How to Get a Loan After Consumer Bankruptcy

Many people who are considering the possibility of filing for consumer bankruptcy, either as a Chapter 7 bankruptcy or Chapter 13 bankruptcy case, may be hesitant due to myths they have heard about the effects of bankruptcy. Numerous debtors are under the misconception that filing for bankruptcy means it will be impossible to get a loan or to rebuild your credit for many years following a bankruptcy discharge. In fact, it may be easier than you think to start the process of rebuilding your credit and obtaining certain types of loans relatively soon after a bankruptcy discharge. How can you get a loan or a line of credit after you receive a bankruptcy discharge? Our Oak Park bankruptcy lawyers have some information that can help you.

Get the Facts About How Long Bankruptcy Will Impact Your Credit

After a bankruptcy discharge, it is important to understand how long the bankruptcy will remain on your credit report and, ultimately, how long it will impact your ability to obtain loans. The length of time that the bankruptcy remains on your credit report and your ability to get a loan are not the same thing. You can be eligible for various forms of credit after a bankruptcy discharge, and your creditworthiness can increase as you continue to rebuild your credit, even when the bankruptcy discharge is still visible to lenders.

In general, you should know that a Chapter 7 bankruptcy will remain on your credit report for up to 10 years from the date you filed for bankruptcy, while a Chapter 13 bankruptcy will remain on your credit for seven years from the date of your filing. Yet those time frames will not dictate your ability to get a loan or a credit card if you begin rebuilding your credit.

Apply for a Small Secured Loan or Secured Credit Card

In order to begin rebuilding your credit after a Chapter 7 or Chapter 13 bankruptcy, you can begin by applying for a small secured loan or secured credit card. These are typically the easiest types of credit to get immediately after a bankruptcy discharge, according to an article from ValuePenguin. Over time, as you make regular payments on a secured loan or secured credit card—typically just one year or two years—your credit will improve, and you may be eligible to get an unsecured loan or an unsecured credit card.

Consider a Cosigner

If you want to move onto an unsecured loan or unsecured credit card more quickly, you may be able to begin rebuilding your credit with one of these options if you have a willing cosigner. It is important to know that a cosigner will be responsible for any debts that go unpaid, so it is important to be able to provide a potential cosigner with a guarantee that you will make regular payments. You should also make sure that the type of loan or credit card you are seeking will allow for a cosigner since some lenders do not permit cosigners.

Contact a Bankruptcy Lawyer in Oak Park

Do you have questions about qualifying for a loan or a credit card after bankruptcy? Our Oak Park bankruptcy attorneys can assist you. Contact the Emerson Law Firm today for more information.


See Related Blog Posts:

Should I Reaffirm Secured Debt in a Chapter 7 Bankruptcy Case?

I Want to File for Consumer Bankruptcy: Now What?

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