How You Can Get The Money You Need After Bankruptcy
Kate Ross
April 15, 2009
Bankruptcy can leave an irreversible mark upon your credit history and credit file that can be hard to overcome for the next ten years. Many creditors look at your bankruptcy and subsequent discharge of debts as your willingness to turn your back on mountains of debt and default on creditors who loaned you money or extended credit to you in good faith. You may be looked at as unworthy for the credit that you need, or as a huge risk that should be avoided when it comes to borrowing money or being granted credit.
Your New Borrowing Image
There are lenders, however, that look upon your new credit status in a different light. You can now be viewed, literally, as a potential borrower who owes nothing to anyone - because you suddenly have no outstanding debt. You also pose less risk than a typical bad credit borrower when it comes to repaying your potential new lender because these lenders know bankruptcy law - and thus they know that you are not entitled to file bankruptcy for a period of years, which means that you will have little other choice but to repay them when they loan money to you.
If you have a good job that you have worked at for several years, this further improves your image in the eyes of potential lenders. They know you will not risk defaulting on your new loan - which might result in your creditor obtaining a default judgment against you and possibly garnishing your wages. Thus, in a sense, you now have better standing amongst certain lenders than you did just a few short months ago before you filed your bankruptcy petition.
Rebuilding Your Credit One Step At A Time
Once your bankruptcy has been discharged, begin to slowly rebuild your credit by establishing two secured credit cards. A secured credit card will have a credit line equal to a deposit that you make to the credit card issuer, which means that if you want a fairly large credit line, you will have to make a large deposit. Two secured cards with a $500 limit are perfect to begin with. Use these cards wisely and always run a balance of thirty percent on each ($150). Pay everything over this amount off in timely monthly payments.
At the same time, take out a small personal loan of less than $5,000. Plan to pay off this loan within two years. You may be asked to provide security to secure a personal loan at this stage in your rebuilding efforts, and you can do so in the form of collateral, such as your home or automobile. Again, timely payments are essential to adding valuable points to your score.
Save Money While Rebuilding Your Credit
Within just twelve months, by following this method, you will be working your way up on the FICO scale as well as be able to qualify for additional loans in larger amounts. A great place to receive post-bankruptcy loans is online. There are many online lenders who specialize in servicing borrowers whose histories include bankruptcies, which translates to lower interest rates than what you will find on similar loan products at your local bank.
Your New Borrowing Image
There are lenders, however, that look upon your new credit status in a different light. You can now be viewed, literally, as a potential borrower who owes nothing to anyone - because you suddenly have no outstanding debt. You also pose less risk than a typical bad credit borrower when it comes to repaying your potential new lender because these lenders know bankruptcy law - and thus they know that you are not entitled to file bankruptcy for a period of years, which means that you will have little other choice but to repay them when they loan money to you.
If you have a good job that you have worked at for several years, this further improves your image in the eyes of potential lenders. They know you will not risk defaulting on your new loan - which might result in your creditor obtaining a default judgment against you and possibly garnishing your wages. Thus, in a sense, you now have better standing amongst certain lenders than you did just a few short months ago before you filed your bankruptcy petition.
Rebuilding Your Credit One Step At A Time
Once your bankruptcy has been discharged, begin to slowly rebuild your credit by establishing two secured credit cards. A secured credit card will have a credit line equal to a deposit that you make to the credit card issuer, which means that if you want a fairly large credit line, you will have to make a large deposit. Two secured cards with a $500 limit are perfect to begin with. Use these cards wisely and always run a balance of thirty percent on each ($150). Pay everything over this amount off in timely monthly payments.
At the same time, take out a small personal loan of less than $5,000. Plan to pay off this loan within two years. You may be asked to provide security to secure a personal loan at this stage in your rebuilding efforts, and you can do so in the form of collateral, such as your home or automobile. Again, timely payments are essential to adding valuable points to your score.
Save Money While Rebuilding Your Credit
Within just twelve months, by following this method, you will be working your way up on the FICO scale as well as be able to qualify for additional loans in larger amounts. A great place to receive post-bankruptcy loans is online. There are many online lenders who specialize in servicing borrowers whose histories include bankruptcies, which translates to lower interest rates than what you will find on similar loan products at your local bank.
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