Residents of Kentucky who have gone through Chapter 7 bankruptcy and had their unsecured debts discharged should begin looking for opportunities to rebuild their credit as soon as possible. Although there are some lenders who may not agree to extend credit to an individual who just came out of bankruptcy, there are several products on the market specifically designed for individuals who have completed the bankruptcy process and are looking to restart their credit history.
Even though a bankruptcy does represent a blot on an individual’s credit history, there are several options available to those attempting to strengthen their credit outlook. A secured credit card or loan could be a good starting place for individuals seeking to rebuild their credit with traditional lenders such as banks or credit unions. With a secured credit line, an individual deposits a sum of money and receives a credit line equal to or slightly more than that amount. If the terms of the secured debt are met and the payments for the secured loan are made on time for an agreed upon period, this often leads to the financial institution extending unsecured credit to the individual.
There are also several products available that allow those who have recently emerged from bankruptcy to obtain an unsecured credit card or loan. Because these types of loans do not require an initial security deposit, they often come with much higher interest rates and fees.
Individuals who are feeling overwhelmed because of their debt load may need to schedule a consultation with a bankruptcy attorney to explore their legal options. The attorney can analyze a client’s financial situation and describe available methods of debt relief.
Source: FOX Business, “How Do I Establish Credit After Bankruptcy Discharge?“, Justin Harelik, April 22, 2014