You’ve filed for bankruptcy. The debts are covered and you’re set with your monthly payment. You’re finally on a much less stressful path to re-establishing your financial security. Now what?
After bankruptcy, the first thing you want to look at is rebuilding your credit – this is often the main reason people look for a loan after bankruptcy. You don’t have to wait until you are discharged, you can start rebuilding right away.
Great, we say to rebuild right away, but what about the current state of your credit – won’t that hinder your ability to obtain the loan after bankruptcy necessary for rebuilding? It can be tough, yes, because many companies shy away from helping previous bankrupts – never mind undischarged bankrupts – but not all.
If you need a loan after bankruptcy, there are solutions.
Why a loan? A loan after bankruptcy is a great way to show positive borrowing behaviour. Since it is not revolving, your limit is set and you begin repaying the loan right away. There is less risk because the money is not made available to you again, as with a credit card, so you’re less likely to continue overspending. The terms are set, and that means you have an end date.
First look at what you can pledge as security. For example, a paid-off car is a great asset that you can use to borrow against after bankruptcy. Using your car as collateral means the lender is taking on less risk (the car can be used if payments are not made), and you get a chance to start rebuilding.
Then look at what is positive in your financial profile – income, income sources and stability. Sell yourself to prospective lenders. Yes, you may have some negative credit behaviour, but if you can temper this with positive behaviour you can show that you are concerned and want to rebuild.
Also, make sure to choose a lender who reports to your credit and provides reasonable and affordable repayment terms. Never, ever, go to a payday lender for a loan. Not only will this not help with your plan to rebuild, as payday loans do not report to your credit report, they also come with sky high fees that can become problematic very quickly. If you’ve just cleared everything up, don’t start digging yourself into a hole once more.
At Prudent Financial, we can appreciate the difficulties that accompany filing for bankruptcy.
If you’re looking to obtain a loan to rebuild, call us today: 1.888.852.7647.
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