Loans And Credit After Bankruptcy

April 15, 2012 by  Filed under: Bankruptcy 

One of the most feared aspects of filing for bankruptcy is the future effect on getting credit or loans. While bankruptcy itself doesn’t damage one’s credit, there are still some challenges that must be faced when securing credit after bankruptcy. However, knowing what to expect and how to find the right type of credit can be the difference in success or failure.


The most obvious challenge associated with new credit after bankruptcy is credit damage. This damage is done long before you ever files for bankruptcy and is the result of missed payments. This means that before you even files bankruptcy, their prior debt accounts have been considered delinquent and resulted in an impaired credit standing. Bankruptcy provides a fresh start, in which a new credit history can be established. However, this takes both time and effort.

Rebuilding one’s credit takes planning and attention to detail. One mistake people often make is failing to monitor their credit report after bankruptcy. Not all creditors are quick about updating information or reporting the new account standings to credit bureaus. It is important that you take the time to ensure your credit report is accurate and even keep up with your documents from the filing. You never know when you may need to provide a future creditor with a letter indicating your accounts have been resolved in the future.

Finding The Right Credit

Most people are surprised to learn that they do qualify for numerous credit offers after a bankruptcy. It isn’t uncommon to begin receiving credit or loan offers right away, but not all of these offers are good ones. One this is true about quick and easy credit offers, they are often packed full of unfavorable terms. High interest rates, large annual fees and even hidden penalties are common among these types of offers. Even though you experienced a bankruptcy you deserve good lines of credit or loans. The trick is knowing how to find them.

First, shop around with multiple lenders. Ask lenders detailed questions about the credit or loan they are offering and find one that suits your budget. At this point in your financial life it is better to obtain an unsecured loan or line of credit with a smaller spending limit. Not only does a lower spending limit keep your purchasing habits in check, they also tend to have lower interest rates and more favorable terms. Also, do not allow them to conduct a full credit check, but give them the basics of your financial standing first in order to obtain an estimate of the offer you can receive. Remember that multiple checks to your credit can be damaging, which is why it is important to limit the number of official inquiries into your credit standing.

Christopher understands that financial hardships can affect honest, hard-working people. Growing up in a very blue collar family and rural area of Indiana, money didn’t always come easy for his parents. The struggles his family faced in his childhood made a significant impression on his business philosophy today. As a Fort Worth bankruptcy attorney his practice has given him the opportunity to directly impact the lives of many people.

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