Bankruptcy Loans - Still Possible With No Credit


Filing bankruptcy doesn't mean that you can never have credit again. As a matter of fact, the point of filing bankruptcy in the first place is to help people who have made disastrous financial decisions in the past, learn from their mistakes and move on.

Bankruptcy loans are a great way to help you re-establish your credit and buy important items such as a home.

There are two types of bankruptcy loans:

-Debt consolidation loan.

-Post-bankruptcy loan.

While the debt consolidation loan may help those who have filed Chapter 13 bankruptcy pay off their creditors and begin to re-establish their credit earlier than making monthly payments according to their bankruptcy schedule, it can be a recipe for disaster for those who have failed to learn how to budget their money properly and stick to a budget by piling on even more debt to their overburdened financial situation.

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The more common bankruptcy loan is the post-bankruptcy type of financing. This loan is designed to help those who've gone through the entire bankruptcy procedure, and proven that they have learned how to handle their finances, the opportunity to purchase their own home or automobile.

These loans are usually available to people who have declared bankruptcy only after their creditors have been paid in full.

When Chapter 7 bankruptcy has been filed, the debtor must wait at least two full years after their bankruptcy was filed to apply and qualify for a loan. In the case of a Chapter 13 bankruptcy, all creditors must be paid in full under the bankruptcy agreement in order to apply for a loan.

Just because you've paid back your creditors, and waited the allotted time to file for a loan doesn't guarantee that you'll receive it. Rebuilding your credit takes time, persistence and patience. Although these loans are a bit more forgiving of past mistakes, the will not tolerate a bad credit rating now.

The best way to get a loan after bankruptcy is to prove that you are no longer a high-risk borrower. How? The first step is to reestablish your credit by paying all of your bills on time and properly maintaining at least one credit card, which can be either a major credit card or a store card. Some people have even purchased small items using easier to obtain store credit in order to rebuild their credit history.

Once you have done this on a regular basis, you can request reference letters from your credit company and the companies that you pay for utilities to prove to other lenders that you are financially responsible.

It isn't always easy to rebuild a bad credit history. Nobody owes you the chance to prove yourself worthy of having credit once again. You need to find ways to do that on your own. But, wit careful planning, and a solid sense of budgeting, it is possible to change a bad credit past into a good one.


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