- Cash loans for ex-bankrupts are possible
- Get discharged from bankruptcy before applying for a loan
- Keep accurate records of your finances for future lenders
- Enlist the services of a financial planner for a budget strategy
Bankruptcy can be a tough financial setback. Recovering from bankruptcy can be challenging, and for most people it begs the question, where do I start? Luckily, there are many options out there for people trying to get their finances back on track.
A new cash loan can help relieve financial stresses and help put you on the right track to recovery faster. Paying off a cash loan proves to lenders and financial institutions that you can be financially independent again.
Find out more and apply for a cash loan today with Club Money.
What happens next?
After you’ve declared bankruptcy, you get a clean slate. You’re released from all financial debts you owe. A trustee will be appointed to you, and they’ll help you manage your finances. They will set up a strategy for paying back creditors when funds become available.
During bankruptcy, you must report your financial situation to your trustee. This reporting includes sharing bank statements and other financial documents. Any sources of income will also have to be shared with your creditor.
Once you start earning over a set amount you will be legally required to make payments to your trustee. These payments will contribute to paying off debts for items such as child support, HECs, court penalties, and home mortgages.
Getting discharged from bankruptcy
Before you can apply for a loan, you need to be discharged from all debts. In most cases, you are discharged three years after the date you applied for bankruptcy.
Your bankruptcy stays listed on credit reporting agency records for a period of time. It could be two years from the date you are discharged or five years from the day you declared bankruptcy, whichever one comes later.
For any future loan application, it will be a legal requirement for you to disclose your bankruptcy when the loan is over a certain amount. The current threshold for disclosing your bankruptcy is $5,447. So for any loa nyou apply for under this amount, there is less chance of you facing scrutiny from lenders over your past bankruptcy.
Proof of financial stability
When you apply for a loan, financial institutions will look for any proof of financial stability on your end. Showing proof of good banking practice can help you get loan approval. This may include things such as:
- Regular deposits and no overdrawn amounts.
- Bank statements summarise your banking activity, proving that you can be financially responsible.
- Other items that lenders may look for are employment income sources.
- A good mortgage or rental reference.
A steady income will contribute positively to the argument that you’ll be able to make regular payments.
Getting the right advice
Before you apply for a loan, it helps getting the right advice to help guide you along the way. A good financial planner will help you put together a plan for saving money and paying off debts.
One key factor your financial planner should inform you about is the effect of interest rates on your cash loan. The unpredictable nature of interest rates can affect how much you can borrow.
The value of interest rates can change every month according to the reserve bank of Australia. Your financial planner should encourage you to budget for paying a higher interest rate so you can be prepared.
Loans you can apply for
There are specialist lenders who are willing to offer you a cash loan even if you’ve declared bankruptcy. Lenders usually offer stricter terms and conditions due to your discharged status. You may end up paying a large deposit of up to 20% of the loan amount.
The rates of your loan could also vary depending on past circumstances of your bankruptcy. The amount of time between your discharge and loan application can also influence your lender’s offer.
Start looking today
Getting bankrupt doesn’t spell the end for your financial security. There are many options out there for getting yourself back on track. There are lenders out there willing to provide cash loans for ex-bankrupts.
So why not get started today? Confirm your discharged status with your trustee, seek financial advise from qualified professionals and start maintaining financial records to show you can save responsibly. Once you’re in control of your finances, you’ll find it easier to shop around and find a loan and lender that’s right for you.