Best Loans for Discharged Bankruptcies

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Bankruptcy Loans: Personal Loans After Bankruptcy: Chapter 7 & Chapter 13

Finding the right personal loan after bankruptcy can be challenging but not impossible. So how do you increase your chances of qualifying? With Acorn Finance, you can see options from multiple lenders and compare personal loans for after bankruptcy.

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Keep reading to learn more information about bankruptcies, personal loans, and getting a personal loan after going through bankruptcy.

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Can I get a personal after filing for bankruptcy or during the process?

In most cases, it’s not possible to secure a personal loan during the bankruptcy process. However, once the process is completed you can secure a personal loan.

To increase your chance of pre-qualification you should wait a while after your bankruptcy to apply for a personal loan. It can be helpful to start with a secured loan to improve your credibility and show that you can make payments on time.

In addition, it’s likely that the interest rates and fees will be high. This could easily put you back on track for another bankruptcy.

Most lenders like to see at least one to two years of consecutive on-time payments following a closed bankruptcy.If you have this, your chance of pre-qualification can be increased, despite your bankruptcy.


What is your credit score after bankruptcy?

The higher your credit score, the more it can drop after filing a bankruptcy. This means that bankruptcy can be a better option for people with fair or poor credit scores.

Even though bankruptcy can have a positive long term effect on your credit and life, it can be tough in the beginning. According to reliable sources, credit scores 700 or above can drop 200+ points after filing for a bankruptcy.

Lower scores around 680 can drop 130-150+ points after filing for bankruptcy. Fair or poor credit scores (670 or below) can be less likely to see large point drops as a result of filing for bankruptcy.

When should I consider bankruptcy?

Bankruptcies are designed to assist people drowning in debt discover a fresh start and wipe their slate clean. However, before committing to filing a bankruptcy you should consider the positives and negatives. If you cannot repay your debts, you may want to consider going through the legal proceedings to file bankruptcy.

Depending on your situation, you can either file chapter 7 or chapter 13 bankruptcy. In order to be eligible for chapter 7 bankruptcy you must be able to prove that you truly do not have the means to repay your debt. If you qualify, most of your debts should be forgiven after the bankruptcy.

In order to be eligible for chapter 13 bankruptcy you need to prove that your disposable income is significant enough to repay debt using a reasonable repayment plan.


How fast can I raise my credit score after chapter 7?

While chapter 7 can provide relief and leave you debt-free it will remain on your credit report for at least 10 years. Over time its impact can fade, but in the first 10 years it’s important you do everything you can to restore your credit to the best of your ability.

Since lenders may be hesitant to lend you money you may need to get creative using secured loans or co-signed loans to start rebuilding your credit.


How many points does your credit score go up when a bankruptcy comes off?

Despite what you may think, your credit score can actually drop after your bankruptcy comes off. Post bankruptcy removal you can be grouped with others who have not filed for bankruptcy causing your credit score to go down.

The sooner and more you start rebuilding your credit after the bankruptcy, the less it should drop once the bankruptcy is removed.


How bad is it to file bankruptcy twice?

Filing for bankruptcy twice should be evaluated on a case by case basis.

While you can file for bankruptcy two or three times you should consult a professional about your situation before making any decisions.


What is the downside of filing bankruptcy?

Even though bankruptcy can free you of most of your debt, it’s impact is not all positive. Some downsides of filing bankruptcy can include…

Downsides of filing for bankruptcy:

#1. The following debts are not eliminated:

  • Your most recent back taxes
  • Fines owed to government agencies
  • Most student loans
  • Child support and alimony

#2. Non-exempt property is not protected (this could include your home, stocks, cash, etc.)

#3. Bankruptcy stays on credit report for 10 years

#4. Filing for bankruptcy can be costly


How long after Chapter 7 Can I get a personal loan?

In some cases, you can secure a personal loan within a few months after completing the bankruptcy process. However, qualifying for a personal loan with a low interest rate after bankruptcy could be challenging.

