BANKRUPTCY

Michael Holigan: Not everyone who acquires a loan has stellar credit. In fact, loans are made everyday to people who at one time went bankrupt.

Susan Doane: It'll never go off your credit report record, but you can still get a mortgage loan as long as you've reestablished a good credit standing.

M.H.: There are business bankruptcies and personal bankruptcies, and either one can set you back. But even with these black marks on your credit, you can still get a loan. And you might be surprised in how short an amount of time. Securing a loan primarily will depend on three questions. One, what was your credit history prior to bankruptcy? Two, what was the cause? And three, how have your finances been handled since? If your credit was good before the bankruptcy, if the bankruptcy was caused by unforeseen circumstances and if you're paying your bills on time, then you probably can get a loan within two years.

S.D.: It's easy. You just reestablish your credit. You go out and get a loan, buy a car, you just probably live during those 24 months.

M.H.: In the case of foreclosures, when your house goes back to the lender, that presents a bigger problem. But once again the key is to reestablish your credit and pay everything on time. The waiting period after a foreclosure is normally three years. Past credit problems don't necessarily mean future credit problems. Even with a bankruptcy in your past, most lenders will try to work with you. What they want to see is that you're up on your feet and trying to correct any problems.

 

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Episode 40 1996 - 97 Season

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