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Chapter 13 of the US bankruptcy code comes to the aid of the people who, on account of some untoward circumstances, are unable to pay off their debts. Such individuals can approach the court, and the court, if satisfied with the genuineness of the case, can permit them to pay off their debts, partially or wholly, in installments spread over a period of 3 years. In some cases, the period can be up to five years. Yet seeking the help of Chapter 13 has its consequences. Consider a situation where you are unable to pay off your debts and approach the bankruptcy court to obtain relief. Your chapter 13 reports will remain in your credit record for seven years, and this will affect your credit ratings drastically. Lenders will be reluctant to extend you a loan till the expiry of at least two years since the filing for bankruptcy. Obtaining finance is difficult but not impossible. The best option is to improve your credit report. For this, it is important that you get a copy of your credit report and ensure that everything is in order. For example, if after filing for bankruptcy, you pay your bills on time and pay your installments too, this will improve your credit report. It is also important for you to note that if you refinance before the 37 months of bankruptcy, you'll have to first pay the unsecured debts that you filed for in the bankruptcy court. So it is best that you wait past 37 months to avoid the possibility of paying back debt. Also, if you need refinancing within one year of filing for bankruptcy, you can get it from an FHA mortgage. For this, you'll have to prove that you have been paying your trustee payments and mortgage payments regularly each month. You can even contact your bankruptcy attorney for guidance. Remember that refinancing is difficult but not impossible-there is always a way out, provided you look hard enough. |