Unfortunately, many people are familiar with this process. Due to changes in living conditions, such as job loss or divorce, many people are no longer able to meet their financial obligations sufficiently and have to file for personal bankruptcy. If insolvency proceedings are opened, the debtor goes into a six-year conduct of good conduct, in which he is obliged to transfer all attachable income to the creditors, to start all reasonable activities that enable him to repay the debt and to supply all attachable items without exception to the bankruptcy estate.
During the six-year conduct of good behavior, the debtor’s income is only available until the absolute subsistence level is reached; all other income is used without exception to repay the debt. If the debtor does not disclose income or existing capital or valuables, he faces criminal proceedings for fraud. If a debtor behaves appropriately during the six-year conduct of conduct and transfers all income above the subsistence level to the creditors without exception, then after this phase the exemption from residual debt can be applied for. As a rule, this is granted to the debtors, provided that all the requirements have been met in the conduct of a good behavior phase.
Loans despite personal bankruptcy
For a debtor who has been forced to file for personal bankruptcy, it may be difficult to obtain a loan from a bank or savings bank. After all, all existing attachable income has already been fully allocated to the creditors, and, in addition, all attachable assets have been released and distributed to the creditors. A bank or savings bank would, therefore, have no collateral in the event of the debtor becoming insolvent again. In a regular way, a debtor will not be able to get a loan. Very few banks are willing to grant a loan despite personal bankruptcy. Here, the debtor must above all make sure to truthfully state his financial situation. A false statement in a loan application is nothing more than fraud, which will be punished if it is discovered.
If the debtor has found a financial institution that gives him a loan despite personal bankruptcy and has given his financial situation truthfully, he should make sure that he does not violate any principles of the private bankruptcy regulations. In the event of a violation of the rules, the residual debt exemption customary in insolvency proceedings is no longer applicable and the debtor must transfer the entire amount owed to the creditors and without having to be able to register private bankruptcy again. A new personal bankruptcy is only possible another ten years after the completion of the first procedure. For this reason alone, it is questionable whether a debtor should take out another loan despite personal bankruptcy.
Banks that grant loans despite personal bankruptcy
The usual banks and savings banks will certainly not grant a loan to a person in a personal bankruptcy procedure. On the other hand, some banks advertise on the Internet that they will not reject anyone and also grant loans despite personal bankruptcy. With such offers, caution is primarily required. Often, such advertisements do not hide credit institutions but intermediaries, who often charge horrendous fees for their intermediation.
These fees are payable even if no loan agreement could be brokered because the credit institutions have all rejected the insolvent debtor. Then the already over-indebted person also remains sitting on the high agency fees and the mountain of debt gets bigger instead of smaller. At banks that grant loans despite personal bankruptcy, you should definitely read the small print extensively, often hiding clauses about hefty additional payments and horrendous fees.
Loans despite personal bankruptcy
The only way to get a loan in spite of personal bankruptcy from a regular bank or savings bank is usually to provide a guarantor when filing personal bankruptcy. Of course, this must not be in a private bankruptcy procedure and must have sufficient collateral. With a wealthy and trustworthy guarantor, some of the usual credit institutions are usually ready to grant a loan again despite personal bankruptcy.