Bankruptcy is a very bad situation to be in, for any individual or an organization. But even in the tough times, there are ways out to tackle such situations. Bankruptcy Chapter 13 code which helps individuals only, to come out of financial crisis under the guidance of a federal bankruptcy court. A debtor with a regular income can restructure his financial position with the help of Bankruptcy Chapter 13 code. In this the debtor has to propose a plan with the help of which he or she can repay all his outstanding debts in 3 to 5 years of time period. And five years is the maximum time period of the repayment plan. In reality the Bankruptcy Chapter 13 code has many added advantages over the chapter 7 bankruptcy code. Unlike the chapter 7 bankruptcy code, in the Bankruptcy Chapter 13, the individual can atleast save his house and other assets from foreclosure. All the proceedings will come to halt after he files for Chapter 13 and also get a period of 3-5 years to pay back his debt to the creditors. The Bankruptcy Chapter 13 code allows an individual to reallocate secured debts. It can over a period of time, lower the payments which he has to make. Finally the debtor will not have any connection or contact with the creditors while he or she has filed the chapter 13 bankruptcy code. Now let us see the eligibility criteria of filing the Chapter 13 bankruptcy code. Any person, either self employed or working in any organization can file chapter 13 and seek protection under it. The only condition on this is that his unsecured debts should be below $336,900 and secured part of the debts lower than $ 1,010,650. And no corporate or organization can seek help or file chapter 13. And the individual cannot file for chapter 13 or other codes if his bankruptcy petition was dismissed in the preceding 180 days before.

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If you have experienced a foreclosure, you know what it’s like to leave your home, pick up the pieces, and make a fresh start. After losing your home, you have probably resolved to work hard and earn enough income to get another mortgage after foreclosure. Good! You deserve another shot at the American Dream. But you may wonder about your credit score. You know that potential lenders will consider your credit rating and you are concerned that by going through foreclosure you have permanently damaged your chances. You wonder how long after foreclosure you can purchase a home. If you are thinking about buying a home after foreclosure, you first need to understand what your credit score is and how it may factor into a lender’s decision. Your credit history includes all of your credit activities including credit cards, store charge cards, your auto and home loan, and student loans. In order to assess your creditworthiness, most lenders use the credit score system designed by the Fair Isaac Corporation (FICO). It is a sophisticated credit-scoring formula that compiles your credit history and evaluates the risk that you may default on a loan. FICO scores range between 300 and 850. The better your credit history, the higher your score. A score below 620 is typically considered “sub-prime.” “Good” is 620 to 650, and above 720 is seen as “excellent.” According to FICO the median score is 723. A home loan default and foreclosure is a major credit event. Some experts believe that a foreclosure will result in an immediate 250-point drop in your FICO score, and that it will take at least 24 months of perfect credit before a lender will consider you for a reasonable loan rate. A short sale (where your lender agrees to a sale of your house at a loss) may be less damaging. One factor impacting your credit score after foreclosure is how high your credit score was before the foreclosure. Unfortunately, your credit score probably wasn’t that terrific because you were probably late with other payments as well.

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