subject: What You Need To Know About Bankruptcy Equity Home Loans [print this page] What You Need To Know About Bankruptcy Equity Home Loans
For some of us, bankruptcy looks like the only option to get out of debt in anything resembling a reasonable length of time. This is never an easy decision to reach. It is also very difficult to get credit again afterward. It's hard, but possible. Even a person who is in the middle to declaring bankruptcy can still qualify for an equity home loan. You need to be aware of some important information about bankruptcy equity home loans.You can discharge your chapter 13 bankruptcy ahead of schedule by getting a bankruptcy equity home loan. When declaring a chapter 13, you are allotted between 36 and 60 months to satisfy all debts. Under certain circumstances, the person's attorney can file paperwork requesting the right to incur a new debt in order to pay off the old ones faster and at a lower interest rate.If this request is granted, the lawyer will then confer with financial institutions to locate a home equity loan that is agreeable to helping the debtor eliminate the debt in the time allowed, and can give a decent amount of cash to eliminate many of the original unsecured debts.It is important to understand that if you already have an outstanding home equity loan at the time of bankruptcy, you are dealing with a secured form of credit. Essentially, secured debts can only be eliminated through any form of bankruptcy by turning over the debtor's house to the bank.This is also true for any home equity line of credit that is established while declaring bankruptcy. The only way to discharge this debt is to pay it back according to the terms agreed to when signing the loan papers or to surrender the property.This fact can work to the advantage of homeowners who are going through a bankruptcy. Financial institutions will be more likely to extend a loan to a debtor who owns property that can serve as proper collateral, and will give the debtor a good incentive to pay the money back.Additionally, bankruptcy equity home loans would be a great way to start mending a damaged credit rating after going through bankruptcy. As long as the loan payments are made consistently and in a timely manner, this will be reported to credit reporting agencies as a positive mark on one's credit report and will increase the credit score.Even though obtaining credit while one is in bankruptcy is difficult at best, a bankruptcy equity home loan can be the step up that a person needs to get back on track and emerge from the bankruptcy in a better position than would have been thought possible. It is a way for a person to pay of creditors faster than could have otherwise been done. The monthly installments will also be lower since the debtor will have more than the normal 36 to 60 months in which to repay the loan entirely. All a person has to remember when using this option is that if the loan goes into default for lack of payment, the home and/or property that was used to obtain the line of credit will be taken.More in lening.
