Lets say I borrowed money from ABCXYZ corp. to fix up my house. Now the company is shutting down. What is going to happen to my loan, and do the same original terms and conditions apply if my loan is sold to someone else? Lets say I borrowed $30,000 on a 3% deferred intrest plan, that is payable upon an actionable event (the house is sold, refinanced, or payment is initiated via homeowner.)
2006-07-26 18:35:00 · 6 answers · asked by jwalcarter 2 in Politics & Government ➔ Law & Ethics
Yes, you still have to pay but your loan will probably be sold to another loan company as a way to collect the accounts receivables to pay for the original loan company’s debts.
Also might be prepared to refinance the loan thru another company as the courts might call all accounts receivable due in full as really they are not even obligated to find you another loan company in that process.
Probably even has a clause in your original loan contract saying that as most do. Will say any loan can be terminated with full amount due at any time without notice.
A good loan company will transfer the loan to another company in that case but some crummy companies will just send a bill saying full amount is due and payable now in which case you would be responsible for refinancing the loan thru another company.
In any case ask them what they are going to do so you do not get a bill saying pay now or they will foreclose on your house which would make it even harder to try to instanly find another loan company to keep them from seizing your entire property as a way to help them get rid of their own debts.
Lot of crooks in the loan industry now days and just the fact that yours is claiming bankruptsy is a good sign that there was something they were doing wrong to begin with if they could not remain solvent.
More than likely they were loaning money to not only you but just about anyone that walked in the door as a way for some loan officer to make themselves look good.
That pretty much destroys those loan companies fast when they not only loan to responsible people like yourself but also to joe crack addict that wants to set up a crack house also with advertizing expressing how they will loan with no money down and bad credit no problem.
What else do loan companies expect with ads such as that? Do they really think people with totally bad credit are going to pay back those loans? Nope, but they do expect the tax payers to bail them out everytime they do that I have noticed.
Tons of loan companies are really just scams to get a big cash flows cook the books then just claim bankrupsty because the new multimillion dollar house ten cars and giant boats they bought under a different name cost a little more than they thought.
Then when the crack addicts they loaned to never pay they claim bankruptsy knowing the U.S. tax payers are suckers anyway.
2006-07-26 19:46:01 · answer #1 · answered by R B 2 · 1⤊ 1⤋
Bankruptcy is very tricky. There are several different types, as in Chapter 7, or Chapter 13, of the bankruptcy code. The type will determine what happens to the creditors, and the lenders.
The lending company will file papers with the court and they will determine what the outcome is to be. Usually the court collects the debts, such outstanding loans, or loan contracts, and passes the money to the creditors. The contract would probably stay the same, depending on the terms of the contract. Loan contracts are always being bought and sold, but the only thing that changes is who you send your payments to.
2006-07-26 18:45:40 · answer #2 · answered by Yarnlady_needsyarn 7 · 0⤊ 0⤋
Well it's true that most small lenders sell thier loans right away. YOu would recieve a notice, dont stop making your mortgage payment while waiting for something to happen, it will affect your credit. If you dont get a notice about servicing transfer(who processes your payment) contact the company your currently sending your payments to and inquire.
2006-07-26 18:41:40 · answer #3 · answered by glowchild7 3 · 0⤊ 0⤋
Regardless of the type of bankruptcy filed by the company, the company's creditors uses the companies assets to determine the collectability of the the debt. Your loan is the company's receivable, which is their asset. So, yes, your payment is very much expected to retire their liability accounts.
2006-07-26 18:50:04 · answer #4 · answered by Nikki W 3 · 0⤊ 0⤋
It is unlikely your "lender" held the paper more than a few months before they sold it anyway, generally speaking. Sorry............
2006-07-26 18:38:49 · answer #5 · answered by Anonymous · 0⤊ 0⤋
Good question...I would also like to know...
2006-07-26 18:38:46 · answer #6 · answered by feizal 1 · 0⤊ 0⤋