Bankruptcy is a legal process in which in both consumers and businesses can get rid of or repay a portion or all of their debts under the protection of the federal bankruptcy court. There are two kinds of prominent bankruptcy types — Chapter 7 and Chapter 13.
Chapter 7 allows selling a part of your assets to pay off your key debts. The balance of the debts is written off. Chapter 13, on the other hand, allows you to apply for a loan. The bankrupt individual can keep his assets, but he should strictly adhere to a repayment plan decided by the court. Generally, the time period of this payment is 5 years after which the remaining debt might be cancelled.
It is expected that a bankrupt individual will have a low credit score. So, these two issues can make it difficult to get a loan, but it is possible. Because you can retain your assets under Chapter 13, Utah Money Center suggests car title loans as an option. But, you should have full ownership of the car, and there should not be any lien on it.
How it Works:
• The loan involves using your car as collateral. This kind of lending is available for short terms and may come with high interest rates.
• Although it can be a costly form of credit, it is popular and offered by many finance companies, pawnbrokers, and others.
• There are no credit checks, as the car will secure the lending.
• Cash is lent immediately, once you hand over the papers of the car.
You may consider this type of lending, as there are no other alternatives left for bankruptcy cases. The lenders may want to know the truth about your current financial position. They may require seeing your bankruptcy documents and your current income as proof.
You have to keep your lawyer informed if you go in for this kind of borrowing. The bankruptcy courts might have their own set of conditions to be fulfilled. The court must also give its approval. They will make sure that you will still be able to stick to your bankruptcy payment schedules under Chapter 13. They will also see to it that you will satisfy the other terms of bankruptcy as well before they give their approval.