Some lenders specialize in personal loans for people with credit challenges. This means that they may be more likely to pre-qualify you for a personal loan after bankruptcy.

Acorn Finance can help connect you to multiple lenders that can help you. Their secure platform allows you to submit one application that will not affect your credit. After submitting your application you can receive multiple personalized loan offers within seconds.


How many years after bankruptcy can you get a loan?

Bankruptcy stays on your credit for 10 years. This means that lenders will be able to see it on your credit report. Some lenders may charge higher interest rights because of the bankruptcy even if you filed years prior.

In most cases, you can have the best chance of approval for a loan 1-2 years after your bankruptcy when dealing with a bank, but you can pre-qualify sooner with some personal loan lenders.

Can I buy a house after bankruptcy?

Yes, you can still buy a house after filing for bankruptcy, however, you should know that it will take a minimum of 24 months of demonstrated good credit activity before you may even be considered. There are numerous ways to rebuild your credit after a bankruptcy, but if bankruptcy can be avoided, you should take other measures to consolidate your debt before filing for bankruptcy. Bankruptcy should be your last resort. If you do everything by the book for 24 months, you may be able to start shopping for a mortgage, but know that your bankruptcy stays on your credit report for 10-years. The mortgages you will be looking at will likely have much higher interest rates, origination fees, and could require a co-signer or collateral.
Will it be easy to buy a house after bankruptcy? No. Is it possible? Yes.

What happens if you declare bankruptcy?

Declaring bankruptcy allows you to take a time out and work with a court to pay down a portion of your debts over time or have some of them eliminated entirely.
As soon as you file, a bankruptcy grants an automatic stay, which is a block on your debt to keep creditors from trying to collect. They are not allowed to deduct money from your bank account, garnish your wages, or go after any of your other assets. With this automatic stay, you will be given time to work with the court and your creditors to figure out your next steps.
Whether or not you will have to sell any of your assets depends on whether you file Chapter 7 or Chapter 13 bankruptcy.
Chapter 7 bankruptcy will require you to sell off some of your assets and take care of at least a portion of your debt. State laws determine which assets are untouchable. For example, your retirement accounts, your home, and one personal vehicle could be exempt. You need to check with your state to confirm what property is exempt and if you are ever declaring bankruptcy, you should always seek legal counsel.
Chapter 13 bankruptcy will not require you to sell any assets and instead, your debts will be reorganized by the court and you will have to pay the debts either in full or partially over the span of 3 to 5 years.

Do you get out of all debts if you declare bankruptcy?

Not necessarily. Though you may have a portion or all of your debts forgiven, you may still be required to pay some of the debt by selling assets or by creating a payment plan with the court.
Also, remember that certain types of debt will not be erased once you file for bankruptcy and have your bankruptcy discharged. Those debts are student loans, taxes owed, child support, and alimony.

What is the downside of filing for bankruptcy?

Filing for bankruptcy is a big decision that will have a lasting impact on your credit report. As there are many benefits to declaring bankruptcy, including having a fresh start, there are many downsides you should be aware of before making a final decision.
Some of the long term effects of bankruptcy include that the bankruptcy will appear on your credit report for up to 10-years. It will appear on your credit even longer every time you apply for a loan of $150,000 or more, i.e. a home mortgage.
Short term, you will not be able to get a mortgage or car loan immediately after declaring bankruptcy. Once you can qualify for a mortgage or a car loan, you will most likely pay higher interest rates and higher fees.
Another long term effect you may experience is once you declare bankruptcy, you are barred from declaring bankruptcy again for several years.
One last thing to note is certain debts do not go away after filing for bankruptcy. Those debts include student loans, tax debt, child support, and alimony.

What happens when your bankruptcy is discharged?

A bankruptcy discharge releases the debtor from personal liability for certain types of debts. Once the debt is discharged, you are no longer legally obligated to pay that debt.
The discharge is a permanent order prohibiting the creditor from taking any form of collection action on the debt and the creditor is no longer allowed to contact the debtor in any way.

