Qualifying for Personal Loans after Bankruptcy Discharge

It is not easy to pick up all the pieces after a bankruptcy as well as qualifying for a personal loan, but despite the fact that it may not be easy, it is definitely not out of the question. Yes, it is possible to apply and secure a personal loan from a bank even after filing for bankruptcy.

Rebuild Your Credit by Securing a Personal Loan

Here are the steps that would lead you towards the right direction:

1. Make sure that your bankruptcy has been discharged, since lending companies will never about lend money to someone who is still in bankruptcy. Provide your lender with the appropriate paperwork to prove it that the bankruptcy has been discharged when applying for your personal loan.

2. Create a budget to know the exact amount of money that you can afford. It is imperative for you to have an idea on how much you can borrow and the amount that it will cost you to pay monthly. Just to be safe, it is better to underestimate the amount rather than overestimate and put yourself back into the same position.

3. Get the advice of a loan officer before filing for a personal loan. Getting the needed underwriting information from a loan officer will help you better understand what information the banks are looking for when they offer personal loans to individuals whose credit report shows a bankruptcy.

4. Consistently pay your bills on time and stay away from payday loan lenders. Since your bankruptcy is already discharged, you should prove that you can pay your bills on time so that your credit gets stronger. Having proof of consistent payment will favor you when it comes to qualifying for a personal loan right after bankruptcy.

5. Give yourself ample time to recover from the bankruptcy. If the time between the bankruptcy and your application for a personal loan is longer, your chances of getting approved is much better. The additional time will also give you the chance to prove that you have learned from all of your mistakes, making you a good candidate for a personal loan.

6. Make sure that you review your credit report, so that you will know what’s on it before you apply for a personal loan. Keep in mind that since the bankruptcy discharged all the debts, your credit report should reflect the same information that you have on your bankruptcy papers. It is unavoidable for mistakes to happen, so make sure that you correct everything before you submit your loan application.

As you can see, it is still possible for you to rebuild your credit and get a loan after bankruptcy. There are actually many options for you, just make sure that you follow all the tips provided above so that you will be guided accordingly. You should also remember that obtaining a personal loan after bankruptcy will not be cheap, so you should expect to pay a higher interest rate.

Bankruptcy Loans: Personal And Business Loans For Those Who Have Filed Bankruptcy

Most people, if not all, are afraid to declare and file bankruptcy because of their belief that they could never be qualified for post-bankruptcy loans or that they would have to what a decade to be able to qualify or avail of such. Those who had filed for bankruptcy who availed of bankruptcy loans after being discharge testify that neither of the foregoing cases were true. At most cases, debtors, or those who had filed bankruptcy, receive most number of credit card offerings than their pre-bankruptcy state and they are deemed as  far safer credit risk by most credit-issuing institutions.

The US Bankruptcy Code provides not only he procedure on how bankruptcy cases are handled but also the prescribed period to which a debtor could avail of bankruptcy loans. A person who had filed for bankruptcy under the Chapter 7 must wait for 2 years proceeding the date of the bankruptcy filing period and immediately after the case had been dismissed. Those debtors filing for bankruptcy under the Chapter 13, on the other hand, must be able to pay all his or her obligations from all listed creditors after being permitted to avail of another credit.

Though the period to which a debtor may avail of credit after filing bankruptcy applies to all, banks and lending institutions are deemed more flexible and accommodating these days. Personal bankruptcy due to medical expenses has a higher chance of being awarded of bankruptcy loans than of a case due to cases of inability of handling resources such as a result of shopping expenses. A person’s present circumstances which show improvement in one’s financial capability are deemed the best way to show one’s credit worthiness for a new credit.

Bankruptcy loans availed, on the other hand, by businesses undergo more difficult evaluation than debtors under personal bankruptcy cases. The type of industry a business is categorized in up to how long the business had been operational all adds up and affect the outcome of a lending institution’s decision whether or not a fresh capital in the form of a bankruptcy loan will be provided for. Businesses that are in the auto-industry and those that are in post-start-up period would experience difficulty in being approved for bankruptcy loans than those that are engaged in pre-owned retailing and relatively mature businesses. However, most evaluation of credit worthiness for businesses vary and, thus, depends on the lending institutions’ evaluation criteria. Businesses are advised to draft business loans as if they are applying for a capital, and not just a fresh infusion of it. The business plans need to provide lending institutions the primary reason why the business had reached bankruptcy and the measures to be taken by the business owner to prevent any unforeseen event that may lead to another bankruptcy. The business owner should be able to sell the idea of measures to prevent bankruptcy as if he is trying to sell a business idea. Answers to questions such as the capacity of the business to ensure a steady stream of revenue and a strong customer base supported by ample hard business data from demographics to past business experience must be provided in order to justify why business deserves a bankruptcy loan.  Businesses prior to filing bankruptcy loans application are advised to undergo trainings and information such as those provided by local Small Business Development Center and the American Bankruptcy Institute in order to equip them with rules and regulations and other pertinent information affecting their cases.