When debt becomes so overwhelming that a person is reduced to a substandard lifestyle and debilitating mental torment, bankruptcy may be the only way out. Declaring bankruptcy is an ordeal almost as bad as the indebted state itself. However, enduring such an ordeal and coming back may be indicator of future super star quality. Way one to start a comeback would be landing a personal loan after bankruptcy. Seeing it through according to the contract will indicate your reliability and creditworthiness.
Waiting in the Wings
One thing you should consider before declaring bankruptcy would be to take out a personal loan to consolidate your debt. This will pay off all your creditors, which is a great credit score booster. And your monthly payment will probably be far less than the aggregate of all your past creditors. You should start your search for such a loan by shopping on the web. Many folks have taken big hits on their credit scores because of these financially unstable times and many private lenders have stepped into this hot market.
Comeback Act One
Once a Chapter 7 bankruptcy has been granted by the judicial system, you may have to wait two years before fruitfully asking for a loan. During those two years, your income and your stability will be the most important factors to attend to. To prove that you are not really a high-risk borrower, keep all your time payments, even utility bills, up to date. Look for small opportunities to prove your creditworthiness. More suggestions follow.
Comeback Act Two
Do not just wait during the two years. Plop down the security cash for a secured credit card. Use it and pay if off every month. This will involve only about $300 and will be a great way to prove your creditworthiness. Never allow the security deposit to be used for any payments. Just make your payments on time every time. Each payment is another swipe to clean up your tarnished financial past. But do not commit yourself unless you are sure you can make the payments. Not doing so will just add another smudge.
Comeback Act Three
Another way to prove creditworthiness is to take out a small loan from a cash advance lender. You put the loan funds into a separate bank account and tie automatic payments from that account to the lender. You are establishing creditworthiness and making a little passive income from the interest. After doing this a few times, your creditworthiness will slowly but steadily rise. A good way to find these lenders is to go online. Interest rates will be pretty high, but the cost is worth it to rebuild your credit.
Comeback Act Four
Some folks will open a store credit account, use it, and keep it paid off regularly. These venues could be a local jewelry store, or an appliance store. Maybe some local mom and pop enterprise would be willing to give you a time payment plan for merchandise or a service. Once your debt is paid, ask the proprietor to give you a letter of creditworthiness.
Post Bankruptcy Personal Loans
You do not fall off the stage never to star again after bankruptcy. Just perform a lot of little acts as indicated above and you will slowly but surely have yourself once again in the creditworthiness spotlight.