Can You Refinance Your Mortgage After Bankruptcy?

Claiming bankruptcy can be one of the most embarrassing decisions anyone ever has to make. This is due to the public claim announcing that a certain individual has become so far over their assets with debts. When an individual or household decides to file for bankruptcy the state takes nearly all of the remaining assets to sell off the debt owed. Often times this leaves the individuals with only the clothing on their back and a few prized (worthless) possessions. First of all you should keep in mind that filing for bankruptcy is a legal process. For this reason, and for your own financial wellbeing, each decision that you make about claiming bankruptcy should be a well thought out and informed choice. If you do decide to file for bankruptcy you need to be ready to choose if you should file for Chapter 7 or Chapter 13. Chapter 7 of the Bankruptcy Code states that all non-exempt property of the debtor is sold and the proceeds of the same are distributed to the creditors. While Chapter 13 gives the debtor a ceiling of 5 years, within which the creditors must be paid back. Once you have chosen this financial path it can sometimes be tough to climb out and get back onto your feet. If you are not able to bounce back you may be trying to pay off debts for the rest of your life, causing much more money to be paid. One way that refinancing before you claim bankruptcy can act in a good was is you will have the ability to pull the equity out on the home and use it towards paying off some of your debts. The life of your mortgage may grow, but by doing this you may be able to buy your self some time. Depending on how much money you are able to get and how far in debt you are with your assets, you would be able to use some of that extra money toward lowing your debt. For most people that have to claim bankruptcy though this is not even an option. These people have dug themselves into such a financial ditch that it makes it hard for them to climb back out. They have so much debt that by refinancing they wouldn't even be able to chip away at it. So before you decide on which might be the best for you, you should take a long look and do plenty of research because a choice like this could have a major impact on the rest of your life. Refinancing your mortgage is not an option if you claim bankruptcy because the state will take back your property and sells it to pay off your debts you owe. Refinancing a house can only been done before bankruptcy. Once you have chosen this path there is no turning back, what is done is done. To be able to refinance you have to have a mortgage and when you claim bankruptcy the back will sell off what ever they can to settle the debts, this means your house too. Once the house is gone there is nothing for you to use as leverage towards refinancing. Refinancing is one of those things that is not going to save the consumer money in the future, however it will save money for the individual now.