When you feel like you are on the verge of losing everything, the last thing you want to do is think about how much worse it could get. Many people think that they will be unable to get any kind of credit after they file bankruptcy, so they continue to struggle and try to pay off debts they can’t possibly afford with the hope that something will change. In the meantime, the interest rates pile on, and the debt just seems to get bigger while the credit rating gets worse. If you have gotten to this point, it may be time to consider filing bankruptcy and come to an understanding of what that might mean for your future credit. Click here to read more about what happens after bankruptcy.
Filing Limits and Bankruptcy
Over the past decade, quite a few laws have changed. Some of these laws have to do with bankruptcy and how often it can be filed. This was a result of some individuals who would make a habit of gathering debt they knew they couldn’t afford. They would then file bankruptcy whenever they needed to get out from underneath the debt they had accrued. Today, in most cases an individual can file Chapter 7 once every eight years. As a business, you may be able to file more times than that depending on your situation. Chapter 13 doesn’t have limits like that, but it does force you to make payments so that you can catch up with your debt rather than having it discharged. Creditors know about these limits and have responded accordingly to those who file bankruptcy.
Immediate Credit Offers After You File Bankruptcy
While you may struggle to get a loan from a bank after your bankruptcy is discharged or completed, there isn’t likely to be a shortage of lenders from other financial companies. They may come in the form of credit cards, catalogs, or other credit lines. The key is to look at the interest rates. You will need to start a line of credit of some sort so that you can start building your credit back up, but you don’t want to pay more than you have to simply because you have filed bankruptcy. Some creditors may offer you one or more lines of credit, but their interest rates may also be extremely high.
Before Accepting Credit Offers
Before you accept offers to begin repairing your credit, try talking with your bank to see if they can help. You may not get an offer, but then again you might. It’s worth trying this route before you take on a high-interest loan with another creditor. If you do take on a high-interest line of credit, be sure to follow credit guidelines. Don’t use all of the credit you have available. Keep your balances low, and if possible, pay in full each month so you can avoid paying the high amounts of interest that will likely be attached to the account.
Although they can be expensive at first and may not always have the most ideal terms, these lines of credit are your chance for a fresh start. After all that you have to go through during the bankruptcy process, you don’t want to fall into the same traps again and end up in the same exact situation. Accept a line of credit, but use it wisely. If you manage your accounts responsibly, you’ll be able to qualify for the loan of your choice in the future.