Quick question.....what happens (legally, practically)when you have a non-discharged bankruptcy on your record?
I'm guessing that even the riskiest of lenders would not take a chance on someone with a non-discharged bankruptcy - (would THEY have any recourse if they did loan money to someone in that situation?)
Thanks for your time.....
Legally there's no bar to anyone lending you more money. Practically, you would think that the bk filing along with all other old debt should serve as a market bar for cc lenders extending more credit, though who knows if the more aggressive ones might not still solicit balance transfers. The creditor's recourse for collection would be wage garnishments though they may end up competing with other creditors for that.
I think the more likely scenario would be, if the debtors sought more credit, would be through the new pay day lending networks set up by the major CC lenders under different names. They use post-dated checks, direct access to debtor's bank accounts, and threat of criminal prosecution for a bad check if there are insufficient funds in the account. I am told the pay day lenders fees and rates dwarf regular CC fees and rates though I wonder how that could be possible.
Whether the debtor seeks more credit from payday lenders or not, the prior creditors will ultimately get judgments and start garnishing wages (in my state up to 25% of the check). With default fees and penalties and attorney's fees and costs, these people will most likely never be able to payoff the principal of their indebtedness and that is why I describe them as trapped and not functioning at an optimum level.