We have a general public perception of bankruptcy as a negative impact on your life and although it is true that a bankruptcy is not a favorable mark on your credit, bankruptcy should actually be perceived as a solution rather than the problem. Bankruptcy exists to help difficult financial situations. Your debt, collections, wage garnishments, bank levies, and other collection activities are the problem which a bankruptcy solution can solve. So, what exactly will happen to your credit availability after a bankruptcy. The truth may surprise you.
After effects of a bankruptcy definitely includes a reduction of your credit score and a notation of a bankruptcy filing. This does not mean that you will not have credit available for 10 years. The bankruptcy mark on your credit is on your credit report for 10 years, but the impact of a bankruptcy will not last very long. While the bankruptcy is active in the court system, your credit availability will not change. If you have a lot of debt and you are resolving it in the bankruptcy, you will see some new credit offers immediately after the bankruptcy. You read that correctly. You will get credit offers immediately after the bankruptcy process is over. The bankruptcy process in Orange County, Riverside County, San Bernardino County and Los Angeles County takes about 3 months to process to discharge your debts and close the file in the court system. The new credit offers will come to you by mail right after the bankruptcy case is closed in court. The reason you will receive these offers is because your debts have been relieved and the banks are assuming that you now have the income to support some debt payments. The banks are also aware that you cannot file for bankruptcy again for another 8 years. So, they are no longer at risk of getting their debt discharged in another bankruptcy for another 8 years.
Auto loans are usually a concern for people who want to file bankruptcy but are in need of a new car for transportation. We have received information from our past clients and some car dealerships reporting that a bankruptcy on your record is not a concern for them. You should check with your auto dealer that you would like to work with and ask them if they can finance with a bankruptcy on a credit record. You can find out directly from the auto dealer and see what your options are.
Home loans are another great concern for bankruptcy filers. The best thing to do is to contact a mortgage broker and ask about the lending guidelines with a bankruptcy on a credit record. We have researched with some mortgage lenders and found that 3 years after a bankruptcy is a standard guideline to be able to secure a home loan. The lending guidelines are always changing. So, you should take the time to ask your mortgage broker how long you would have to wait after a bankruptcy to apply for a home loan.
Keep in mind that bankruptcy is the solution to debt issues and not the actual problem. You can use bankruptcy to put yourself and your family in a better situation. It is a right given to you by the government of the United States. We hope you had a great Memorial Day weekend. Thank you to all who have served in our military forces and best wishes to those who have lost someone in fighting for our country.
Bankruptcy Law Professionals is a Bankruptcy Law Firm with offices in Orange County and Riverside. We provide free consultations for all of our clients. Please contact us at 855 257-7671 for more information on bankruptcy solutions.