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Personal Financing

Post Bankruptcy Personal Financing

Is it possible to secure personal financing after filing for bankruptcy? The short answer is: yes. Of course, your personal financing options will be severely restricted as creditors examine your credit reports and credit scores and see your recent bankruptcy filing. Indeed, a personal bankruptcy can stay on your credit report for as long as ten years time. Don't think that this important piece of information won't dissuade many lenders from giving you money! You do, however, have some options. Let's take a look at what they may be and how you can avoid being held hostage by high interest lenders.

Your Credit Card - If upon filing for bankruptcy you had one or more credit cards on hand and you were not behind on payments with the card and you did not default on what you owed to the card company then your MasterCard or VISA may be the best choice for personal financing. No, that low 9.9% rate may be long gone, but you could still have a 15.4% interest rate which is the average rate charged on credit cards these days. This rate is a lot better than the alternative which follows.

Personal Financing Companies - Bad credit personal financing companies abound. Without naming companies specifically, you will see that many would be glad to offer you personal financing but at a price…a hefty price at that. Their rates are sky high and depending on your state or province there may be little to keep them from charging you 29% or more for personal financing. Is this legal? If your state or province says so, then it is. You'll be paying off this debt until kingdom come!

Loan Shark - Trust me this is never a good option. Instead, Payday loan companies are one alternative to extremely short term loans. If you thought personal financing companies were a rip off, then a payday loan provider takes the cake. Charging anywhere from $10-$30 per $100 borrowed, these seven day loans actually translate into an annual interest rate charge exceeding 400%! Not your bargain but an easy - and dangerous - way to secure personal financing for the short term.

Also consider borrowing money from your 401(k) account or getting cash from a life insurance policy if you need a cheap source of funds in an emergency. Other than that you can expect to pay through the nose for personal financing until your credit standing improves as many as ten years down the line.