We all learned about the Hobbico bankruptcy filing on Wednesday, January 10th Hobbico is in dire straights and filed for protection under the bankruptcy laws or Chapter When I think of Hobbico, I think of the people that work there and enjoy making a living in one of the toughest industries this side of snow chain installation. Directly from their website:
Indeed, the way bankruptcy is sometimes portrayed, you'd think an attorney would just fly in through your front door with their magical wand and whisk away all your debt problems while you just sit back and relax. While bankruptcy can be beneficial in times of financial distress, filing is far from easy and can put you at a financial disadvantage in a number of ways.
Attorneys often tout bankruptcy as a quick and easy way to get out of debt, but they downplay some of the serious long-term consequences that it can cause. Before you decide if bankruptcy is right for you, consider these seven realities first: It Will Remain on Your Credit Report for Years A Chapter 7 bankruptcy may only take four to six months to complete and excuse you from many debtsbut don't think that all your problems will be solved.
Bankruptcy Filing Becomes Public Domain Bankruptcy is a legal procedure, which means when you file for bankruptcy, it becomes public record. That means your name and other personal information will appear in court records that the public including businesses, banks, clients or even potential employers may access.
Your student loans won't be going away, either. Bankruptcy courts have the power to eliminate many unsecured debts such as medical bills and credit card balances, but student loan debt must still be repaid in full unless you participate in one of the federal government's loan forgiveness programs.
Good Luck Finding a Decent Home Loan any Time Soon In a lending environment where banks are already skittish about loaning anyone money for a home, it hardly comes as a surprise that bankruptcy filers face even tougher challenges in landing a mortgage loan.
According to the Home Buying Instituteit can take a recent bankruptcy filer one to four years before they're approved for another mortgage loan. Even the Federal Housing Authority requires applicants to wait at least two years after declaring bankruptcy before can they apply for a FHA home loan.
Even if a recent bankruptcy filer was lucky enough to nab a home loan under their circumstances, they probably wouldn't want to keep it after seeing the interest rates they're offered.
If your credit score is below after you've filed for bankruptcy, you can expect to pay an interest rate of 6. So, if a borrower with good credit lands a mortgage rate of 4. The offered rates may become more attractive as your credit builds, but the cost will almost always be higher than for non-bankruptcy filers; Something to consider if you are contemplating buying a home anytime soon.
In fact, during the second quarter ofan astounding Missed Payments Under Chapter 13 Can Be Personally Devastating If you fail to make payments in a Chapter 13 bankruptcy, the trustee in the case will either convert the bankruptcy to Chapter 7 bankruptcy liquidationor the case will be dismissed altogether.
Either option is disastrous. If your bankruptcy is converted to Chapter 7, all of your non-exempt property -- family heirlooms, bank accounts, investmentssecond cars and vacation houses, just to name a few -- will be sold and distributed to your debtors.
If the case is dismissed, you will lose all bankruptcy protection and go back to square one, still liable for all your debts.
Bankruptcy is not something to take lightly. There are thousands of people who have successfully emerged from bankruptcy, but it is vital to be informed of all the risks and benefits. This article provides general background information only and is not intended to serve as legal advice or as a substitute for legal counsel.However, a negative aspect of the discharge is that it does not extend to your property.
For example, if your home loan lender has a lien on your house, the lien will remain after bankruptcy, and the lender could be free to foreclose on your home if you default on your loan.
You may be able to work.
Filing bankruptcy has been called the "nuclear option" when it comes to personal finances, because it creates dramatic and far-reaching effects.
However, while the word "bankruptcy" still carries a stigma in some circles, in many cases it is the right financial move. If you're considering bankruptcy, here's what you need to know about how the process can negatively impact your life. What are the negative effects of bankruptcy?
Call us for a free consultation Within 2 minutes of the statement, the social universe was a blaze with woulda, coulda, shoulda’s, arm chair quarterbacks, “what about this company?” statements and on the negative side, the trolls that try and kick someone/company when they’re down.
An “underwater” mortgage is when the balance of the mortgage loan is higher than the fair market value of the property. This type of situation became common following the housing market crash that occurred in the late s when many homeowners saw their homes lose a .
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