Bad credit loans

June 28, 2008 · Filed Under Credit, Loan · 1 Comment

People who are going through hard financial situation and have a questionable credit history can consider bad credit loans as one of favorable options to meet the urgent need of cash. There are two types of bad credit loans. One is called secured bad credit loans and the other one is called unsecured bad credit loans. Each type of bad credit loans has its own advantages and disadvantages.

Secured bad credit loans:

You get a secured bad credit loan in exchange for a security deposit. This is equal to the amount of loan applied by the consumer, or valuable assets owned by him. You will get back the security deposit once you have paid the loan amount in full without any defaults. Most people consider these types of secured bad credit loans to build up their bad credit history. They want to see some positive accounts in their credit report that will help them in getting future credit. Using that money, you will have the option to open multiple secured credit cards and boost up your credit file with positive payment history. The FICO scores will go up because of the account variety. The only downside of this type of bad credit loan is that you have to show some assets to secure the loan. And if you default in your payments, your asset will come under risk.

Unsecured Bad Credit Loans:

This type of bad credit loan does not require you to come up with the money or assets to secure the loan. You don’t have to show any collateral to secure the loan. The disadvantage is that these types of unsecured bad credit loan are charged with very high fees and interest rates. You might be paying an interest rate of 30% or more on this type of loan. If you are in a financial trouble and are paying just a little more than the minimum, you will hardly make any dent on the principal amount. This kind of loan is not good for those people who are already going through a hard financial situation and can’t afford to make the monthly payments.

If you are looking for a bad credit loan, make sure that you have the ability to pay back the monthly payments. This type of loan will help you to build up your bad credit history as long as you are making monthly payments on time. Be aware of the fact that if you default in your monthly payments, your delinquency will still be reported to the credit bureaus even though the bank has your assets as a security.

Tags: Bad Credit Loans, Credit, Loans

Debts discharged in bankruptcy

June 20, 2008 · Filed Under Bankrutpcy, Debt · Comment

The word bankruptcy discharge of debts means legal eradication of a debt. When a debt is discharged under bankruptcy, it can no longer be enforced against the debtor, however if any liens are put against the debtor, those debts will still survive in the bankruptcy filing process. If you are overwhelmed by your

existing debts, you can get your financial liabilities erased or completely wiped off. However, discharge of a debt is allowed for certain debtors and for certain cases. For example, non-individual debtors cannot get their debts discharged in chapter 7 bankruptcy. If a partnership or a corporate debtor is liquidating under chapter 11, and the business is stopped upon completion of the plan, the debtor cannot receive a discharge.

People who have committed fraud against the court by lying or by deceitful methods cannot get their debts discharged and will remain liable for pre-petition debts.

Certain kinds of debts are not discharged under chapter 7 bankruptcy.

These are:

1. Debts resulting from fraud, misuse of funds, embezzlement, or larceny

2. Debts arising out of false pretenses, including bogus representation, fraud or by presenting false financial statements.

3. Certain kind of tax debts

4. Debts resulting from the purchase of luxury merchandise or cash advances.

5. A debt resulted due to negligence of obligations to list in the bankruptcy schedules.

6. Alimony or child support, or debts resulting out of a divorce or separation

7. Student loans

8. Debts resulting from willful and malicious injury.

Debts that can be discharged under chapter 7 bankruptcy filing are as follows:

1. Auto accident claims