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Bankruptcy Law Blog

Saturday, June 30, 2018

Getting A Loan After Going Through Bankruptcy

One of the biggest downsides of filing for bankruptcy is that it limits your access to credit. It can be difficult to get a home loan, car loan, or credit cards after going through the bankruptcy process since lenders worry that you are a risky person to deal with. However, there are ways to restore your credit-worthiness. This post will cover some basic things you can do if you want to get a loan after filing for bankruptcy.

Why won’t lenders lend to people who have filed bankruptcy?

The reason getting a loan after going through bankruptcy is difficult is simple — lenders worry that you will file for bankruptcy again. While some people do end up filing for bankruptcy multiple times, most filers do not. The way to show that you are not likely to file again is to develop good financial habits.

What kind of financial habits are we talking about?

The vast majority of people file for bankruptcy because something happened that pushed them over the financial cliff — they lost their job, had a mortgage that went underwater, or suffered some health problems. None of these things mean that you were inherently bad at handling money and will be forever at risk of filing for bankruptcy again.

The way to demonstrate the bankruptcy was a fluke, and not something that will likely happen again is to model good financial choices.

The first thing to do is to open a checking account and a savings account. Try to put a little bit into the savings account each month.

Next, consider getting a credit card. Charge a small amount to the card each month, and pay it off immediately. Try to only charge things that you are already planning to buy, like gas or groceries, so you know they are in your budget.

Finally, pay the bills on time. Each month that you do so will demonstrate your financial responsibility.

In a few short years, these habits will rebuild your credit score to the point where lenders will be willing to offer you a loan at a reasonable rate.

Get Help if you Need it

Worrying about future access to credit is not a reason not to file for bankruptcy if you truly need to do so. It is always possible to rebuild your financial reputation, it just takes time and a focus on developing a few good habits.


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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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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.”