Credit Repair and Getting Loans After Bankruptcy

Even if you’re facing severe financial difficulties, the social stigma around filing for bankruptcy can get in the way of making decisions that will positively affect your circumstances in the long term. But, getting past the negative social ideas around filing for bankruptcy might be the best choice you can make for your household’s financial health and overall quality of life.


The debt relief that bankruptcy provides alleviates the burden of unpaid bills and loans, prevents creditor harassment, stops foreclosure, and eliminates wage garnishment. Despite the truth that bankruptcy will damage your credit score temporarily, once your case is closed, you can start with a fresh financial slate where a lowered credit score might not even matter.


If you’re considering filing for bankruptcy, Behm Law Group, Ltd. can guide you through the process and help you begin your path to credit repair in Marshall, MN and the surrounding areas.


Though its damage to your credit score is far outweighed by its benefits, filers should keep in mind their standing after their case is closed. Filers with good credit scores will experience a significant drop after filing for bankruptcy, but those with a poor score will only see minor changes. Even though your score drops when you file, the post-bankruptcy period is an ideal time for effective credit repair.


In addition to having an opportune moment for credit repair, filers will most likely still be able to get loans of necessity after their case is closed despite a score drop. Credit card loans are often the easiest lines to open after filing, but other important loans like mortgages and car loans are also possible.


Credit Cards: Credit card companies will jump to offer you lines of credit if they know you’ve just finished a bankruptcy case. Because you won’t be allowed to file another case any time soon, they know you won’t be able to discharge any debts you rack up on their cards. Those who have just filed for bankruptcy should be wary of extreme interest rates, high annual fees, and potential hidden charges.


Auto Loans: Even if you have a large dent in your credit score after filing, you’ll probably still be able to get a reasonable car loan. However, most of these loans will come with poor loan terms and excessive interest rates. is a service available that helps you determine if you’re eligible for better car loans other than those offered by “bottom feeder” creditors.


Mortgages: For the most part, you’ll have to wait two to four years after your bankruptcy case is closed to be eligible for conventional mortgages. FHA loans might be available to those still in their Chapter 13 bankruptcy repayment period or to those two years after their Chapter 7 case is closed. While these are minimum periods, many filers will have to wait longer to get a mortgage depending on the lender and their current finances.


To learn more about bankruptcy and credit repair in Marshall, MN, contact Behm Law Group, Ltd. today at (507) 387-7200 or