New York residents who have recently filed for bankruptcy protection may want to know what to expect in the future as far as being able to obtain a new credit card. The answer will often depend on a person’s credit rating. Lenders, including credit card companies as well as banks and other financial institutions, rely on credit scores to determine a borrower’s eligibility and the terms that would apply should credit be granted, including the applicable interest rate.
The best way for a person to determine where they stand in being able to secure new financing is to check their credit score, something that is easy to do online. Credit scores range from 300 to 850. A person who has filed bankruptcy in the past several years will most likely score in the lower range. However, other factors weigh heavily, such as the timeliness of payments and collection activities.
In some cases, a lender may view a person’s credit report in a more favorable light after a Chapter 7 bankruptcy filing because many of the person’s debts have been discharged. Where there is a history of late payments or missed payments, though, credit card companies are likely to require a cash security deposit. Obtaining an unsecured credit card following bankruptcy usually requires waiting for a while and making sure that other payments are made in a timely fashion.
Filing for bankruptcy protection has its pros and cons. Sometimes, though, a person’s debts have accumulated to the point that the person is no longer able to meet their financial obligations. In such cases, their best hope may be to file for bankruptcy protection. Anyone facing such circumstances may want to seek the advice of an attorney who has experience in debt relief options.
Source: FOX Business, “Credit Card Life After Bankruptcy”, Erica Sandberg, August 21, 2014