, walk away.

Another warning sign is up-front fees. Some companies will promise lower interest rates for large, up-front fees. These often result in the company going out of business shortly after taking your up-front money. These pop-up shops come and go in a matter of weeks and leave you worse than when you started. Never pay up-front fees for debt relief services that aren’t run by a legal entity like a lawyer.

Last, be careful of companies that seem pushy or pressure you. These types of sales tactics are designed to scare you. Don’t make a quick decision without making sure they are a reputable agency. No real debt relief offer will be for a “limited time only”.