The requirements for an instant loan despite personal bankruptcy are extremely difficult. Important differences in credit opportunities already exist due to the status of the procedure. The criteria for loans in the course of the procedure differ from those for a completed procedure.
Instant loan despite personal bankruptcy – chance for a quick new start
A positive current law change gives courage to everyone who is currently going through the bankruptcy proceedings. In mid-May 2013, the Bundestag decided to change the bankruptcy law. The early discharge of residual debt, already after 3 years of behavior, will probably be possible from July 1, 2014. An instant loan despite personal bankruptcy could be more in demand than ever before. The legislature has created a major hurdle for the shortening.
At least 35 percent of the liabilities of the bankruptcy proceedings must be repaid so that the reduction can be requested. Consumer advocates are already criticizing this hurdle as too high for many insolvent households. Nevertheless, it should not be overlooked that halving the time brings tangible benefits that are worth fighting for.
Financing restrictions through personal bankruptcy
The chances of making an instant loan eligible despite personal bankruptcy are extremely slim. Normal commercial banks are excluded from the loan search. The negative private credit checker automatically leads to the loan being rejected. The situation is similar with all other “normal” sources of finance. It is also not advisable not to disclose personal bankruptcy in order to gain access to credit.
The bankruptcy must be communicated to the potential lender with each loan request. The legislature goes even further. Even if bankruptcy is not asked for in the loan application, it must still be named, unmistakably and without delay.
Anyone who does not abide by it runs the risk of a credit fraud procedure and thus a prison sentence of up to five years. Even in the case of approval, a loan is not without problems. If something goes wrong with the repayment, this is an appropriate reason to refuse to discharge the remaining debt.
Credit opportunities despite bankruptcy
The few remaining credit opportunities are limited to financial service providers and personal loans. The main creditor could be added in the future due to the change in the law. He is most interested in achieving the highest possible repayment rate. A loan granted would flow back into his pocket, at least for the most part. The new loan would not be covered by the debt relief. His chances are, therefore, that at least the new loan will be paid in full.
The instant loan despite personal bankruptcy from the credit intermediary is also not a matter of course. If there are any opportunities at all, then only through a solvent guarantor or co-applicant. If successful, the credit volume would still be extremely limited. This sum is probably not enough for large investments. It looks similarly problematic for personal loans. Not every platform allows access, and hardly any investors are willing to take such a high risk.