Will Bankruptcy Completely Kill Your Chances Of Getting A Loan?
June 7, 2008 – 3:51 amFiling bankruptcy does not end the possibility of obtaining a personal loan. In fact, a person who files bankruptcy can obtain a bad credit personal loan in as little as 30 days after the discharge of the bankruptcy. And since they cannot file for another bankruptcy for seven years, this provides insurance for companies that are willing to take a chance on someone with bad credit knowing that they have legal recourse to recoup the amount of the loan.
Although most traditional lenders simply will not grant bad credit personal loans after bankruptcy there are numerous lenders that fight over the market. Even with the counseling requirements of bankruptcy on financial management and responsibility, there is no law that requires those declaring bankruptcy to follow any suggestions made during the counseling.
Following the discharge of the bankruptcy, individuals are free to seek bad credit personal loans after bankruptcy whenever they choose.
Although bankruptcy records are open the public, and their availability is often seen as an embarrassing punishment for ignoring past responsibility, the availability of bad credit personal loans after bankruptcy has many taking that route to get out from under a heavy debt load. Even with the new laws there are those who continue to pile on debt and file for bankruptcy every seven years or as soon as the law permits.
Multiple Bankruptcies Don’t Matter
Anyone can apply for a bad credit loan no matter how many times in the past they have filed for bankruptcy. There are stipulations within the laws on who can offer bad credit personal loans after bankruptcy and the interest rates that can be charged, but there are no laws that govern who can obtain these types of loans. Many who file bankruptcy are willing to pay the higher interest rates of these loans in order to find financial help.
Most lenders who offer these bad credit loans don’t even require collateral for these risky loans. The reason being is that the recourse available if the loan is defaulted upon is wage garnishment of the person who took out the loan. When a person defaults on a loan a court typically orders repayment of the loan and any costs associated with collecting the loan. This makes the bad credit personal loan business very profitable for the lenders who offer these types of loans.
Many times the cost of collection is equal to the amount of the initial loan and then you tack on court costs, attorney fees and collection agency fees and this is a very costly endeavor for the delinquent creditor.
Tags: Bankruptcy
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