The author, a law professor, found that lenders, and especially credit card companies, send more offers to people who have filed for bankruptcy, than to people who haven’t.
Lenders send more offers to people who have filed for bankruptcy, than to people who haven’t.
This makes it easier to get credit after bankruptcy.
This proves an effect that I have observed for quite some time.
What happens a month after bankruptcy?
One month after filing for bankruptcy, I make sure to ask my clients if any of them have received pre-approved credit card offers.
Here’s what I usually see:
- More than half of them have received the offers, and this is in the first month
- Many of the offers specifically reference the bankruptcy filing (which is public record)
- The lender knows about the bankruptcy, and wants to offer new credit even though the person just filed for bankruptcy
Why do credit card companies send so many offers so soon?
At first glance this might seem counter-intuitive, but remember:
- Lenders make money by lending out money
- People who have just filed for bankruptcy are likely to be able to repay new loans, because the bankruptcy discharged all of the old loans
- Lenders also try to charge higher interest or other fees to profit off of people who have just filed for bankruptcy
What does this mean for someone thinking about filing a bankruptcy?
That lenders do not care that you have filed for bankruptcy. They have an incentive to make new loans, so they will make them whether or not you have filed a case.
You should not be afraid about being unable to obtain credit after filing the case. You should also realize that you don’t need to feel stigmatized for filing the bankruptcy, since the lenders expect you to do it.
In fact, many of them charge so much in interest and fees that they force honest people into filing for bankruptcy.
WHAT TO DO NEXT
If you’re worried that you won’t be able to get credit after filing Chapter 7 Bankruptcy or Chapter 13 Bankruptcy in Minnesota, then why not not speak to us now at 612.824.4357?
We’ll give you all the help and advice you need.
We’re looking forward to helping you.
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