Bankruptcy – Timeframe From Start to Finish
Chapter 7 bankruptcy is a process whereby a debtor eliminates the majority of unsecured debt by filing a petition and appearing at a meeting of creditors. The entire process takes approximately 120 days and could require as little as one court appearance. The typical time-frame is as follows:
1) Filing of the petition with the clerk of the U.S. bankruptcy clerk. A notice is sent to all creditors, the debtor, the debtor’s attorney and the panel trustee.
2) The 341 meeting of creditors is held approximately four to six weeks after the date of filing.
3) The debtor waits an additional 60 to 90 days until receiving a discharge order. The discharge may be delayed by the panel trustee.
If everything goes well, the debtor’s case will last approximately 120 days from start to finish. If a creditor objects, there may be a separate case within the bankruptcy case to determine the dischargeablility of the debt. That case is typically not covered in the attorney’s representation agreement. That is because the adversarial case is far more difficult than the total bankruptcy filing in a simple case.
Absent an adversarial complaint, the debtor is well on his way to a fresh start within four to five months at the latest. That means that the debtor can start saving money, can obtain auto financing and can start rebuilding. What may have seemed like an impossible option turns out to be a lifesaver for many individuals. Only an experienced bankruptcy attorney can advise you regarding your rights under the U.S. Bankruptcy Code.
Apartment Lenders and Multifamily Lenders
There are several different kinds of apartment lenders. Some of which are experiencing the most demand in the history of their business, others are completely out of the market. Knowing which lender to take your apartment loan request to, is critical to a successful closing.
The conduit or CMBS apartment lenders that dominated the market just one year ago are gone. These lenders are dependent on a healthy secondary market, which has all but crumbled. The Mortgage Bankers Association recently came out with a report stating that the “secondary market is broken.” And no one really knows if or when it will return. One of the main issues is the lack buyers of the mortgage backed securities that are offered on the secondary market. These institutions (the buyers) have been burned badly and will likely remember this for a long time.
Conventional Multifamily Lender
Conventional lenders for apartment buildings are experiencing some tough times as well, but there still are some banks and lenders that are healthy enough to do loans with decent terms. The key here is knowing which banks and lenders are still strong, and that are really closing loans. Terms, rates, fixed periods range widely from one source to the next, depending mostly on their balance sheet and real appetite for new loans.
Probably 50% of conventional apartment lenders are no longer looking at new loan requests. Of the other 50% many are offering such ridiculous terms, like max 40% financing, that you just want to ask “why bother”?
Government Back Apartment Lenders
If you were looking for a happy ending to this article, here it is. Apartment lenders that are set up with the government backed programs are viable, and still doing deals at the terms your use to. 80% to 85% financing on purchases and 75% -80% loan to value on refinance are still available. Debt coverage ratios are very aggressive at 1.17. 30 year fixed rates and even a 35 year fixed rate in the low 6%’s to upper 5% is still an option…
These programs have taken some criticism over the years due to length of time to close, and expense. The agencies have done a lot to improve their system though, and it is common to get multifamily loans closed in a more typical time frame of 60 days, though 120 days is still a reality with some programs (depending on which agency).
The expense is still a valid concern, for example on a HUD apartment loans the borrower can expect to pay Uncle Sam APR 3% of the loan amount out of the proceeds of the loan. However when compared to the borrowers other real options, which at the moment are very slim (to nonexistent), it doesn’t look that bad. Also, the long term fixed rates make it easier to swallow as the borrower will never have to face a balloon or having their rate adjust to such a high levels that it puts them underwater from a DCR perspective.
What Is Debt Consolidation?
Quite simply put debt consolidation is where you take out one big loan to repay all your smaller loans and credit/store card debts. Combining all your repayments into one consolidated repayment can quite often reduce your monthly expenditure quite considerably. This is the main reason why most people take out a debt consolidation loan, to reduce their outgoings and give them some extra cash to spend each month. However the most important aspect of debt consolidation is the fact that so long as you destroy your credit cards and do not use them again you also have a definite date when you will be debt free.
Most people do not realise that if they have a number of credit card balances of 5,000 or more, that they are paying the minimum amount to each month; it is going to take them a really long time to pay back the money and finally become free of debt. Also because your finances are stretched each month and you are unable to put any money by each month, if an emergency arises such as needing to make repairs to your car or home, the only payment option open to you is your credit card.
Is Debt Consolidation Right For Me?
If you have outstanding balances on several credit or store cards, and or several unsecured loans, and you are struggling to keep up with the monthly repayments, then debt consolidation could be your best option. To be eligible for a consolidation loan you must be in employment, earning enough money to to justify the loan, they will also require a good credit history and will need to see that you have never missed a payment.
How Much Should I Borrow?
Before deciding how much you should borrow you need to take a close look at your finances and work out exactly how much you owe. You also need to write down a list of your monthly outgoings so you know exactly how much you are spending each month, and determine if there is anything that you do not need to spend. If you have no savings to back you up, then it might be an idea to borrow a little bit extra to keep aside in your bank account in case of an emergency arising, this way you wont have to use your credit cards again.
When you have decided on how much you need to borrow, and what you can comfortably afford to repay each month you should apply for your loan. Look at the amount you can afford to repay on the loan and opt for the shortest term you can possibly afford; Then you should destroy every single credit card in your possession, to make certain that you do not use them again.
In Summary
Consolidating all you debt into one more easily manageable payment, can reduce stress and improve your financial situation. However it is important that anybody who goes through this process adopts a more organised approach to their finances, by working to a budget. Only by doing this will the full benefits of debt consolidation be enjoyed, not doing so can lead to financial ruin.