Surprising Facts About Your Credit After Bankruptcy
Bankruptcy and Your Credit Worthiness
After filing for bankruptcy, you may think it is the end of the world when it comes to your finances. After all, you might think, what lending institution could possibly trust you with a loan after you have filed for bankruptcy? How are you ever going to get a house, a car loan or even a credit card now that you have filed for bankruptcy?
While filing for bankruptcy certainly is not an easy decision to make and definitely does not look good on a credit record, you may be surprised to learn that filing for bankruptcy is not necessarily as bad as you thought.
Bankruptcy and Credit Books
Getting a Credit Card After Bankruptcy
After filing for bankruptcy, you may be shocked by the number of invitations you receive from credit card companies to apply for their cards. The reality is that, while there are certain credit cards you won't be able to get after filing for bankruptcy, there are just as many cards that cater specifically to those that are having financial troubles.
While some of these credit cards may have high interest rates or fees, paying these fees is worthwhile because using a credit card and paying it off every month is one of the easiest and quickest ways for you to rebuild your credit. In addition, since the bankruptcy helped you finally get out from the debt that was suffocating you, you should be able to create a budget that will allow you to use your new credit card wisely.
What happens to your credit score when filing bankruptcy
Keeping Credit Through Bankruptcy
If you already had some credit cards before filing for bankruptcy, it is also possible to hang onto the once you have. If you have a balance on a credit card, you have to list it when filing for bankruptcy. If you do not have a balance on the card, on the other hand, you do not necessarily have to list it. Furthermore, most credit card companies will allow you to keep their cards even after filing for bankruptcy. You may have to enter into a new agreement with the company, but going this route will allow you to maintain the history you have created with that particular credit card company. You should, of course, ask your Minnesota bankruptcy lawyer for help determining which cards, if any, you should attempt to keep.
Your Credit Report After Bankruptcy
Buying a House After Bankruptcy
It is even possible to purchase a home shortly after filing for bankruptcy. Many people think they will have to wait several years before they can finally make their dream of home ownership a reality. In reality, studies have shown that people who file for bankruptcy can often get a home loan within two years after filing and can even qualify for the same type of loan as those that have not filed for bankruptcy.
At this point, your income stability, the amount of your income and your ability to pay the monthly payments will be more important than your troubled financial history - assuming you have handled your finances responsibly since filing for the bankruptcy.
In the end, filing for bankruptcy usually is no worse than the destruction you cause when you are unable to pay your bills, as repeated failure to pay on time and carrying an overwhelming amount of debt will have a significant negative impact on your credit score. Therefore, if you are eligible to file bankruptcy in Minnesota, it is generally the better choice than trying to struggle through.