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Bankruptcy Law Blog

Friday, August 28, 2015

Moving Past Bankruptcy: How the Process Impacts Eligibility for Future Secured and Unsecured Loans or Credit

I just finished bankruptcy, will I ever be able to take out a loan again?

While bankruptcy will undoubtedly appear on your credit report, and may initially negatively, impact as a former debtor, the long-term effects of a bankruptcy filing are minimal compared with the financial freedom one can experience as a result of discharging toxic debt obligations.

Under changes to federal regulations, creditors are required to report a $0.00 to credit reporting agencies if a debt has been discharged in bankruptcy. Moreover, there are a number of techniques for debtors to consider in order to repair their credit during the months and years immediately following bankruptcy.

While it may seem counter intuitive, applying for new unsecured revolving accounts is one way to boost your credit rating – assuming, of course, that your balances are paid in full at the end of each billing cycle. The reason for this is that creditors like to see a debtor is holding available credit without using it or “maxing it out,” thus demonstrating self-control and a character for creditworthiness.

Bank loans are another way to establish credit, but it may be necessary to apply with a co-signer in the first few years following bankruptcy. For the reasons described above, a loan that is paid on time and according to the terms of the promissory note will help establish a reputation for creditworthiness, resulting in an increased credit score.

Lastly, remember that patience and steadfastness are an important mental component to rebuilding credit. Your credit did not plummet overnight, so it will take a few years to restore it completely. Over time, however, with careful practices and a dutiful financial attitude, you can restore your credit to a rating better than ever before. In additional, bankruptcy will eventually “fall off” your credit report after a period of 7-10 years.

If you are considering consumer bankruptcy protection and would like to discuss your options, we encourage you to contact Padgett & Robertson, Attorneys at Law, representing clients throughout southern Alabama. We are located in Baldwin County, Alabama and can be reached at 251-342-0264.


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Padgett and Robertson assist clients with Bankruptcy, Personal Bankruptcy, Consumer Bankruptcy, Chapter 7 Bankruptcy, Chapter 13 Bankruptcy and The New Bankruptcy Law in Mobile, Alabama and throughout southern Alabama. Alabama State Bar Association Regulations require the following: "No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers." 11 U.S.C. 528 of the U.S. Bankruptcy Code requires the following: "We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.”



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| Phone: 251-342-0264

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