One of the things people are curious to know is if they could get loans after they declare bankruptcy.
Known as Bankruptcy loan, financial institutions do extend loans to individuals who have filed for bankruptcy.
With that being said, you should also know that filing for bankruptcy means your credit history is hit badly.
A bankruptcy filing damages your credit rating adversely, and this adverse impact stays on their credit for 10 years from the time of filing.
Financial institutions do offer a bankruptcy loan to individuals but the offer is available with couple of caveats.
Bankruptcy does have the ability to bring your financial stability come crashing down.
A Bankruptcy loan offered by institutions allow you to get back on to your feet quickly.
Chapter 7 Bankruptcy Loan Quirk as it may sound; these loans are offered to you depending on the Chapter of bankruptcy you have filed for.
If you have filed for Chapter 7 bankruptcy, you would need to wait for at least 2 years from the date of filing to avail of any loan from financial institutions.
Basically, Chapter 7 is a liquidation act of bankruptcy, and with this event, all the assets of an individual stand liquidated.
Chapter 13 Bankruptcy Loans Alternatively, you could possibly avail of loans quicker if you have filed for Chapter 13 bankruptcy.
Remember, this chapter talks about repayment of creditors.
Financial institutions will be in a position to offer you a bankruptcy loan only if you have managed to pay off all your creditors.
Either ways, you would find yourselves in a "Catch-Tiger" situation.
You would need some money, this way or the other, to survive or pay back your creditors.
Remember, the first objective for you to file for bankruptcy was to get rid of the debts that had been mounting on you.
Don't do something that would get you back in the same vicious cycle again! And this means, you should stay away from lenders who provide loans for you to pay off your creditors.
Normally, these loans come with abnormally high interest rates and riders, which surely could get out of your reach at some point of time.
Avoid getting trapped into these loans.
For all you know, you would have managed to payoff the creditors this time around, but a second filing is almost around the corner.