Re-building trustworthiness is perhaps the hardest step for an individual who already has a bankruptcy history. First of all, you really need to keep up with all the bill payments, even if this means making little sacrifices. You could save up some money by eating less out, and buying instead fresh food from groceries. Thus, you will have enough money left until the end of the month to pay those bills on time.
You can also start with the use of a credit card, which comes on the best terms possible, with the lowest APR you can find, but you must keep up with the repayments. And step by step you will be able to rebuild your financial trustworthiness, and there will be enough proof you can stand in the front of the future lender with.
If you feel you cannot do this on your own, turn to professional help. There is no shame in that whatsoever, especially if Chapter 7 and Chapter 13 are cleared, this meaning all your past creditors recovered their losses. On the contrary, you will be regarded as an ambitious individual, trying to recover from an ugly financial past, struggling towards the better.
Even though lenders who will agree to a loan after bankruptcy are hard to be found, but they do exist. You may not receive a loan on the same terms as someone who has an excellent credit record, but be glad you are still eligible, even if you will be paying a higher interest rate.
Entering a credit builder program, will definitely help you obtain much quicker that loan you dream of in order to purchase yourself the home or the car that you need. Under a credit score of 500, you are not eligible to receive any sort of loan, so even if it takes some time until you gather those points it is worth the hassle. Other lenders do not approve of bankruptcy loans, only if there is still equity left in your home. It is unlikely to have a huge amount of equity left in your home given the fact you have filed for bankruptcy, however it is not impossible. The equity in your home you calculate as follows:
- First you need your home to be evaluated. Say it is appraised at £175,000
- Then you need to make your own calculations: say you still owe towards mortgage £100,000 -> this makes your equity equal to £75,000. Be careful however, any other debts (secured mostly) will be reduced from it. So, given the same values, but if you have also taken out a home equity loan equal to 50% of your equity’s value, then you only have £32,500 equity left. You need to make calculations having in mind all of the possible outstanding debts.
Without a well grounded underlying proof it is unlikely that you will get a loan on fair terms from lenders. As specified, you either need to show recommendations from companies that you are paying your bills on time, thus you are a trustworthy client by now, or if you are still a homeowner, there must be some equity left in order to show you still owe parts of the property. Further, the bankruptcy loan itself is building you up a very good credit record, given the fact you keep up with the repayments. Even if the first loan after bankruptcy is on not so good terms, if you keep repayments, and show good behavior, this loan will open the path towards possible loans on much better terms for you.
Having the correct
bankruptcy information when dealing with debt, and financial problems, is pertinent. Bankruptcyhome can help you find out if bankruptcy is right for you.
