Share

Bankruptcy Law Blog

Saturday, October 31, 2015

Avoiding Post-Bankruptcy Lending Scams

I just went through consumer bankruptcy, and seem to receive solicitations for loans and credit cards almost daily. Is this a scam?

It is no secret that the bankruptcy process will temporary impact the petitioner’s credit rating and eligibility for new financing. In the long-run, however, bankruptcy can significantly reduce outstanding debts and liens, leading to an overall brighter financial future. Recent filers should be warned, however, that unscrupulous lenders will take very opportunity to exploit bankruptcy petitioners, primarily due to the presumption that these individuals are “desperate” for credit and will accept virtually any interest rate offered. As experienced bankruptcy practitioners, we encourage you to maintain your newfound freedom from the grips of debt, and to hone your skills in spotting a lending scam before it can ever hit home.

Signs of a Scam

Scammers in any industry rely on the psychological vulnerabilities of their targets. Scams against the elderly, for example, often rely on the notion that elderly individuals live alone, need someone to talk to, and can be easily persuaded into anything with a casual, friendly conversation.

Unfortunately, the same is true with post-bankruptcy lending scams. In the weeks and months following the bankruptcy process, some debtors may feel hopeless and out of control of their financial futures. Using this to their advantage, scammers will entice borrowers to restart the debt cycle by entering into wildly unfavorable – and sometimes illegal – credit agreements, often with unthinkable interest rates and skewed repayment terms.

Other signs of trouble include unsolicited, relentless offers over the telephone or through the mail. In addition, loans and credit products promising to improve one’s credit score are generally correlated to unfavorable repayment terms targeting those in “desperate need” of financing – again, relying on the psychology of vulnerability.

The best bet? Stay on the straight and narrow, avoid pursuing new debts, and if an offer seems too good to be true, it almost always is.

If you are considering personal bankruptcy or have questions about how the process will impact your credit rating, please contact Padgett & Robertson today: 251-342-0264.


Archived Posts

2017
2016
2015


Bankruptcy Law News

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.”



© 2017 Padgett & Robertson
4317 Downtowner Loop N., Mobile, AL 36609
| Phone: 251-342-0264

Personal Bankruptcy | The New Bankruptcy Law | Testimonials | About Our Firm | Bankruptcy | Client Resources | Getting Started

Facebook

Attorney Website Design by
Amicus Creative