How to Establish Credit After Chapter 13

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Establishing credit after Chapter 13 bankruptcy requires putting up cash assets for collateral until creditors begin to extend loans again. Understand that bankruptcy will cause credit problems for 10 years with insight from a registered financial consultant in this free video on bankruptcy.

Part of the Video Series: Money Management
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Video Transcript

This is financial adviser Patrick Munro talking about how to establish credit after chapter 13. Well chapter 13 really means chapter 13 bankruptcy and if an individual was to go bankrupt, which is a term that they can no longer pay their bills and as a result a debtor in possession is called in to take over everything that this individual has relative to credit, creditors will be paid out with the remaining assets that the individual has. If you had debts of a million dollars and only assets of twenty thousand dollars and you had ten creditors, basically depending on the strength of each one of those creditors, they receive pennies on the dollar. After your money is all gone, then the... and paid your legal fees of course, the lawyer would then send of letter and everything would be discharged, then there's a ten year period that takes place where your credit is really quite not good if you will. There are ways for you to establish credit after chapter 13 and involve putting up cash assets as you come into cash for collateral and eventually creditors will begin to extend loans to you again. It's a long a drawn out process. Try to avoid chapter 13 at all costs. This is Patrick Munro talking about how to establish credit after chapter 13.

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