Bankruptcy filings in Rochester down from last year

Buying items or spending money on credit means you are making an obligation to pay for those items at a later date. Add in medical bills, student loan payments, and other regular bills and you might have more money going out of your home than coming into it. When you have to spend more than you make, keeping up with payments isn’t likely. There are some instances in which you might be able to afford the payments when you get the item, but later in time, making those payments gets overwhelming. In these cases, filing for bankruptcy might give you the fresh start you need to get back on track financially. In New York, the number of people who are seeking bankruptcy protection has gone down recently. There were 134 Rochester-area filings for bankruptcy, which includes filings in Monroe, Ontario, Wayne, Livingston, Yates, Chemung, Seneca, Schuyler, and Steuben counties, in January of this year. Last January, there were 179 petitions for bankruptcy. That is a 25.1 percent drop from last year. These filings include Chapter 11 business filings, which are petitions to reorganize. Chapter 7 liquidation bankruptcies and Chapter 13 debt reorganization filings are also included in this number. It… Continue reading

Refinancing after a Chapter 13 bankruptcy

Many New Yorkers may file for Chapter 13 bankruptcy in order to pay back overwhelming debt through manageable payments. In order to free up some extra cash to pay off these debts, consumers may consider refinancing their home. Is this even possible after a Chapter 13bankruptcy? It all has to do with timing. For a homeowner with a recent bankruptcy, refinancing may be next to impossible. However, there is the Home Affordable Modification Program, which allows homeowners to refinance while in the middle of a Chapter 13 bankruptcy. The request must be submitted to the lender of the current mortgage. The chances of approval are greater a year or two down the line. For a Federal Housing Administration mortgage, the bankruptcy must have been finalized for at least one year. The homeowner must have paid all payments on time during that period. In addition, he or she must get permission from the court before refinancing. For conventional refinancing, the wait time is extended to two years. If the bankruptcy is dismissed, the wait time is four years. While a bankruptcy does offer a fresh financial start, it does come with some challenges when trying to refinance a loan or apply… Continue reading

Why Chapter 13 can be frustrating for those seeking new credit

When New Yorkers take on debt to the point where making monthly payments becomes too overwhelming, they may file for Chapter 13 bankruptcy. This type of bankruptcy allows consumers to reduce credit card debt by making manageable payments over a five-year period. But when it comes to rebuilding credit, it can be a Catch-22. Consumers need to apply for new credit cards in order to rebuild credit, but at the same time, lenders are scared to extend credit to those who are going through bankruptcy. Although approval is possible early on in a Chapter 13 bankruptcy, sometimes the most useful tip is to wait it out. Debt eventually declines as consumers pay it off. This results in a higher FICO score, which makes consumers more attractive to lenders. This takes time, though. Approval for a new line of credit won’t happen overnight. There will be rejection, so it’s important to take everything in stride. For those who want to try securing credit right away, a secured credit card may be the way to go. A consumer puts down a certain amount of money — typically several hundred dollars — as collateral and this determines the card’s credit limit. So if… Continue reading

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