Bankruptcy is the situation in which one has no funds and the debt that he or she has surpasses his or her income. Therefore, he or she gets stuck with no ability to pay. Bankruptcy is something that is taken very seriously by the lenders because it results to the default payment. The law does not allow the lender to take foreclosure action when the borrower files to the court that he or she is bankrupt. When you need advice on this, you will need to link up with a loan modification specialist to help you avoid such an unexpected situation.
How bankruptcy can act to save your property
Bankruptcy sometimes can save you from the foreclosure action because the court does not allow the lenders to sell your property once you have filed the case that you are bankrupt.
When you file for bankruptcy, it acts as an acknowledgement that you are broke and you don’t have the ability to pay the debt currently.
How bankruptcy ruins your credit
When you are bankrupt, most of the lending institutions will not allow you to avail any loans because they will be at the risk of default payment. Most of the lending institutions have to check out the financial abilities and the income source of the borrower in order to deduce if he or she will be able to repay the loan on time. Most of the borrowers usually fail to qualify for it because of the lack of a stable income source; hence, providing an indication of bankruptcy. So bankruptcy totally ruins your credit score. When you visit a loan modification firm, you are sure to get a good explanation of this matter.