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How To Get A Loan Post Bankruptcy

Aug 17, 2007
If you are or have been bankrupt you can still get a loan. Some lenders and other finance professionals, or your neighbours, friends, family and well-meaning but misinformed people would have you think that the minute you file that bankruptcy youll never have a car or a home in your name again.

That is just not the case. There are firms that actually specialize in giving loans to the bankrupt and those with other bad credit issues.

It may be that those who are bankrupt will have to wait until the bankruptcy case is dismissed or the creditors are paid to get a loan for a vehicle or residential property, but thats not always the case. A lot depends on what type of bankruptcy you filed.

If when you are bankrupt you filed a Chapter 7 bankruptcy before you can get a loan you will have to wait two years. With a Chapter 13 bankruptcy the criteria, generally, for acceptance of a loan when having been bankrupt is that the creditors have been paid.

Since the type of bankruptcy determines how quickly and under what circumstances you can get a loan after you are bankrupt its important to know the various types of bankruptcy. Here are the basics.

Chapter 7 bankruptcy is filed as a protection of your personal belongings and lets you start on the road to financial recovery while paying your creditors back systematically. If you have a loan or two or three when you go bankrupt you can still pay them back, on a schedule that you can afford. You dont have to default.

To apply for a Chapter 7 bankruptcy youll need to gather your list of the people and firms to whom you owe money - your creditors. Youll need to present to the bankruptcy attorney a list of your assets and liabilities, and the property that will be - you hope - exempt from collection.

Youll need to prove your income and your expenses, and a statement of what you intend to do about the debts that are secured. Your property, including any that is part of a secured loan when you go bankrupt, will be turned over to a trustee.

You, or your attorney, meet with the creditors, your list of exempt items is discussed and you tell the others how you will pay them back. They have 30 days to disagree. The creditors then have 90 days to talk with the court about you and your bills.

The reasons that the criteria for getting a loan when youve been bankrupt differs between a Chapter 7 and Chapter 13 is that in a Chapter 13 you keep your vehicle, your home and your other possessions.

It is possible that a potential lender, when considering you for a loan, could look askance at this type of bankrupt situation. You, unlike a Chapter 7 bankruptcy, chose not to give up your property to pay off your debts.

If the post bankrupt loan youre seeking is for a home or vehicle it could be that the new potential lender will recall that in the last bankruptcy the lender who had your home as collateral didnt get it back when you failed to pay.
About the Author
James Copper is a No Credit Check Loans Broker for Any Loans - http://www.any-loans.co.uk/no-credit-check-loans.shtml
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