Many have doubt that while the borrower are in chapter 13 bankruptcy can’t refinance his mortgage loan. It is true that when once you are in bankruptcy you have very low chance to get out of the bankruptcy but nowadays the chapter 13 bankruptcy can be stop by the refinance with a lender’s permission to do so. As the chapter 13 bankruptcy is a legal process of bankruptcy under the USA Bankruptcy federal act which is written in 13 number chapter of the US bankruptcy Code.


In the chapter 13 an individual with fixed source of income can get the chance of reorganization of his dues under supervision of the federal court appointed trustee.  The US federal bankruptcy court will reduce the bankruptcy chapter 7 cases by the use of chapter 13 bankruptcy plans. In the chapter 13 an individual only who have option of steady earnings or income-receiving will allow to experience the financial reorganization of his debts under proper supervision according to a court-passed plan.

In this a court-approved plan the borrower can safe from the bankruptcy process and losing their home too. Before you proceed to get this court assistance you have to find a good mortgage lender who will be agreed to refinance with normal interest rate even in a chapter 13 bankruptcy case. After that you arrange a bankruptcy attorney to talk with the bankruptcy court appointed trustee to improve your credit condition and smooth clearing of all debts step by step. On the other hand you can refinance with your home equity loan under permission of the trustee.

In any ways your debt will be removed from your head by the help of the US Bankruptcy Court’ assistance plan. In this way you can refinance your home while you are n chapter 13 bankruptcy.

1. Bad Credit: A bankruptcy will absolutely negatively effect your credit. A Chapter 7 or Chapter 13 bankruptcy can actually put a big black mark on your record for as long as 10 years, and your credit score drops 150 to 250 points. This could spell trouble in many avenues, including job hunting.

2. You CAN lose your property: A lot of people don’t know that if a creditor doesn’t get enough of a payout they can sue and depending on your state’s laws and your own personal situation, you can lose your car and your home if you have one.

3. Problems with Employment: Bankruptcy can do a lot more than make it difficult to rent or own a home or car because many employers now are requiring credit checks as part of their screening process.

4. It goes on your public record. A bankruptcy stays on your public record for 20 years, not something to be taken lightly.

5. You may still owe money: Declaring bankruptcy does not eliminate all debts. There are certain debts that cannot be discharged even after you say you’re bankrupt. This includes student loans, child support, alimony, back taxes, and certain judgments can’t be discharged.

There are alternatives to filing bankruptcy. The first recommended step is to find a credit card debt settlement program for a free consultation.

Evelyn Novelo is a guest author for Franklin Debt Relief, a leading credit card debt consolidation company in Chicago, Illinois.

When you get behind on your mortgage payments you need to decide to go with option for foreclosure or bankruptcy but both option are neither attractive nor good for your credit score. When you have no other option to survive you have to choose the less bad one between these two options. There must one be better upon another that is depending on homeowners situations.


The person only who not like to hold his property the foreclosure may be little attractive to him but others must prefer to filling bankruptcy then foreclosure. Although both will make negatively affect on your credit for up to 10 yrs you may not able to buy property or real assets for next 10 yrs. But a well furnished filling of bankruptcy will make less affect then the foreclosure so you can quickly recover your credit position by getting a job or new opportunity of earnings and at fast make purchase with cash to rebuild credit score.

Once you able to recover your credit score you can get back you old good life. If you prefer to foreclosure your home property, you will even not able to eligible for employment as because of you credit report will reflect all about your character what you are and your ability to pay back their obligations. The bankruptcy process will eliminate all your dues or settle your credit and you get a fresh start to life, but when you filling a foreclosure you may not able to clear off all your debts so problems may still remain on your life and you are also locked for taking new loan for next 7 years.

After all it is clear that you must choose the best one according to your situation but although a foreclosure remains on your credit score for 7 years and bankruptcy stands for 10 years other then that bankruptcy is better and quick recovering to fresh life.

The most common form of bankruptcy is known as bankruptcy chapter 7 in the united state. There is some description of process of liquidation under the lows of bankruptcy of the united state. This type of bankruptcy may be filled by an individual who have no dismissed cases for bankruptcy within 180 days and a business may also file Chapter 7 bankruptcy if the business is unable to pay off its creditors and bad condition debt collection. Generally bankruptcy is happen only when the debtor has no property to sale to repay his debt and he passes the entire chapter 7 qualifying process of bankruptcy.

The Chapter 7 bankruptcy is a process of several criteria. According to the new amendments the debtor has to pass now the means test which is a two steps process of calculation of debtor’s income. The first step of means test is the comparison between debtor monthly income and median income of the state. If the monthly income is less then median income of the state, the debtor can qualify for bankruptcy filling and if his monthly income is higher then median income, he must has to go for the second step of the qualifying process which is the calculation of debtor’s last 6 months disposable income . If the debtor’s 6 months disposable income is less then $ 6,000, he passes the means test and he can file a petition for bankruptcy.

