5 Ways Bankruptcy Can Impact Your Ability to Get a Personal Loan

 

Bankruptcy can be a difficult situation to navigate. It can affect your financial stability not just in the present, but in the future as well. One of the many ways bankruptcies can affect your finances is your ability to get a personal loan. In this blog post, a Chapter 13 assistance lawyer will explore 5 ways bankruptcy can impact your ability to get a personal loan. 

1) Credit Score

One of the most significant ways bankruptcies can impact your ability to get a personal loan is your credit score. After filing for bankruptcy, your credit score will take a hit. This can make it difficult to qualify for a personal loan or may result in higher interest rates. It’s important to monitor your credit score regularly and take steps to improve it over time. 

2) Type of Personal Loan

Another way bankruptcy can impact your ability to get a personal loan is the type of loan you’re applying for. A secured personal loan may be easier to obtain because collateral is provided. An unsecured personal loan, on the other hand, maybe more difficult to qualify for because there’s no collateral to secure the loan. 

3) Your Income

Lenders will check your income to see if you can repay the loan. Demonstrating a consistent source of income indicates you can pay back the loan. It’s important to consider your financial situation before applying for a loan and make sure you can afford the repayment amount. 

4) When Bankruptcy was Filed

The timing of your bankruptcy filing can also impact your ability to qualify for a personal loan. If you filed for bankruptcy recently, lenders may be hesitant to approve a loan. On the other hand, if your bankruptcy filing is several years old, lenders may be more lenient in considering your loan application. 

5) Type of Bankruptcy

After filing for personal bankruptcy, there are two types- Chapter 7 and Chapter 13. It's important to note that the type of bankruptcy filed can affect the timeline for when you can apply for loans again. Once your debt is discharged under any type of bankruptcy, you can apply for a personal loan. Chapter 7 bankruptcy typically takes four to six months to complete, while Chapter 13 bankruptcy can take up to five years to discharge the debt. After your debt is discharged, you are eligible to apply for new credit. 

  

Bankruptcy can be a challenging experience, and it can have long-lasting effects on your finances. If you’re considering filing for bankruptcy or have already filed, it’s essential to understand how it can impact your ability to get a personal loan. By working to improve your credit score, demonstrating steady income, and speaking with a professional about debt relief, you can increase your chances of being approved for a loan after bankruptcy. 
 
Lewis and Jurnovoy is a local law office serving the Florida Panhandle. We specialize in bankruptcy law, including Chapter 7 and Chapter 13 bankruptcy. We will work to achieve the best financial remedy for your outstanding debts. 
 
Lewis & Jurnovoy PCB 
2714 West 15th St 
Panama City, FL 32401 
(850) 913-9110 
https://www.LewisandJurnovoy.com