Student loan after bankruptcy
There are numerous lenders who specialize in loans for people whose credit history is blemished with bankruptcy. However, you must make a through evaluation of the terms and conditions before opting for a lender. Most are just trying to cash in on your miserable state of financial affairs, and charge exorbitant interest rates. There are three types of bankruptcies and which one you choose to file can make a difference in the loan eligibility.
Chapter 7 is the most commonly filed bankruptcy in the US and can be filed by either the debtor or the creditor by way of a petition. The court then sells the non-exempt property of the debtor, and divides it among the creditors. Bankruptcy filed under Chapter 11, 12 and 13 can be a little more complex and is not very common. This involves the individual having to clear his debt from his earnings. Depending on what type of bankruptcy you filed, the chances of you obtaining a loan can vary. If you have filed Chapter 7 bankruptcy, and handed over most of your belongings to a trustee appointed by the court, then you will have to wait for two years to be eligible for a loan. If its Chapter 11 bankruptcy that you have filed, which require to reorganize your businesses to pay off your creditors, then you will be deemed eligible for a loan as soon as your credit is cleared. Regardless of what type of bankruptcy you have filed its imperative that you built your credit score and present yourself as someone who can be relied upon. This can go along way in ensuring that you get your loan.
Bankruptcy is not exactly the free ride that many people mistake it to be. If done incorrectly it can lead to disastrous consequences that could shadow you for the rest of your life. A bankruptcy filing will remain on an individuals credit report for ten years and can impair a persons ability to procure a loan, get a job or buy a house. Once a debtor files bankruptcy he cannot file another for another six years, which means that any debt that is incurred after the first bankruptcy filing must be paid in full.
Some years back, Congress had enacted a legislation that prevented students loans from being eliminated through bankruptcy. This not only applies for federally issued loans but also to those which are privately funded. This basically means that anyone with a student loan, even if it mounts to more than $100,000, has no other choice but to repay it even after filing for bankruptcy. Bankruptcy may wipe away other personal loans but student loans, unfortunately remains. For individuals with a large student loan obligation, it would be wise to seek consolidation through their lender. If possible try negotiating with the borrower for a more lenient repayment option. Another possibility is to fuse payments by other loans like home equity loan or HELOC. The congress has made it clear that money spend on education is money well spent and you are bound to repay it
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