When you need to be sure that you’re able to climb out of debt, it is very important that you take a hard look at things like debt consolidation. Top Ten Reviews has laid out a list of some of the most reputable debt consolidation companies on the market. By taking advantage of the service that debt consolidation can offer, you’ll dig yourself out of a hole.
With this said, what happens if you happen to be undergoing a bankruptcy procedure while you have a debt consolidation loan out? Whether you are dealing with Chapter 7 or Chapter 13 bankruptcy procedures, you will want to know exactly how the debt consolidation loan will be handled. This article will lay out detailed information about debt consolidation loans, bankruptcy procedures, and how debt consolidation loans are handled when you are going through the process of bankruptcy.
What is a debt consolidation loan?
These arrangements are loans that take all of the debt that you have accrued over some years and buys it out. The company will be able to buy out your debt so that you can then pay them back in exchange. This way, all of the debt that you have will be handled under one bill. This will be handled just like any other loan that you take out, in that it will be set for a number of years, will have an interest rate attached to it, and will consist of monthly payments.
Many people turn to debt consolidation in order to climb out from debt that can be seriously crippling to them. This is an excellent way to turn because it provides the the opportunity to make sense of your debt, organize the debt, and then pay it off. Some people enjoy debt consolidation because it is more straightforward to pay back one company as opposed to the numerous companies they owe money to.
How are debt consolidation loans handled?
There are lots of advantages that you can enjoy when it comes to debt consolidation loans. First and foremost, these loans are practical and helpful to your life as a whole. They will be able to help you wipe out the differentiation in your debt. For instance, if you have 15 different debt-related accounts open, this can become cumbersome and stressful when dealing with all the payments and interest rates at the same time.
For instance, creditors might send your account to collections or, at the very least, might continuously call you in order to try to get their money. It might be difficult to go about your everyday life knowing that you have all of these accounts open, so turning to a debt consolidation company will be helpful to you.
Turning to National Debt Relief will give you the opportunity to have your debt combined into one single bill that you will get in the mail every month.
How can I get a debt consolidation loan?
When you are ready to get a debt consolidation loan, you will need to touch base with some professionals that can help you out. The company should be able to help you whether you are dealing with debt related to medical bills, credit cards, student loans, or any other type of debt that has been piling up for you. You can always research a variety of companies to see what sort of debt consolidation loan products they can offer you. For instance, you can check out a top 10 list of some of the most reputable debt consolidation companies that are available.
Once you have gone through the list of many different debt consolidation companies, you will be able to look into the rates that they offer. Another great benefit of debt consolidation loans is that they usually have low interest rates when compared to other types of loans. Reach out to a few debt consolidation companies and ask them for an estimate. When they give you an estimate, you will be able to know exactly how much you can get pre-approved for and at what rates. In many situations, this will be a matter of your credit score. While debt consolidation loan companies will approve people with fair or poor credit, you will get the best interest rates available which will make it much easier for you to pay off these loans.
When you reach out to these loan companies, they will figure out how much per month you are able to afford and will then set your loan terms up accordingly based on this. They will take account of your income, assets, and other factors in order to make sure that you are able to get the loan that you need to simplify your debt to the best of your ability.
Understanding The bankruptcy process
Since this article goes into detail about what happens to your debt consolidation loan during the bankruptcy process, you need to develop a foundation of what the bankruptcy process entails. Read on to learn a little bit about bankruptcy, so that you are well prepared if you need to go through it.
What is bankruptcy?
Bankruptcy is a legal filing situation that allows you to get debt forgiveness in order to build back up your finances. This sort of filing allows you to increase your financial standing and rebuild your life, but this is something that stays on your record for seven years. It is something that you will need to think about and make sure that you are doing what is best for you. Bankruptcy should be considered as a last resort, only.
What are the differences between Chapter 7 Bankruptcy and Chapter 13 Bankruptcy?
There are two different types of bankruptcy that you are able to file – Chapter 13 bankruptcy and Chapter 7 bankruptcy. Both serve the same purpose in that they allow you to discharge your debt in a legal manner. With Chapter 7 bankruptcy, you will receive debt forgiveness that may involve the liquidation of assets and other matters. Once you file for bankruptcy, creditors are not able to contact you to settle the debt anymore, since it is taken care of from a legal point of view. Chapter 13 bankruptcy is a bit different, in that it consists of a repayment plan. This plan, which usually lasts over a period of about five years, will allow you to get rid of the debt that you’re dealing with and get back on your feet accordingly. Each type of legal bankruptcy filing has its pros and cons depending on your situation, so it is very important that you consider carefully, learn what is required of you, and decide which type of bankruptcy filing will be the most reasonable for you to undergo.
What should I know about undergoing the bankruptcy process?
This is a very important decision, so undergoing credit counseling is something that can only help you in this situation. Depending on where you live, credit counseling might be a necessity from a legal perspective as well. It is important that you do everything that you can to get legal assistance when filing for bankruptcy. Reach out to some bankruptcy attorneys who can assist you with this sort of service so that you have the protection that you need when going through this legal service. These attorneys will guide you in the direction of the type of bankruptcy that you should file and they will go over your application with a fine-toothed comb.
Your attorney will also help you to deal with your debt consolidation loan as it pertains to your bankruptcy filing as well.
What should I do when I need to go through the bankruptcy process?
Keeping the future in mind is the most important part of undergoing the bankruptcy process. Since this will stay on your record for many years, you need to make sure that you know what you are going to do each and every step of those years. You should plan to get your finances in order so that you never have to deal with this sort of situation again. In the same way that a debt consolidation loan can be a positive thing if you handle it properly, a bankruptcy process can also be a positive if you allow it to be. You will need to set up budgets, get the help of financial tutors, and to do everything that you can to keep your money in order for the rest of your life.
Understanding how debt consolidation loans are handled throughout the bankruptcy process
If you happen to have a debt consolidation loan during the time period that you are filing for bankruptcy, you need to understand exactly how this will apply. The debt consolidation loans will be treated as unsecured debt. Unsecured debt means that you will be able to have this debt discharged just as you would other debt. Because of this, filing for Chapter 7 bankruptcy might be what you need to do if much of your debt is in the form of a debt consolidation loan.
You have to get the help of a bankruptcy lawyer who understands these processes because you run the risk of having your debt considered “bad faith” if you do not handle it accordingly and if it raises suspicion. Having the help of an attorney who can represent you will give you the opportunity to make sure that you are treated fairly in bankruptcy court, while also having your debt consolidation loan discharged.
So when you reach out to a reputable company, you will have nothing to worry about should you later decide to file for bankruptcy. You will be in good hands and able to get the help and service that you need both from debt relief professionals and bankruptcy professionals when those situations arise. Understanding what is expected of you will make the process clearer for you.
When you take advantage of these tips, you will be able to learn a little bit more about some avenues for discharging your debt. This is a must-have situation if your debt has compounded to the point that it is hard to manage. Many people find themselves in this situation, so you don’t need to feel as though you are alone in this regard. In fact, in recent years, nearly 1.6 million people filed for bankruptcy
You will need to reach out to a high-quality debt consolidation company that is able to assist you.