Financial Articles

There are lenders in the market willing to refinance home loans for people who have gone through a bankruptcy. However, there are many things you need to know before jumping in to the refinance loan market. Otherwise, you may end up in a worse credit situation than you started.

Time is essential

You need to be very careful when it comes to timing. It is highly improbable that you’ll get approved for a refinance home loan unless at least six months since your bankruptcy has been dismissed have passed. There is no way round this waiting period and you should be very aware of this because applying for a loan and getting declined will affect your credit negatively. Even if the lender doesn’t report the decline to credit agencies the sole credit report pull will affect your credit score negatively.

Credit Requirements

Even though a mortgage loan is a secured loan, bare in mind that a past bankruptcy will show on your credit report when you apply for a refinance home loan. You need to show the lender that you have an impeccable credit behavior since then. In order to do so there are a few things that you should do: Make sure you pay your bills on time and never (absolutely never) miss a payment. This will look good on your credit history. Also, if you can’t get approved for an unsecured credit card, get a secured credit card so you can establish a credit history of timely payments with a credit card.

Searching for the right lender

Finding the right lender is not an easy task, but can be achieved with patience and proper research. Contact as many lenders as possible in order to get loan quotes from them. You can search the net for refinance mortgage loan lenders. However, make sure that by filling their forms you are not authorizing them to pull your credit report. Instead contact someone in the lending institution and ask for an informal quote. You’ll tell him your true credit situation and he will give you an approximate quote. This way you’ll have an idea of what you will be facing but you’ll avoid too many credit pulls showing on your credit report which would otherwise affect your credit negatively.

Once you’ve decided which lender is best for you, you can apply for a refinance mortgage loan. Bear in mind that since you’ve gone through a bankruptcy recently, the interest rate on your loan may be higher than regular home loan, however, if your monthly payments are too high you can extend the loan repayment program in order to reduce them. Once you’ve recovered your credit score you’ll be able to refinance your loan again and get better terms. But in the meantime, this refinance loan will help you improve your credit score and recover from bankruptcy.

Most diseases including cancer and heart problems are easier to cure if detected early. Similarly, most sick companies can be turned around if the problems are discovered early. Sick companies need to be placed urgently into the intensive care units as the normal treatment regime is ineffective.

Unfortunately, owing to denial, ego or pure ignorance, many sick companies do not seek help till it is very late. Troubled businesses usually try to conceal their problems from others for obvious reasons – the creditors may stop their loans, suppliers may stop supplies, employees may jump ship etc. However, like sick people, sick company need to seek urgent help. They need to engage specialists to facilitate the restructuring programmes and to face the new harsh realities before it is too late.

Much like human health, more businesses are also destroyed by neglect than any other causes. This is why regular health check is vital to prevent any unexpected health problems, detect them early so that appropriate remedies can be administered. The traditional accounting methods such as balance sheets and profit and loss statements only capture the measurable financial aspects of the company at a certain point in time. Furthermore, the real financial health of the company can be masked by deliberate accounting irregularities as in cases at Enron and Worldcom. By the time the sickness is visibly evident in the company’s accounts, it may already be too late to take corrective action to reverse the situation. Oftentimes, when the accounts show red, the company is extremely sick or suffering from haemorrhage. There are many other non-quantifiable financial factors that may impinge upon the health of the company. These may include high staff attrition, low morale or an incompetent CEO.Usually, there are ample warning signs or symptoms of impending trouble. However, these warning signals are often ignored or suppressed; hence the onset of a crisis comes as a surprise.

Early detection of business problems is vital to sustaining a company’s growth, manage the crisis effectively and to contain the economic distress. Business problems rarely occur suddenly. Most problems develop over a long period of time due to a series of financial, legal, operational and strategic errors or miscalculations that went largely ignored or undetected by management. Some obvious examples that a company is heading down the wrong course include persistent operating losses, high key staff attrition, loss of morale and market share.

It is important to pre-empt any problems from arising by looking out for warning signals. Therefore, a proverb that says: “The superior doctor prevents sickness. The mediocre doctor attends to impending sickness. The inferior doctor treats the actual sickness.”

When the 2005 Bankruptcy Act was created, this affected the bankruptcy laws in California, as well as other states across the country. Within this act, those involved in California bankruptcy are required to participate in credit counseling. This participation must occur within 180 days of the bankruptcy filing. Furthermore, any person filing for bankruptcy is also required to complete a course in financial management.

This means that any California bankruptcy filer must have an evaluation of the expenses and their income. By doing so, you can determine if a chapter 13 or a chapter 7 California bankruptcy is right for you. The new bankruptcy laws established in 2005, requires a great many new things, all of which affects the California bankruptcy laws as well.

As a requirement, you must undergo an evaluation. What will happen is that a court official will create a document that details the past six months of income you have received. They will then compare your income with that of the California median income. In order to file a chapter 7 bankruptcy, your income must fall below the median income within California.

However, just because your income does not fall below that level, does not mean you cannot file a chapter 7 bankruptcy, it does mean that other factors will need to be considered in making the determination. However, in most instances, when the income is above the median income level in California, a Chapter 13 filing is necessary.

Before you even consider starting the process of California bankruptcy, you should gather some documents. Things you should have include a list of your property, a list of your debt, a list of expenses, two years of debt, as well as records of finances and income. As you gather your paperwork, make sure you include documentation for outstanding credit card debt or loans, previous tax filing records, titles to automobiles, and titles to any property you own.

The next step in filing a California bankruptcy is to obtain the services of a reputable bankruptcy lawyer. This lawyer can guide you throughout the entire process, as well as aid you in obtaining the necessary forms needed in California to file for bankruptcy. The forms needed are referred to as “schedules”. Schedules help you in obtaining the documents you need in your case.

After you or your attorney has filed the bankruptcy documents, creditors cannot legally contact you in any way regarding the debts you have included in the bankruptcy case.