Bankruptcy loans are a line of credit that you can use to repair your credit rating after you apply for bankruptcy. Generally, these types of loans are applied for after you file bankruptcy. Therefore, you do not need to apply for a bankruptcy loan until after you have already filed your bankruptcy information.
Basically, once you have filed bankruptcy, your credit rating will be very bad. The only way that you can improve a bad credit rating, however, is to pay off new lines of credit. A bankruptcy loan can be a great opportunity to do this – you’ll easily be able to get the loan to begin with, and if it is for a low enough amount, you will be able to pay it off be fore you need to worry about the high interest rates.
These bankruptcy loans are also a good way to consolidate any remaining debts that you might have. This is the case if you have remaining debts that cannot be discharged after a Chapter 7 bankruptcy, or if you have only filed a chapter 13 bankruptcy and are in the middle of your reorganization period. Either way, if you are able to get a bankruptcy loan and pay it off on time, then you will definitely be able to improve your credit rating. This is actually the only known way that you can improve your credit rating, so you should definitely look for good creditors right away.
Before you leap in and apply for a bankruptcy loan, however, you should definitely go to a consultant. That way, you’ll be able to figure out which loan will be the best for you. You’ll also be able to get a professional opinion as to which rates and terms will be the easiest for you to pay off.
One thing that you should keep in mind is that if you are looking for a bankruptcy loan either after or while you are in the middle of bankruptcy proceedings, you might not be able to use the loan for everything. For instance, while you might be able to get loans that you need in order to pay for necessities or existing debts, other types of loans may not be available to you.