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Personal loan after bankruptcy — is it possible?

On Behalf of | Oct 11, 2023 | Bankruptcy Law |

The short answer to this question is, “Yes, it often is possible.” Numerous factors come into play regarding the ability to borrow money after filing for debt relief in Mississippi. One issue that is relevant is the type of bankruptcy that was filed, such as Chapter 7 or Chapter 13. Both remain on a credit report for up to 7 (Chapter 13) or 10 (Chapter 7) years. However, neither prevents a person from obtaining a personal loan. 

There are many companies willing to loan money to people with lower credit scores. Lists that name such companies are available online. It is also sometimes possible to borrow against a 401(k) plan or apply for a home equity loan. For those who do not have either of these resources available, a secured credit card may be a viable option, provided the applicant is able to make a cash deposit to secure the line of credit.  

3 ways to increase the ability to secure a personal loan after bankruptcy 

One of the benefits of filing for bankruptcy is that it often enables people to restore financial solvency by restructuring their finances. When the goal is to become eligible for a personal loan, it is wise to implement these ideas:  

  • Obtain prequalification for a loan online. 
  • Draft a budget that includes regular expenses plus a monthly loan payment. 
  • Ask a friend or family member to co-sign the loan.  

Having a co-signer not only improves the chances of getting a loan, it also helps secure better terms, such as a lower interest rate. Becoming eligible for a personal loan after bankruptcy may take time, but it is possible. 

Which type of bankruptcy is best? 

Choosing a bankruptcy program that best fits a particular set of needs and goals is the key to rebuilding finances, and to being able to obtain a personal loan as needed. A bankruptcy law attorney can review a case and make recommendations as to which option is most viable for a specific client. Such an attorney can remain on hand to help resolve any legal complications that arise throughout bankruptcy proceedings.