There are a few basic concepts one should know when looking into refinancing a mortgage after a bankruptcy. Most importantly, you need to know the two different types of personal bankruptcy that you can declare.

Chapter 7 Bankruptcy, often called “straight bankruptcy”, is an attempt for someone financially overextended to liquidate most of their assets to satisfy creditors, keeping only a few personal assets needed for the basic necessities of life such as an economical car, personal clothing, etc.

In Chapter 13 Bankruptcy, your assets are not liquidated. Instead, you come to an agreement with an appointed trustee where late charges and other penalties are eliminated and you start a payment plan to repay much of the debt owed. This process can take over a year or two, but will allow you to retain belongings (and property). Also, it is looked at more favorably by lenders because you are attempting to repay your debts, not just write them off. Lenders will look at both the date the bankruptcy was filed and when it was discharged.

A Chapter 13 Bankruptcy “buyout” is a refinance loan, taking out a new loan to cover the existing mortgage and some or all of the other debts. This is basically considered a “cash-out” refinance. Most Chapter 13 Bankruptcy refinance loans are limited to roughly 85% of the value of your home.

When refinancing out of a Chapter 13 Bankruptcy, or soon after a Chapter 7 or Chapter 13 Bankruptcy, you will almost certainly be working with a sub-prime or “non-prime” lender. These lenders specialize in helping borrowers with blemished credit histories. Often, borrowers refinancing near the time of a bankruptcy will seek the assistance of a mortgage broker, many of whom have experience with this type of loan. If possible, it is best to wait at least two years after the discharge of your bankrupty to refinance your mortgage. This will help you to receive a better interest rate. Start now to pay your bills on time and in full. This will help to repair your credit and give you even better chances of a lower rate.

When it comes down to bankruptcy, there is only one thing in mind; debt. Probably you do not have any ways to repay your debt, which is why you only see bankruptcy as the only last option you have. Perhaps you just do not have enough money to pay for it and you see your standard monthly income for the coming years can never help you out of those debts. If these are the cases you are in, then filing for bankruptcy is the best thing you can ever decide on doing. Bankruptcy not only can eliminate your debts but also give you a relief from all the stress of having to figure out on how to pay your debts.

The cost to file bankruptcy varies from different places and people. Factors such as lawyers, attorneys and the credit counseling agencies and their fees affect how much you can spend in filing bankruptcy. There are so many ways that you can cut cost to file bankruptcy, you just have to think smart.

First is learning something about what you are doing, to be effective and efficient. Try to grasp the basic understanding of bankruptcy, know its process and even try to master the system. This will greatly help you in limiting the cost and time in filing bankruptcy. The cost to file bankruptcy is also affected by which type of bankruptcy you choose to undertake. There are four types of bankruptcy but mainly there are only two most types people can choose from.

The first type of bankruptcy is the Chapter 7 Bankruptcy which is a straight or liquidation bankruptcy. Out of all the types of bankruptcy, this is the most difficult to file. The basic idea behind this type of bankruptcy is that all of the consumer’s debt will be discharge in exchange for all his properties to be liquidated. Other properties of the consumer can be kept.  This is called exempt properties. The liquidated properties are sold and the money generated from those properties will be distributed to the creditors. This cost to file bankruptcy of Chapter 7 is relatively cheaper than other type of bankruptcy.

The second type bankruptcy is Chapter 13, which is designed to provide a repayment plan or a reorganize plan to pay debts. Chapter 13 is more likely design for a person who has standard income with a sufficient disposable amount minus all the expenses that can cover debts for an agreed period of time. This type of bankruptcy is encourage by the new bankruptcy law, the requirements force a debtor to attend a credit counseling agencies which are the people who will try to provide you a repayment plan. This in turn will give the way for filing a Chapter 13 type of bankruptcy.

The cost of filing bankruptcy can be expensive or it can be affordable. It mainly depends on the debtors seeking for a cheaper way to file bankruptcy to help their situation. One thing I can recommend is for you to hire a bankruptcy petition preparer or a bankruptcy lawyer to help you prepare your papers. Then you can pay them their flat fee, after which you can do the rest of the way by yourself. With some knowledge on how to file bankruptcy, you can really go a long way. For more information on how to cut cost when filing bankruptcy, just go to there site.