How do I restart after bankruptcy?

Once your bankruptcy has been discharged, you can begin the process of rebuilding your finances. The first thing you need to do is to get together a sum of money to open a new checking and savings account. You may want to choose a new bank to go along with this fresh start theme, however, it is not necessary.
The next thing to do is to get a secured credit card. A secured credit card works just like a debit card, however, the credit card will report your payments to credit reporting agencies. This will help to begin to raise your credit score.
Once you have a secured credit card for a few months, you should be able to qualify for a department store or gas station credit card. Pay off the entire balance of your credit card each month to continue to build your credit score.
Continue to pay all your bills on time and do not buy anything you cannot afford.

Is bankruptcy really a fresh start?

Yes, a bankruptcy truly is a fresh start in most cases. It should allow you to start over and get your life back on track.
Once your bankruptcy has been discharged and you successfully rebuild your credit by taking the actions listed above, you can expect to wait at least 24 months before you could potentially qualify for a mortgage.
You can expect to wait at least 6 months after a bankruptcy discharge before you can qualify for an auto loan.
Before making the decision to file bankruptcy, you should consider other options such as a debt consolidation loan. If you are struggling to manage several high interest credit cards, you may be considering bankruptcy. Instead of filing bankruptcy, you may be able to use a personal loan for debt consolidation. Manage one monthly payment with a lower interest loan may be more manageable. To check debt consolidation loan offers with no impact to your credit score, apply online at Acorn Finance.

Can you rebuild your credit after bankruptcy?

Yes, rebuilding your credit is possible after declaring bankruptcy. It is not an easy road, however. You will need to take steps like getting a secured credit card to demonstrate you can make payments on time. It is also recommended that you limit your spending down to bare essentials at this time and save as much money as you can.
Once you have 6 months under your belt of making payments on your secured credit card, you can consider applying for a normal credit card or a car loan. Never miss a payment and only purchase what you can afford. Do this for 24 months straight and you might be able to consider looking at mortgages.

How bad is a bankruptcy on your credit?

Having a record of filing for bankruptcy on your credit report is probably one of the worst credit events to have. The implications of a bankruptcy on your credit record can last a decade, and the process of rebuilding your credit is made even harder by its existence. You may find it extremely difficult to get anyone to open a new line of credit with you after a bankruptcy filing, so the process to rebuild your credit will be a long uphill battle.

Even still, bankruptcy may be a viable option for many people who go way too far into debt and see no feasible way out of it. It is a way to absolve your debts and start over. The magnitude of how important a decision it is to declare bankruptcy can be highlighted by the fact that you should always consult an attorney to help you with the process. They can work with you to make sure you have utilized all other available options before eventually helping you with the bankruptcy filing if that is the determined best course of action.

Filing for bankruptcy is such a monumental event on your credit history, that you should make sure you have exhausted all other options. Have you tried a debt consolidation loan? Have you contacted a credit counseling agency to develop a debt management plan? For a relatively small amount of money, you may be able to have a credit counselor work on your behalf to collect payments from you and pass them along to your creditors and create a buffer where they may be able to secure you a smaller monthly payment when you pay the counseling service directly. Essentially, filing for bankruptcy is not a decision to take lightly and you should be sure you have tried everything else and that bankruptcy is your last resort.

How long after filing bankruptcy does your credit improve?

Improving your credit after a bankruptcy filing is not an easy task, however, depending on your situation you could start seeing a small improvement anywhere from one or two months to at least a year. If you are able to obtain a secured credit card immediately after filing for bankruptcy, you may want to consider doing so to begin building your credit by making all your payments on time and in full. A secured credit card works kind of like a debit card where you only spend the money that you have available in the account. Each month you will send the credit card company a predetermined amount that you are free to use wherever you make regular purchases. Once the amount is depleted, you will have no additional money to spend. The next month, you will then send the credit card company the same amount of money, and again you are free to spend it. Each month you replenish your credit card amount, the credit card company will notify the credit reporting agencies of your successful and on-time payments. It is a slow process, but if you can begin to do this immediately after your bankruptcy is finalized, you can begin to see small incremental improvements in your credit starting the first month.

