Credit After Bankruptcy - Is It Possible?

One of the most common inquiries debtors inquire bankruptcy lawyers is "Will Iodine be able to get credit after filing bankruptcy?".

Most people are suprised to happen their letter boxes flooded with new credit offers after filing bankruptcy. Why makes this happen? Why would a creditor give more than credit to person who have filed bankruptcy?

Creditors do money by lending money. If creditors don't impart money, they don't do money. Even credit cards for people with the best credit evaluations often carry credit card balances that volition not be paid off within the adjacent 20 old age if the debtor pays the minimum monthly credit card payment.

Creditors impart money based upon a debtor's debt to income ratio. Debt to income ratio is the amount of debt a debtor have versus the amount of money the debtor earns. If a debtor have monthly debt that transcends the debtor's monthly income, the debtor is obviously a poor credit hazard and it is improbable that a creditor will put on the line loaning money to the debtor.

What haps to a debtor's debt to income ratio when the debtor data files bankruptcy? The bankruptcy will pass over out the debtor's debt and go forth the debtor with the same income. Filing bankruptcy transforms the debtor's debt to income ratio and makes a positive lending prospect for the creditor.

Creditors also cognize that the debtor who have filed a chapter 7 bankruptcy will not be able to register another chapter 7 bankruptcy for 8 more than old age under the new bankruptcy law. Creditors cognize that the debtor who have filed bankruptcy is stuck with whatever new credit is issued and will not be able to discharge the debt as easily in a second bankruptcy.

Filing bankruptcy can actually better the credit mentality for many debtors. Most bankruptcy lawyers offer free audiences to discourse bankruptcy and credit issues.