Chapter 7 Success Lawyers Chicago - Credit After Bankruptcy

Credit After Bankruptcy

That brings us to another misconception. Talking about cars and that’s what people are kind of worried about. People want to know what happens when I file a bankruptcy. Does that mean that I’m not going to be able to get any credit? I’m not going to be able to purchase a new car or a house, or even get a credit card?
That’s a great point. One of the things that amazes me is before someone has even received a discharge or gotten out of debt at all. They are worried about when they are going to get credit again, when they can get a car, when they can get a credit card. They might have $50,000.00 or more in debt and they’re worried already about when they can get credit and that’s part of the whole problem here with these lenders. The credit is available. Let’s talk about an auto, for example. Once a bankruptcy case is filed, that filing does become public record. Auto finance companies know how to retrieve that record and they will solicit to you. They will say bring in your discharge paper, we’ll get you in a car, we’ll finance you, you’ll be back on the road.
Why would they do something like that? Well, for one thing, they know that you cannot file again for eight years and a day. They are also going to hit you for a higher than normal interest rate. Additionally, they want your business. They want to carry that loan. Now, what I recommend to people that I counsel on bankruptcy is if you can wait six months to two years before you seek credit, you’ll find that the interest rate has dropped considerably. And this is especially true with a car loan or a mortgage on a house. Two years is the threshold that most mortgage lenders use to drop that rate to a more reasonable level. Now it won’t be as good if you never filed bankruptcy, however, if you can wait two years, the interest rate will fall to a more reasonable and affordable level.
But, that’s only assuming that the debtor keeps up his payments on whatever he’s paying on, right?
If he’s late on some bills, that’s going to effect that credit rate too and that interest rate as well.
True.

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