What Filing Bankruptcy Does to Your Credit

Filing bankruptcy is not an easy decision to make. If you recently had to file you may not know yet how your life is going to change for the next 7 to 10 years. On the plus side of filing bankruptcy, you unloaded a lot of debt that you were unable to repay and can now afford to live and meet your monthly obligations like housing, food, and other essentials. On the downside, you now face many other challenges. Things, like purchasing a home, buying a new car or acquiring a line of credit may end up being impossible to get or end up costing much more. The good news is that if you do encounter a month where money is tight, there are other ways to get the funds you need to pay your bills even after filing bankruptcy.

Your Credit Score After You File for Bankruptcy

Filing bankruptcy can reduce the amount you owe or eliminates your financial obligation to creditors. However, as a result of your filing, banks now view you as a high risk. Because of this, getting an approval for a typical bank loan is much more difficult and in many cases almost impossible to acquire. Also, the lenders who are willing to provide you with a loan for a car or grant you an approval on a secured credit card will have much higher interest rates.

Applying for an Online Loan After a Bankruptcy

If you find that you are coming up a little short to meet your monthly expenses, there are other places to turn. Provided your bankruptcy case is closed, there are many companies like LadderCredit.com that can offer you a flexible line of credit that deposited directly into your bank account, giving you almost immediate access to the funds. Unlike a typical bank, these companies take into consideration more than just a credit score. So long as you have a steady job, have an active checking account, and are a U.S. citizen, you should be able to acquire a loan. Just make sure that you review the repayment schedule, are able to make your payments on time, and protect your payment information with a VPN when sending it online.

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Asking family for Help

While you may not want to disclose your current financial status to a family member, borrowing money from them versus taking out a private loan will eliminate additional interest fees. Most times if you are close with a parent or sibling and you disclose to them the hardship you are going through they will offer to lend you the money. If a family member does agree to loan you money you must treat it like any other loan and repay it based on the verbal agreement. If you said that you can make monthly payments for a set amount make sure to uphold your end of the agreement.

Other Ways to Bring in Additional Money

If even after filing bankruptcy you still find yourself strapped for cash often, now is a good time to make a list of all your bills and monthly expenses to see where your money is going. If you dine out once a week or stop and buy your coffee on the way into work, eliminate it until you get your finances in order. If you find that you simply don’t bring enough money in to pay all of your debt then you may want to consider cheaper housing and reducing things like your cable and cell bills. If doing all of those things still doesn’t relieve the stress, then you may want to take on a second job.

The decision to file bankruptcy is a difficult one to make. However, sometimes it’s unavoidable. If you recently filed and your case is closed you should start to rebuild your credit as soon as possible. Apply for a secured credit card and pay the balance in full each month. This way in a few years, even with a bankruptcy on your credit report you’ll be able to get a loan for a car or a home without having to pay a significantly higher interest rate.

About the author

Mark Holland

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