Things You'll Need:
- Discharge paperwork
-
Step 1
Complete a loan application for a line of credit. In this application specify what type of bankruptcy you had declared and its current status. Most lenders will require that a Chapter 7 bankruptcy have been discharged for two years prior to approving a loan and one year for a Chapter 13 bankruptcy.
-
Step 2
Provide the discharge paperwork from the courts that proves your debts are cleared when applying for a loan. Copies of this paperwork will be provided once the court has settled your bankruptcy filing with all creditors. Only notarized copies will be accepted by lenders.
-
Step 3
Provide nontraditional sources of credit when applying for a loan. Nontraditional sources of credit include: rental payments, utility payments and cell phone payments.
-
Step 4
Provide sources of liquidity or collateral. Most lenders will require assurance that the debt will be repaid. When re-establishing credit after bankruptcy, it is wise to have a large sum of cash on hand that can be used to show collateral on a loan that you are applying for. If that is impossible, some lenders will also look at 401(k) accounts or IRA accounts as collateral sources for loan approval.
-
Step 5
Be honest with the lender about your financial situation. Re-establishing credit lines after bankruptcy can be challenging, but many lenders are willing to give you a second chance to prove that you have learned your lesson and have the means in which to repay debts in a timely manner.
