Once personal bankruptcy has occurred, all chances of getting a loan usually fizzle out. Banks, of course, tend to reject private bankers, after all, these people no longer have any creditworthiness. Due to personal bankruptcy, the creditworthiness must be evaluated at the lowest possible value, which is why further lending is not possible.
Loan for private insolvency
To make matters worse, the behavioral phase, in which the private insolvent undertakes not to incur any further debts for the next six years, while parts of the income are automatically ceded to settle outstanding debts. A loan for private insolvency is only possible, if at all, in connection with a guarantee, because then the guarantor through his assets and income ultimately provides the necessary security that the actual borrower cannot provide due to personal insolvency.
The most common way to obtain credit for private insolvencies is through contact with private individuals, by brokering a loan between a private lender and a private borrower. In these cases, the creditworthiness of the borrower plays a subordinate role, especially if the borrower is in a very good relationship with the lender. In this case, personal preferences and the previous history of each other decide whether to grant or refuse the desired loan.
Question the need for credit
Before the loan for private insolvencies is applied for in the first place, the person concerned should question the necessity of the loan in any case. Not only does he possibly violate the conduct of good behavior phase, he may also go into the next spiral of debt before the actual debts that led to the bankruptcy have even been completely paid. The credit for private bankruptcies is therefore always a double-edged sword, because there are some reasons to take out a loan during a bankruptcy.
Due to the compulsory levies on creditors, with which outstanding debts are paid or at least partly paid off, private insolvencies have hardly any financial means to actually “live”. Often, the remaining money is just enough to survive by covering rental costs and basic food. Energy costs and ancillary costs must of course still be covered, but almost all other components of the income are seized.
The borrower would definitely take a new risk by taking out a loan, which can only be justified if taking out the loan would actually have a positive effect on the borrower’s financial situation in the medium and long term. Since these loans are often taken out privately, since even with a guarantor the bank can still be rejected, they are often limited to small amounts.