Can You Obtain Lines of Credit After Filing for Bankruptcy?

A lot of consumers inquire a common question to their bankruptcy lawyers, “Can I still obtain lines of credit after filing for bankruptcy?”

If they don’t get an answer to this question, then, when they go home to open their mailbox and find a plethora of invitations to receive lines of credit with credit card companies, most consumers are initially shocked. Some wonder: Why am I getting these invites? Do creditors really want to offer me a line of credit even after filing for bankruptcy?

The simple fact of the matter is credit card companies only make money by lending out money. Some people with the best lines of credit cannot pay off debt incurred with just the minimal payments for nearly a lifetime.

Credit card companies decide to lend their services by calculating the consumer’s debt to income ration. Debt to income, ratios encompass the consumer’s earned wages against their outstanding debt accounts. Poor credit risks come from consumers owing money to a lending company with amounts reaching beyond their current income.
How is the debt to income ration calculated after filing for bankruptcy? Some cases for bankruptcy eliminate all outstanding debt accounts and leave the income amounts for consideration. Thus, the consumer has a positive debt to income ration and lenders will seek the business of these individuals.

The new bankruptcy law doesn’t allow an individual to file for Chapter 7 bankruptcy within an 8-year time period. Creditors use this provision as a means to guarantee payments from the consumer. If consumers rack up the debt a second time around after filing for bankruptcy, it will be harder to discharge 7 to 8 years later by filing for a new bankruptcy case.

Make sure to discuss all matters of finance before and after bankruptcy with a trained professional, such as a bankruptcy attorney or credit counselor.

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One Response to “Is There Credit After Bankruptcy - new”

1. Bankruptcy Aid : Blog Archive : Is Bankruptcy Right for You? Says:
   September 19th, 2007 at 11:21 am

   […] Is There Credit After Bankruptcy […]

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