Can You Get a Loan After a Bankruptcy?

Understanding how a bankruptcy can affect your ability to qualify for credit is vital. The proceeding remains on your credit report for seven to ten years and can dramatically affect your ability to qualify for credit cards and unsecured personal loans.

Especially in these financially uncertain times, you may be considering bankruptcy as an option to resolve financial commitments and start over.
As with any concerns towards financial health, you may be wondering how a bankruptcy proceeding could affect your ability to qualify for future loans and credit. The good news is, you may qualify again … eventually.

How Long a Bankruptcy Stays on Your Credit Report

As you might expect, bankruptcy dramatically affects your credit score. A bankruptcy case remains on your credit report for seven to ten years.

As a recent US News and World Report story outlines, “Discharging debt can help you start anew, but it doesn’t wash away the months or years of financial issues, such as missed loan payments and out-of-control balances.”

It’s important to consider your personal financial goals following bankruptcy. It is possible to get an unsecured personal loan after bankruptcy, but you may be looking at significantly unfavorable terms. Considering buying a home or a car? A bankruptcy could put off those plans due to difficult new loan terms you’ll face.

Federal Student Loan Eligibility Following a Bankruptcy

For most federal student loans, creditworthiness isn’t looked at. Instead, various servicers and agencies look at general financial needs. So, theoretically, you could qualify for new student loans if you meet all of the other criteria for the loan. Certain anti-discrimination rules within US bankruptcy code also support lending those who have either been through personal or business-related bankruptcy.

Private Student Loan Eligibility Following a Bankruptcy

Since private student loans are just like any other general personal loan issued by a private bank, those with a recent bankruptcy on their record will likely not qualify for a private student loan.

How You Can Rebuild Credit Following a Bankruptcy

The first option is to consider having someone with good credit co-sign any new loans or credit cards you apply for. There may be additional options if you do not have a co-signer, including putting up collateral towards the loan.

According to Lending Tree, another option would be a “credit builder” loan, which is often secured by the proceeds of the loan itself. If you can make your payments on time, you can work towards rebuilding your credit through the interest and other fees these loans typically charge.

You could also look into a secured credit card that requires a security deposit to help rebuild credit. That deposit is equal to your credit limit and if you make payments each month, you’ll begin rebuilding credit in a reliable and responsible manner.


Above all, it’s important to consider how a bankruptcy will affect your whole financial plan once the proceeding has ended and all debts have been settled. The qualified bankruptcy attorneys at Natural State Law are effective advisors in the Little Rock area. Call us at (501) 916-2878 to discuss how we can guide you through the bankruptcy process.