What happens if we take a loan and the bank goes bankrupt?
In the event that a bank goes bankrupt, you will not be asked to repay the rest of the loan. You can find a new lender or shop around for a better deal. During a bankruptcy, Trustees may try to collect your debt, but you will not have to pay up the entire loan.
Non-bank lenders cannot ask you to pay up the rest of your loan if the bank goes bankrupt
If you're an applicant for a small business loan, non-bank lenders can offer an excellent alternative. Non-bank lenders cannot ask you to pay up the rest of your loan if the bank goes bankrupt. This is due to the fact that these lenders do not operate as full-fledged banks and do not offer deposit services. However, their loan products do not come with the same high-interest rates as bank loans.
Trustees may try to collect their debt during a bankruptcy
In the event that you take a loan from a bank that goes bankrupt, your creditors may try to collect this debt during bankruptcy. Trustees will contact you and try to get you to pay back the debt in full. If you agree to pay, you will need to provide the trustee with all supporting documents. If you refuse, the trustee can seek to collect your debt in some other way.
If you take a loan from a bank that goes bankrupt, you may be in danger of losing all your assets. In this case, the bank may file a Notice of No Distribution and a Notice of Claims Bar Date. This is because most Chapter 7 bankruptcy cases are "no-asset" cases. But if you have a home or other property that is exempt, you will not be able to be seized by a trustee.
If you have any questions, you can get a free consultation with Ascent Law LLC:
Ascent Law LLC:
8833 South Redwood RoadSuite C
West Jordan, UT 84088
(801) 676-5506
