Having financial struggles can make certain aspects of life seem impossible. Even the idea of overcoming the debt that a person has may seem like something that can never happen. Though debt relief options like bankruptcy exist, some Florida residents may discount this option because they believe that they will never again be able to qualify for a loan if they need one in the future. Fortunately, that is not typically the case.
Certainly, filing for bankruptcy will make future creditors look at an individual’s loan application with more scrutiny, but it does not mean that the person will never be approved for a loan again. The person may face less favorable terms for the loan, such as a higher interest rate or additional fees. Still, if the applicant needs a loan and has the means to stay on top of payments, these terms may not be as disheartening as they initially seem.
On another note, the following factors could help someone bolster the chances of being approved for a loan after bankruptcy:
- Filing for Chapter 7 bankruptcy, which could allow a person to qualify for a loan more quickly because this process takes less time to discharge debt than Chapter 13
- Having a steady income stream to show lenders that the applicant has the means to repay the loan
- Applying for a loan after the bankruptcy has fallen off the credit report, which could be up to 10 years
- Taking steps to improve one’s credit score after completing bankruptcy, such as making sure to pay bills on time, taking out a secured credit card or a credit-builder loan
Worrying about qualifying for a loan in the future is a common reason people choose to forgo bankruptcy. However, it is likely that discharging debt through this relief method could give individuals the opportunity to start fresh and rebuild their credit so that they will look more favorable to creditors in the future. If Florida residents are interested in gaining more information on how Chapter 7 or Chapter 13 could affect their current and future financial endeavors, they may want to contact local legal resources.