Making the important decision to declare bankruptcy is not as painful a decision as one might think. If you want to obtain a loan, or any other credit, after your bankruptcy, the most important thing to do is to restore your credit rating.
However, is it possible to obtain a loan after declaring bankruptcy? Below you will find all the necessary information regarding the effects of such a decision. We rkillen associates helps people to find their debt solution through consumer proposals. We have assisted thousands of people like you in all over the Canada.
Is it Possible to get a Loan after Bankruptcy
Short Answer: yes, it is possible.
The bankruptcy process allows you to free yourself from your debts and start afresh. Although a bankruptcy affects your credit rating, this credit rating is not necessarily what you should focus on. As is the case with most bankruptcies, this process is precisely what will help you rebuild your rating. However, it will be of utmost importance that you make serious efforts to build trust between you and your lenders.
It is important to note that although you have the right to obtain credit after filing for bankruptcy, you are required to disclose your bankruptcy when applying for credit. In addition, we strongly suggest that you use this credit very carefully to avoid finding yourself insolvent again.
Secure Credit Card
Although you have to give up your credit cards when filing for bankruptcy, that doesn’t mean you can’t get one anymore. Once you have been freed from all your debts, the best way to start building your credit would be to use a secured credit card. With a secured credit card, you will need to provide a security deposit (usually $500) equal to the amount of the credit card limit.
After one year of use, you can either close the account with your deposit refunded to you, or get your deposit back with the option to increase your card limit. If you make sure you meet all of your payments, you can rest assured that you will be well on your way to increasing your credit rating.
Private Loans
After a bankruptcy discharge, there is no waiting time for obtaining other types of loans. You can most certainly apply for private loans such as personal loans or car loans. However, with these types of loans, lenders will likely ask for your current financial information and financial history. For this reason, it would be important to attempt to rebuild your credit before applying for these types of loans. This way your application will be more likely to be accepted.
That being said, you need to remain vigilant when it comes to applying for personal loans. If it sounds too good to be true, then it probably is. Be sure to read the terms carefully before making a decision.
Getting a Mortgage after Bankruptcy
It is certainly possible for you to acquire a house after a bankruptcy. Declaring bankruptcy doesn’t mean you have to give up on your dream of owning a home one option you can consider is to enter into an agreement with the seller in which you could rent the house with the option of buying. This would allow you to find a lender while rebuilding your credit during the rental period. You can also choose to be patient and wait for the bankruptcy to clear from your record. This would save you money during this period.
But that doesn’t mean you can’t get a mortgage. However, the longer it has been since your bankruptcy and the better your current credit rating, the more likely you are to be approved for a mortgage. Your chance of being approved also depends on the type of mortgage you apply for.
