Many people worry that filing for bankruptcy will prevent them from getting a loan or credit card, even if the loan has an interest rate higher than the credit card rate.
In fact, filing for bankruptcy does not affect someone’s ability to get a loan or make payments on a bad credit card debt. The definition of “bad credit” is broad enough that any debt burden – regardless of the percentage of the loan balance – can be considered “bad” for purposes of setting up a bankruptcy proceeding. Bad credit loans online instant approval is significant, and you should know all that is needed to get an instant loan with bad credit.
Another misconception is that a debtor can “hide” money in a trust account so it will not be used to pay off creditors during bankruptcy proceedings. Even if there is money in a trust account, federal laws allow money in other accounts to be drawn down and paid to creditors during bankruptcy. Bad credit loans and credit cards are treated like money owed to creditors in a bankruptcy proceeding.
Rules governing the treatment of money in trust accounts during bankruptcy vary by state law; some states will allow money in a trust account to be used for debts, others will not. A debtor filing for bankruptcy should consult with their attorney to find out the relevant laws in her or his state and whether such laws provide for the use of the money in a trust account during the duration of bankruptcy proceedings.