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How Long Does Personal Bankruptcy Last?

How Long Does Personal Bankruptcy Last?
"If you have recently filed for bankruptcy or are considering doing so, you may believe that your credit is irreparably damaged. While bankruptcy will impact your credit, the impact may not be as severe as you believe. While it is true that a bankruptcy will remain on your credit report for 10 years, its negative effects will diminish as time passes and you establish a positive credit history by paying your bills on time.

The initial year of bankruptcy will be the hardest. Lenders will observe that you have a troubled credit history and will be hesitant to extend you credit. A few companies will issue an unsecured credit card based on your income, but it is virtually impossible to obtain one. Although you may be authorized for a credit card, the interest rate and credit limit will likely be extremely high ($250 to $500).

Repercussions on Credit Card

If you are unable to obtain an unsecured credit card, you can obtain a secured credit card. Secured credit cards require a minimum deposit of $200 or so, which serves as the credit limit. A secured card is a credit card and can be used as such. It is not a debit card or prepaid debit card. You will receive monthly statements and monthly payments will be required. Secured credit cards report monthly to the three major credit bureaus and are an excellent method to build credit.

Impacts on Automobile Loan Eligibility

After one year has passed since your release, you might be eligible for an auto loan. You may be able to obtain a loan, but the interest rate will be extremely high and you will likely be required to make a substantial down payment. The longer you delay after your discharge before approaching a lender, the better terms you will be able to negotiate.

Home Loan Difficulties

In addition, bankruptcy prevents you from obtaining a mortgage loan for two years. After taking significant measures to improve your credit, you may qualify for an FHA loan with as little as a 3% down payment.

Personal bankruptcy need not ruin your livelihood. It will have a long-lasting impact on you, but you can mitigate the negative effects by acting responsibly financially. Your life will continue, and you will be able to obtain credit cards, mortgages, and auto loans if you maintain a decent credit score.""

" - https://www.affordablecebu.com/

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"How Long Does Personal Bankruptcy Last?" was written by Mary under the Finance / Wealth category. It has been read 91 times and generated 0 comments. The article was created on and updated on 03 June 2023.
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