Bankruptcy Affect Credit Article

Is There Such A Thing As Post Bankruptcy Credit?

After bankruptcy, people generally question their chances of obtaining credit. They are scared that creditors may have lost their trust in their capacity to repay. But bankruptcy is not like that at all.

Aside from gaining protection from your creditors, bankruptcy also employs your assets to pay off your debts. So the question would be how to make a fresh start, or is there still a chance for you.

It's indeed possible to have credit after bankruptcy. Actually, you can hold on to your credit card after declaring bankruptcy.

But you have to consider as a debt your credit card's standing account during bankruptcy filing. And you need to declare all your other debts to continue your credit. Failing to do so may not only wipe out your chances of post bankruptcy credit, but may also put you to prison. However, if you have no unpaid balance on your credit card, you're not obliged to inform the company of your bankruptcy.

You can then still have credit through that card even after going through bankruptcy. But credit card companies may eventually discover the bankruptcy from other sources and consequently have your card cancelled. American Express usually does this as a precautionary measure to avoid bad debts.

Credit card companies generally let you hold on to your card if you bargain that your debt be reaffirmed even after the bankruptcy has been declared. Thus, your credit continues if you agree to be charged with the original amount of your debt prior to bankruptcy filing. In short, you need to form a new contract with the creditors to avail of post bankruptcy credit.

So, what's the premise underlying post bankruptcy credit? As you understand, bankruptcy is viewed by creditors as a risk to their operation. And for them your credit is business. Once they cancel your credit, it would be probable that they won't be able to demand payment from you. But if they opt to grant credit in exchange for a chance to get paid fully, they would probably give you credit.

Most people view bankruptcy as an opportunity to start anew. And certainly credit corporations would like to gain from that new start. Hence, they let you have post bankruptcy credit.

There are consequences you need to be aware of though. Should you really wish to obtain credit after declaring bankruptcy, you need to agree to the company's certain terms and conditions.

First, you may be granted lower credit limit, which is just a precautionary move of the company.

By implementing this policy on post bankruptcy credit, the company ensures that you'll only spend what's within your capacity to pay. Also, you might be paying a little more due to your credit record. The credit company employs this measure too to ensure that they can collect certain amount from you. In conclusion, post bankruptcy credit may be difficult to obtain, but it certainly exists.

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