What is your credit score after bankruptcy?

Filing for bankruptcy can have a dramatic effect on your credit score. It is estimated that if you have a credit score of 700 or above at the time of filing for bankruptcy, your credit score could drop more than 200 points. That is a large downswing going from the 700s to the low 500s. The process to build it back up to where it stood before most likely will take years. If you have a credit score close to the 660 to 680 range, you could see a drop near 150 points. Essentially, where you fall from, you are going to end up in the low 500s at best.

With a credit score of 500, you still may be able to qualify for an FHA loan after bankruptcy, however, it depends on what type of bankruptcy you filed. If you filed chapter-13, you may be able to apply for and be seriously considered for an FHA loan if you have been making your chapter-13 debt payments on time for a minimum of 12-months. If you filed chapter-7, you will need to wait a period of 2-3 years before even being considered.

Can you get a personal loan after bankruptcy with bad credit?

If you are looking to obtain a personal loan after you have a bankruptcy filing on your credit report, it can be extremely difficult but it is not impossible. If you have filed for chapter-13 bankruptcy, your chances might be a little greater than filing for chapter-7, however, either way you may have to have a bit of a cooling off period before any lenders will seriously consider your loan application.

If you begin the credit repair process immediately after your bankruptcy is finalized, you may be able to begin to see incremental increases in your credit score each month. By continuing to maintain on time payments to a secured credit card or a credit-building loan, you may be able to raise your score up high enough to be considered for a personal loan. Either way, you may need to wait some time before you are able to be considered. You also may need to seek permission from the court to apply for a new line of credit if you are in the process of a chapter-13 banruptcy repayment plan.

How long is your credit bad after bankruptcy?

After filing for bankruptcy, you can expect to have bad credit for sometime, however, with some hard work you could eventually get your score up into the fair range within the first 12 to 24 months. It is estimated that almost 43% of borrowers who declared bankruptcy were able to raise their credit score above 640 within 12-months from when the bankruptcy was finalized. If you look at a 24-month period, that figure increases to almost 65%. That being said, a bankruptcy is going to linger and have some sort of negative impact on your credit report for quite some time.

If you declare chapter-7 bankruptcy, you can expect to see the bankruptcy filing on your credit report for upto 10-years. It may even have some effect on your credit profile if you try to apply for a mortgage after that 10-year period.

If you file chapter-13 bankruptcy, you may be likely to build your credit faster because your payments to the creditors involved in the bankruptcy filing will be reflected in your credit report. However, even if the process to pay-off your chapter-13 bankruptcy only takes 2 or 3 years, it will still have some negative impact on your credit for up to 7-years.

Is bankruptcy worse than having bad credit?

Yes, in a basic sense, having a bankruptcy is worse than just simply having bad credit. With bad credit you may still have some hope of securing a debt consolidation loan or joining a debt management counseling service before it is too late and you need to file for bankruptcy.


In conclusion, it is possible to secure a personal loan after going through bankruptcy. It’s important to remember that interest rates might be higher making it important for you to make sure payments are manageable. The only way to help build your credit again is to use it so you may have to accept the higher interest rates until your credit health is better.

Best personal loan options for people who have gone through bankruptcy

Acorn Finance is one of the best places for people that have gone through bankruptcy to secure a personal loan.

Acorn Finance is a reliable and top-rated company that partners with a variety of lenders to offer personal loans for all credit types.

Three steps to get started with Acorn Finance:

#1. Complete and submit a short loan application online

#2. Receive multiple pre-qualified offers

#3. Get connected with lenders to obtain your pre-qualified loan

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