How Credit Score Can Help Post Bankruptcy

Bankruptcy is a situation when the insolvent is not able to pay back the creditor and the reason is because he is left with no money or assets in terms of finances. Bankruptcy put in simple words is the lack of ability to pay the bills as and when they are due. The process of bankruptcy is monitored by the Act of bankruptcy. The progression is initiated by the filing of a petition in the court of bankruptcy by the debtor.

Is it possible to have credit card?

It is important to know that if there are any overdue bills related to the credit card, then it must be mentioned while filing insolvency. The credit card is also included as a liability. In case there are no over due bills, then the credit card company is not required to be informed. It is although possible that the bank may find out regarding your card through different sources and cancel it without delay. Although, several card companies permit the use of the same card even after filing bankruptcy, but you need to undergo a new agreement with the company. It would be advisable to go for this alternative as getting a new card is difficult for bankrupt individuals. Can a fresh credit record be achieved?

In today’s competitive world, credit facilities are available to bankrupt debtors also. But the cost of credit is higher. It means that the interest rate is higher and also the lending amount is very much limited and restricted. But it’s sure that even bankrupt debtors can avail loan. Will I be able to own a home?

Yes the bankruptcy filed debtor can absolutely own a house. After 15-30 months of discharge of bankruptcy the debtors can apply for a loan on the same note as if they have not filed bankruptcy. But the creditor will be more concerned on the terms of our payment. He will have a thorough analysis on the debtor’s stability of income. Since the debtor has overcome a financial trouble a detailed study of the current net worth of the borrower will be made by the lender. Will bankruptcy filing damage my credit record?

Actually it’s always better to file bankruptcy than to face the numerous financial crises. Hence it’s generally considered that bankruptcy is not harmful. Time and then it is always essential to analyze one’s own net worth after getting a fresh start from bankruptcy instead of availing loans. Filing Bankruptcy will not delete the list of old creditors in our credit history. So always ensure that the bankruptcy discharge is also noted in the credit report, so that the new creditors can understand that these old creditors do not have any claim on us.

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