Life After Bankruptcy – Can I Get a Loan or a Credit Card?

Life After Bankruptcy

Birmingham Attorneys giving you your life back after Bankruptcy in Homewood, Irondale, Cullman and throughout Alabama

Many people are reluctant to file for bankruptcy, feeling they can never re-establish their credit, and will never own a home, car, or credit card again.  Fortunately that isn’t true, and shouldn’t prevent you from considering bankruptcy if you are strapped with debt.  Removing thousands of dollars of debts and high monthly payments can give you the freedom you need to begin building wealth, and saving for retirement.

Let’s assume you’ve been through bankruptcy, done everything you’re supposed to do, you’ve avoided getting tricked into signing a reaffirmation agreement, and you receive your discharge – now what? As you are probably aware, bankruptcy is a trade-off between protection for debtors and fairness to creditors. So what happens after the discharge? Under Chapter 13, the debtor is now subject to a specific repayment plan, which will continue to be monitored by the trustee in exchange for you getting to keep your property. Under Chapter 7, the slate is wiped clean for the debtor, and all old pre-petition debts are discharged. What is known as a discharge injunction prevents any creditors from asserting those old claims; legally, they do not exist anymore.

However, while the debts are wiped out under a Chapter 7 discharge, the fact of the bankruptcy is not. While most debtors who are eligible for Chapter 7 probably didn’t have a sterling credit rating in the first place, they now have a bankruptcy filing on their credit rating. The bankruptcy will show up on the debtor’s credit rating for ten years following the discharge. This will make credit harder to obtain, and will also subject the debtor to higher interest rates on the credit he is able to obtain.  However, it doesn’t mean credit will be impossible to obtain.  Many lenders will lend, assuming you have stable employment and income.  Also, if a debtor gets behind again after a discharge, it is important to note that he will not be able to receive another discharge for a period of 8 years.

The bankruptcy attorneys of Parkman White, LLP can help you formulate a long-term plan for financial success, and provide credit counseling for life after bankruptcy. Contact us today at 205-502-2000 for a consultation, and let us put our experience to work for you.