2-Year Rule after Bankruptcy

Discussion in 'General Lounge' started by Tightwad, Mar 25, 2012.

  1. Tightwad

    Tightwad Member

    I often hear no creditor will give you a loan for 2 years after a Bankruptcy. In my experience this is not absolutely true.

    In the Spring of 2004 (Almost exactly 1 year after my Chapter 7 was discharged) I applied for a loan on a new car through Ford Motor Credit and received a loan at 9.9% for 3 years. The secret? I chose a lower cost year old model that was being discounted 30% and payed 20% down so the FMC was only financing 50% of MSRP. Combined with the quick repayment schedule I believe it minimized any chance FMC would end up loosing money in the event I defaulted.

    Not saying this would work for everyone but it worked for me.
  2. Desdemona

    Desdemona Well-Known Member

    Hi Tightwad

    Congrats on getting a vehicle and working the financing to your advantage, well done. I just don't want to scare folks on the two year rule; that pertains to mortgages not necessarily installment loans like vehicles. I was discharged 3.12.11 and financed a 2011 Chevy Cruze on 3.17.2011, there is life after BK - it's the BK lessons learned that need to be practiced in that post-BK life.

    It’s a two year minimum for a new mortgage IF you did not BK a prior mortgage, its three years if you BK a prior mortgage starting from the date of removal of your name from title. Of course this is FHA financing and everyone’s situations are different; but with good solid credit sense and little patience it is possible to move on from a BK.
    Last edited: Mar 26, 2012
  3. Tightwad

    Tightwad Member

    Sorry Desdemona if Im guilty of spreading disinformation. I was often told that other than preapproved credit card applications (which you would receive by subscribing to certain magazines) that it would be tough to get credit at any reasonable interest rate for the first two years after a Bankruptcy. Sorry if I was misinformed.
  4. Heather L

    Heather L Well-Known Member

    My friend had a Chapter 7 BK discharged February 2011, and a few months after she applied for a Capital One secure card with a limit of $200. After using that card responsibly for about 6 months she applied for another Capital One card that was not secured and they gave her a card with a $2000 limit. You would be surprised how quickly you can rebound from a BK. Thanks! Heather with BoostMyScore.NET

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