Bankruptcy lenders are banks, credit unions, or other financial institutions, comfortable with approving loans for people who have completed bankruptcy, or are in the process of doing so. Chapter 13 bankruptcy, one of the most popular forms of personal bankruptcy, allows debtors to take on new credit with permission of the bankruptcy court. The flexibility is necessary, because Chapter 13 takes three to five years to complete, during which time the debtor must adhere to a court-supervised budget.
How to Find a Bankruptcy Lender
1 Contact a credit counselor approved by the U.S. Department of Housing and Urban Development. Check the HUD website for a counselor in your area, or obtain a referral by calling a local charity, such as the Salvation Army or National Urban League. Ask the counselor for a list of local or national lenders willing to loan money to people with a bankruptcy on their credit report.
2 Search for other lenders on your own, if necessary: For auto financing, call local dealerships and ask for the credit department. Simply tell the representative that you have a bankruptcy on your credit report and would like to buy a car on credit. The dealership may not offer a list of bankruptcy lenders over the telephone, but will tell you if it can arrange financing for people in your situation.
3 Ask a local real estate agent for a list of mortgage companies, willing to finance borrowers with bankruptcy issues, or seek referrals by calling local mortgage companies and explaining your situation.
4 Repeat the process with your bank or credit union: Ask to speak to a loan officer and describe your needs. Ask if the bank has any lending programs for people who have filed for bankruptcy, or are currently in bankruptcy. The bank may have secured loan programs that are available to you. Secured loans and credit cards require you to deposit money into a savings account for collateral, making approval easier. Secured loans are a good option for people trying to rebuild their credit after bankruptcy.
5 Call other banks and credit unions to complete your list. If the bank cannot help you, ask the loan officer to recommend other lenders who might be of help, then follow up on the referrals.
These 5 easy steps should help you to find a bankruptcy lender.