Bankruptcy is a situation that none of us wish to be in. This is basically the cease of payments due to the fact that you don’t have enough money to face up your debt. The scenario seems bad, you don’t have any funds in your savings account or your checking account and each day that passes by is worse for your finances. This is when it comes to your mind to take a personal loan for bankrupts.
Do you have any chance of getting rid of those liabilities when you don’t have a monthly income? Yes. You can request a personal loan when you have declared bankruptcy, but remember, it won’t be an easy process.
The lender will decide whether to approve you or not according to different factors such as:
- The type and date of your filing
- Your credit score
- Your income
If you want to know what you need to take into account when taking out a personal loan for bankrupts, stay tuned and pay attention to the following information that Flash Financial Guide brings you.
We’ve mentioned before that bankruptcy is the impossibility of facing the debts you have. But, there are 2 types of bankruptcy that people file to deal with those liabilities, like a car loan, unsecured loans, or credit cards.
- Chapter 7 bankruptcy: This is basically called a liquidation, which can eliminate most of your unsecured debts. However, a trustee may have to sell the nonexempt properties that you have to help you pay off as much debt as possible. You may accept this, because there is some property that may be exempted from selling, like vehicles, basic household furnishings, and the tools you use for work.
- Chapter 13 bankruptcy: This is basically an adjustment plan. It won’t wipe out your debt, but instead, a wage-earner plan will be created so you are able to repay your debt in smaller amounts. Depending on the debt, you may have from 3 to 5 years of a repayment plan. Also, if you file up Chapter 13, you may be able to keep your house and other property and some assets.
Let’s be clear here, bankruptcy is a negative event on your FICO score, your credit score. But how severe it is, depends on your credit score itself. If you have an almost perfect credit score with traditional lenders and other institutions and you go bankrupt, you’ll see a huge drop in it.
On the contrary, if you have a bad or average credit score, and you are used to making late payments or not using the lenders’ funds, you won’t see a dramatic drop.
But don’t worry, the effects of bankruptcy will decrease over time.
What will be difficult for you is that lenders will learn about this unfortunate event when they check your credit reports, and as creditors, they want to see their investment as safe as possible. So, they will have in mind this:
- Chapter 7, the bankruptcy will lessen up to 10 years after the filing.
- Chapter 13, could cost you up to seven years.
So, even under the effects of any type of bankruptcy, you are still able to apply for a loan and get loan approval. Sometimes to speed things up you will need to ensure that you make the required payments on time.
If you are actively looking for personal loan lenders, payday loan lenders, or even for bad credit loans and you have no luck, don’t get disappointed. A lot of lenders won’t lend money to any applicant with bankruptcy but that doesn’t mean you can’t keep trying.
You can apply for as many loans as you like, but be careful with hard credit checks because they could lower your credit score even more. You also should have in mind if you have a loan request pending in banks, credit unions, or any other institutions, so you can know which lenders you have already tried.
In Flash Financial Guide you are able to fill up a loan application that doesn’t hurt you because we don’t do hard checks on your credit report. Once you complete the application, and if you qualify, you will be able to know at once which lenders are up to financing you.
Declaring for bankruptcy is as hard as anyone could imagine, not having enough money to pay taxes, fees, interest, and your luxuries is an unpleasant circumstance that you shouldn’t be passing for.
But remember that not everything is lost. Even if you are in that moment you are still able to come up with ideas to keep living, like requesting a personal loan. And even when borrowers with this situation will have it more difficult than any other time, you can still manage to get out of it over time.
If you need financial help, you can contact Flash Financial Guide to help you out. We will guide you in the entire spectrum of payday loans, personal loans, and other financial services. You will also be able to know more about how to improve credit scores in a natural way.