Bankruptcy is a vital tool for struggling borrowers, providing debt relief and allowing you to start rebuilding your life. However, filing for bankruptcy does have some negative consequences, especially when it comes to your eligibility for credit in the future. Fortunately, with some financial discipline and the guidance of an experienced debt relief lawyer, it is possible to qualify for a loan after filing for bankruptcy.

How Bankruptcy Affects Your Credit Score

Once your bankruptcy is discharged, your credit score will likely drop by several hundred points, putting you below the minimum threshold for most lenders. If you filed for chapter 7 bankruptcy, the notation will stay on your credit report for 10 years. Lenders will be able to see a chapter 13 bankruptcy for seven years, which could impact their decisions.

Types of Loans You May Qualify For

While buying a home or taking out a large personal loan might be difficult immediately after bankruptcy, some lending products may still be within reach. Store charge accounts often have looser requirements than banks, and secured credit cards are more accommodating for those with less than perfect ratings. Many lenders also offer special credit-builder loans designed for those who have recently pursued debt relief.

How to Rebuild Your Credit

After filing for bankruptcy, many people are understandably hesitant to take on new debt. However, showing creditors that you can use debt responsibly is essential for bringing up your score. Start by paying any bills you’re still responsible for on time every month and using new credit accounts carefully. Never charge more than you can afford to pay off every month, and avoid applying for too many new accounts at once.

If you’re struggling with financial obligations you can’t meet, Donald L. Spafford, Jr., Attorney at Law, will help take the weight off your shoulders. For over 30 years, he and his team have helped borrowers throughout Honolulu free themselves from unmanageable debt and wipe the slate clean. Visit their website for more information about their debt relief services, or call (808) 532-6300 to schedule a free consultation today.