The Chapter 7 bankruptcy is now very famous as liquidation bankruptcy. But before filling it a debtor must has to consult with any bankruptcy attorney who can help to qualify bankruptcy according to the state law.

Debt settlement and bankruptcy, each has its own advantageous and disadvantageous. Before taking decision to choose one particular, it is very important to know about each option and how one differs from other.

The main difference between debt settlement and bankruptcy is that, debt settlement is an agreement between you and lender that is taken care of out the court steps whereas the bankruptcy is legal procedure that is taken care of attorney inside the court steps to discharge liability.


If bankruptcy is filled perfectly and one who files qualifies for it, the court can order or enforce the creditors to discharge the debt. In general there are two types of bankruptcies for consumer to file. They are chapter 7 and chapter 13.

Chapter 7 bankruptcy is to be filled when you want to eliminate debt and chapter 13 to restructure debt into a repayment plan based on how much the debtor can repay, not necessarily the whole amount the debtor owes. According to earlier laws of bankruptcies laws, a person who files bankruptcies will manage to discharge whole debt that he incurred till then but recent laws that amended do not allow to discharge some debts like student debt secured by federal government, taxes etc.

In addition, the bankruptcy filled will be reported to credit rating agencies and that will stay on your credit report for at least 10 years. Bankruptcy on your credit report will have negative impact on your credit score and as a result your future credit will be impacted.

On the other hand, debt settlement is a process that is carried out of court agreement made between debtor and creditor. The agreement is made for the benefit of both the debtor and creditor. With debt settlement, the debtor will not manage to discharge the debt as in case of bankruptcy instead a repayment plan that is in favour of all the creditors of debtor will be made. For debt consolidation to work, it requires that each and every creditor must agree to debt settlement and its repayment plan terms.

Debt settlement in the same way as bankruptcy will be reported to credit rating agencies. Debt settlement will remain on your credit report for 7 years. It is natural that credit score will be impacted in either of the option and if you are in such a position to opt either of the option, then you are already half way down of your credit score and at the same time with any option total debt will not be discharged.

Since the impact of debt relief options is much less than bankruptcy and they are easier for you to handle the procedure. Choosing the debt relief option enables the lender to get some amount from you instead of walking away will all the debt.

You can avoid foreclosure if you are aware what are the means to avoid foreclosure. Foreclosure is the worst possible financial condition. Once you face foreclosure, it drops your credit score by 250 to 300 points and foreclosure is shown in your credit report for almost 10 years. How to avoid foreclosure is a question that many people wants to know in this financial crunch. You may have taken a big amount of loan even with higher interest rate to buy your dream home. But now it seems to you impossible to make the monthly mortgage payments and it seems that foreclosure is knocking at your door.

If you have missed 2 or 3 months monthly mortgage payment and got the letters from your lender, then please do not ignore those letters and do not avoid the lender. If you avoid the lender then you may not be able to avoid the foreclosure. As soon as it seems impossible for you to make monthly mortgage payments or any difficulties, call your lender or meet him to inform then problems that you are facing.

Your lender is the best person to help you out in this position. Believe me, no lenders wants their clients to face foreclosure. They will help you at their best if you inform then your problems. Ask your lender if there is any alternative option available for you to avoid foreclosure like forbearance, reinstatement, Short sale, deed in lieu of foreclosure etc.

Some people even files Bankruptcy to avoid foreclosure. So please do not delay. You should take quick actions when it seems difficult for you to make the mortgage payments

Discuss bankruptcy filing option and San Diego Foreclosure Services with a reliable law firm.

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Can Bankruptcy Stop Foreclosure?

Bankruptcy can stop foreclosure but bankruptcy should be the last option to choose to stop foreclosure. Do you know that thousands of people face foreclosure every year and the number is increasing in this recession. There are many ways to stop foreclosure and Bankruptcy is of the ways to stop foreclosure but this should be the last option to save the home form foreclosure. Filling bankruptcy will stop foreclosure immediately and the entire process will be on hold and this gives the foreclosure victims a little bit of time to reorganize themselves. The foreclosure victims can also pay off their creditors with an affordable repayment plan.

The foreclosure victims also need to know the consequences of filling bankruptcy. This will certainly help then to stop foreclosure but it will also hurt their credit hugely and they may not be able to get approve any long in next 5 years. If they miss any payment of the repayment plan then the entire foreclosure process will start once again but the fact is when there is no option available Bankruptcy is a great help of the Foreclosure victims to save their home.

Filling bankruptcy is an expensive process but it is better to take help from a reputable Bankruptcy Attorney because there are some attorneys who ask their clients to switch filling chapter13 to chapter7 to get more fees but the reputable attorneys do not do so and give the best possible suggestions to get out of the problem. At last I would say Bankruptcy is a great relief provided by the Federal government and if there is no options available for you to stop foreclosure, then do not hesitate to file bankruptcy. Bankruptcy is at least far better than foreclosure.