Even though you are going through a bankruptcy hearing, it is still possible to apply for credit. However, this is restricted to those seeking relief under a Chapter 13 petition for bankruptcy. In most cases, applying for credit is done in order to facilitate a loan reconstruction.

There are a number of issues that you need to be aware of when seeking credit while under the protection of bankruptcy. Your credit risk will be assessed as high and this could draw much higher interest rates. You should also be careful about making too many applications – this can also harm your score.

Before looking to consolidate a loan, talk to your bankruptcy lawyer. Obtaining  credit while under protection of the courts may seem like a good idea, however, it could also be fraught with danger. In some situations, you may decide to reaffirm a debt. This does not change the debt, it just reaffirms your commit to honor it. What it will do is remove it from the list of debts to be discharged.

Debtors need to be wary if a creditor asks them to reaffirm their debt. This practice is normally only recommended for vehicle and student loans. You can also voluntarily repay a loan without going through the legal reaffirmation process.

You can apply for credit during a Chapter 13 bankruptcy, however, in most cases it is not recommended. You cannot apply for any new credit under a Chapter 7 petition, but you may reaffirm a debt as described.

Related posts:

  1. Discharging Credit Card Debt Through Bankruptcy
  2. What Is Credit Counseling And Why Is It Compulsory?
  3. Credit Counseling Is Not An Option – It’s Compulsory
  4. Updating Your Credit Record After Bankruptcy
  5. Is Pre-Bankruptcy Credit Counseling Right For You?