Bankruptcy can be in association to the Italian Renaissance Period. Back then, if a merchant debtor were unable pay his debt, then the creditor would destroy his trading bench. This is called Banca Rotta, from this bankruptcy got its name. Of course, back then the penalty was harsh and primitive. But for some people, the penalties and the destruction of their credit can be pretty harsh too.
Nowadays, the Bankruptcy Law is being utilized and followed to give protection to both the debtor and the creditors. All parties generally accept the law. In some way, it takes away the competition aspect and let both parties cooperate for the maximum benefits and satisfaction of their well-being.
It will also give the debtor a second chance in order to rebuild his or her business. As to quote, they say almost all business owners failed a couple of times before they finally made it big.
People most frequently have the misconception that filing for bankruptcy is in many times to be the end of their world. Just because you file for bankruptcy does not mean you will never have to get back on your feet again financially. For a point of fact, the main purpose of filing for a bankruptcy loan is for you to re-establish your life and finances again.
A bankruptcy loan can provide someone the opportunities that he might not have otherwise, for instance the ability of owning a house and automobile or starting up a new business.
Most of the loans are recommended for persons who have declared themselves bankrupt and only after their cases have been discharged and their creditor have been paid.
For Chapter 7 bankruptcy, the person in debt must wait for 2 years after their bankruptcy has been filed for them to apply for a loan. They can apply only after their cases have been dismissed. On the other hand, in Chapter 13, the debtor must first pay in full amount to his creditors, before he can apply for a larger loan.
The only means to reapply for a loan is to prove to your lenders that you are capable enough to pay the loan back and is no longer a high-risk borrower. The most effective way to re-establish your credit is by paying all the bills on the allocated time and retaining your credit card and a good credit rating and report. After doing all these, you can request the credit company to write a letter testifying that you are no longer a risky borrower.
Nevertheless, not all loans are given to people who have spared their life and soul out of the risky and shameful situation. Sometimes, people in debt are tendered with the opportunity of having a loan as a payment alternative they can use to reimburse their creditors, but this is indeed a recipe for disaster.
The last thing a person in debt needs is to have another creditor while they are still buried with liabilities to pay. Truly, a problem would not be a solution to another problem.
In applying for bankruptcy loans, one should be vigilant and cautious enough to read and understand all the terms and conditions made by the company. Also, have the determination to pay all the debts made, keep the budget tight if you want to get out of your tragic financial situation.
Loans can indeed serve as getting a debtor's life back in order after bankruptcy. Credit, loans, and mortgages can provide the perfect means for a previously bankrupt individual or company to finally re-establish their credit.
Article Directory: http://www.articletrunk.com
Dean Shainin offers online tips and debt advice. For more information, articles, news, tools and valuable resources on bankruptcy and debt solutions: Bankruptcy Loans
Please Rate this Article
Not yet Rated