On behalf of Trenton Grand of Grand Law Firm posted in Bankruptcy on Monday, February 4, 2019.
Louisiana residents and others who have gone through a bankruptcy may be able to refinance a debt prior to the case being discharged. It is important to note that not all creditors will work with individuals who are in the middle of a bankruptcy proceeding. Once a creditor has been found and loan terms proposed, an individual will then need to ask the court for permission for the refinance to take place.
The first step in that process is to meet with the bankruptcy trustee. He or she will review the proposed transaction to determine if it is reasonable. A debtor will also need to show that he or she is able to make the new proposed payment on time. There will likely be a fee to file a motion, and that fee will be added to other balances being repaid during a bankruptcy case.
Assuming that the trustee approves the motion to refinance a loan, it will go to a bankruptcy judge. If the judge approves the refinance, it will be made a part of the repayment plan. Debtors can find lenders willing to work with them by asking local banks if they work with those who have a bankruptcy on their credit report. Even if a specific bank doesn't do so, a representative may be able to point a debtor toward a lender that will.
Those who are struggling to pay bills or meet their financial goals might benefit by declaring bankruptcy. This may make it possible to put an end to creditor contact or collection activity such as a foreclosure, lawsuit or repossession. Debtors may be allowed to retain their homes, cars or other valuable property while the bankruptcy case remains open. An attorney may help represent a person going through this process.