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Life After Bankruptcy

Life after bankruptcy may be challenging, and there are some important things to remember as you begin to move on. Keep reading to learn more.

Credit After Bankruptcy

One of the main aftereffects of bankruptcy is a lower credit score. While bankruptcy doesn’t obliterate credit, it will lower your credit quite a bit. However, while your credit score may be lower, you can still apply for a secured credit card to help you pay for expenses.

Most credit cards will be out of reach until you can rebuild your credit score, but secured credit cards require a safety deposit in exchange for a credit line. In other words, if you pay a deposit of $1,000, you can access a credit line for the same amount.

Mortgages, Loans, and More

Once you start working on your credit score, you may qualify for some loans. Traditional loans and mortgages are difficult to get for a few years after bankruptcy, but if you can prove that you are diligently working to improve your credit, you’ll be able to qualify for a loan in no time.

Until you can qualify for a loan or mortgage, renting may be the best option for finding a new residence. Most apartment complexes won’t accept a potential resident without good credit unless you can provide several months of rent upfront. Before you attempt to rent an apartment, be sure that you have enough money set aside to cover the down payment. Some renters use a rent support service to help you use your rental payments to build up your credit quicker.

Job Searching

Bankruptcy won’t disrupt the job search unless you’re applying for a financial position. If you’re an aspiring fiduciary, accountant, or investor, bankruptcy could seriously hamper your employment efforts.

Nearly every employer nowadays performs a background check on applicants. While many positions don’t require a search of your financial history, some employers may view bankruptcy as a red flag even outside the finance world. That said, preparing responses to inquiries from employers if they ask about your past money problems is a must. If issues beyond your control contributed to your situation, the hiring manager would likely be forgiving.

Always research a position ahead of time to see what the company looks for in a candidate, in addition to what they search for in a background check. Financial positions, in particular, will have preferences regarding financial history, so study up before you apply!


Starting a business is challenging at the best of times, but if you’ve filed for bankruptcy in the past few years, getting your idea off the ground may be challenging to say the least. Business loans and lenders are particularly picky when it comes to investments. Lenders are unlikely to offer you a business loan or investment for several years after completing your bankruptcy case.

Some creditors boast open-minded lending practices, but be aware that these lenders offer sub-prime loans that are collateralized. This means that in exchange for the funding, you have to put your car or house on the line as collateral if things go wrong. These loans are high-risk, so it’s best to avoid them if possible.

The Bottom Line

The most important thing to remember is that life after bankruptcy won’t be difficult forever. You will be able to recover and move on from hard times. With the proper guidance, you can find yourself in better standing sooner than you think and on your way toward financial security.