How Chapter 7 Discharge Affects Interest Rates ?
Bankruptcy is quite a common term as well as practice in the United States but still there are several misconceptions among people when it comes to discharge affecting the credit or the interest rates. Chapter 7 is the most common form of bankruptcy filed. Chapter 7 has quite different effect on credit of people as compared to other Chapters such as Chapter 13. |
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As far as the Chapter 7 discharge and its effect on interest rates or credits are concerned, it is normally referred to as a fresh beginning. The very first thing that one must keep in mind is that after the discharge of this Chapter, one is essentially debt free which is a good thing in the eyes of creditors. This provides a fresh start to the debtors. Another such factor looked upon by the creditors is the fact that the debtor would not be able to discharge their debts with them once again for a minimum of 8 years.
The bankruptcy attorney would advise the individuals that just after the discharge, they must start receiving some secured credit card offers even with the small limits and in some cases rather high interest rates. These would undoubtedly have high annual fee. One must open accounts with minimum of two secured credit cards but then not use and keep them over. The lawyers will not really help people get an idea about the eligibility for the mortgage after filing but this can be sorted after consulting a legal expert.
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An amended law enacted in the year 2005 place certain strict limits on the debtors applying for bankruptcy. Debtors who have already filed a bankruptcy petition need to wait for another 8 years for filing bankruptcy once again. The waiting period can be different depending upon the fact whether Chapter 7 was filed before or Chapter 13.