The most recent financial downturn has seen many people applying for bankruptcy after their debts got too much for them to handle. When some people found it hard to pay their mortgage loans and business loans, bankruptcy is one way of going around it. However, it is not as simple as it sounds and is never the easy route to escape paying your debts. This is because being declared bankrupt does a lot of harm to your credit score. Your credit score will be harmed for a very long time and you will not be able to get any credit anytime soon. Bankruptcy is no joke as some institutions will not employ anyone who has been declared bankrupt before. It will take about 10 years to get rid of a bankruptcy record from your records and the only way to be in the good books of lenders is to take time to build your reputation.
Before approaching a financial institution for a mortgage loan after being declared bankrupt, you need to rebuild your reputation. The first way to go around this is to obtain secured credit cards. The collateral for this credit card will be the amount that is available in the card, and nothing more. By using a secured credit card, you will never be able to max it out and with time you will have built your credit score. Getting a car loan after bankruptcy is one way of building your credit score as well.
Approach an after bankruptcy mortgage lender. These are lenders who specialize in lending to people who have been declared bankrupt. The standards that they will require for lending money to you include your effort towards the improvement of your credit score. Others include the passage of a period of time between the application for a new mortgage and the declaration of bankruptcy. Most of these people applying for a loan from the FHA will find it easier to get them when they have made strides in the repair of their credit scores. Applicants will be required to make their payments on time and most lenders will lend mortgage loans to them at higher interest rates thanks to their credit records.
The refinancing of a loan after bankruptcy is possible as well, especially if you are interested in refinancing at a lower interest rate. Given the fact that bankruptcy attracts higher interest rates, this is one way of getting lower interest rates.