Filing For Bad Credit Debt Consolidation With No Up-Front Fee |
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The filing of a bad credit debt consolidation petition prior to the actual sale of your home can probably give you the opportunity to stop the foreclosure, keep your home and pay the arrearage over a reasonable period of time while continuing to make the future mortgage payments. The mortgage holder can only continue with the foreclosure if it receives permission from the Court. In most of the cases of bad credit debt consolidation, the Court will not allow the foreclosure to proceed if you are capable of making your current mortgage payments on time. If your mortgage payments are running behind schedule, you should immediately determine your bad credit debt consolidation options. Quick action can possibly avoid the foreclosure altogether allowing you to keep your home and avoiding expensive additional costs and fees. In many jurisdictions, most debtors are allowed to file a bad credit debt consolidation petition without paying any attorney's fee or filing fee upfront. The attorney's fee is approved by the court together with the other administrative costs and has to be paid out of the monthly plan payments, which you make to the trustee. Of course, there are some exceptions to this rule and your attorney will be able to guide you in this matter. One major worry of most customers is what extent their credit will be affected by filing a bad credit debt consolidation proceeding. Your credit is definitely going to be adversely affected. In fact, your filing will be reflected on your credit report for a period of ten years from the date your petition is filed. It is important to recognize that your never-ending financial problems are the real cause of your negative credit, not the debt consolidation. In fact, filing a bad credit debt consolidation petition can be the first step in reestablishing your credit. As mentioned earlier, a debt consolidation filing will be on your credit report for a period of ten years. However, any negative or bad information currently on your credit report will stay on your credit report for a period of seven years and that time period does not start until you pay off your creditors in full or it is written off as a bad debt. Your credit will be affected for a period of at least seven years. The main reason for considering filing a bad credit debt consolidation as the first step in reestablishing your credit is because it provides a starting point for you to establish a new beginning. Once you lag behind in making payment of a debt, which is secured by a security interest or lien on your car, furniture, jewelry, or other personal items, the creditor can proceed to repossess these items. Upon repossession, the items are sold and proceeds are credited to the amount you owe. If the sale proceeds are equal to or greater than the debt, you have no further liability. If the sale proceeds are less than the debt, which is quite often the case, you still owe the creditor the amount, which is deficient. Like any other debt, the creditor can take whatever actions it deems appropriate, including filing a lawsuit against you. The filing of a bad credit debt consolidation petition may give you the opportunity to stop the repossession, keep the items and pay for it under controlled circumstances at a rate you can afford. A debt consolidation plan generally lasts for three years to five years, unless all debts can be paid off in full in a lesser period of time. A debt consolidation plan can't last longer than five years. Under Chapter 13, the court has special powers to help you. These are the powers that private bad credit debt consolidation services do not have. For example, the court has the power to prohibit creditors from attaching or foreclosing on your property, the power to force unsecured creditors to accept a Chapter 13 plan that pays only a portion of their claims, and the power to discharge a debtor from the unpaid portion of debts. Private debt consolidation services have none of these powers. |
