Filing for bankruptcy can make it hard for a consumer to reestablish and obtain what.

Question: Filing for bankruptcy can make it hard for a consumer to reestablish and obtain what.

Answer: The correct answer to this question is: Credit

Applying for bankruptcy hinders the consumer with the capacity to reconstruct as well as attain credit. This is because for instance bankruptcy is a severe issue in financial activity and the record stays on the credit report for a long time; usually, it is about 7-10 years depending on the type of bankruptcy.

In particular, when the consumer has filed for bankruptcy, the sign is initially taken by potential lenders as a message of bad credit history which the customer had in the past. This makes the lenders to be reluctant to advance new credit as they feel that they will be more likely to lose their money. For instance, when a person with bankruptcy concerns tries to get a credit card, he/she will be offered the credit card with less favourable terms as compared to the applicants with no blotches on their credit history. Also, securing a mortgage or an auto loan becomes even more difficult and usually costly. A person who has declared personal bankruptcy might not be able to get home financing for many years and when they do, the rates would be very high or else they would receive high interest rates mortgage loans. In the workplace, there are employers, especially in financial institutions who are likely to reject anyone with a bankruptcy on their credit profile thus adding pressure on the individual to repay his/her debts. But let it be mentioned that although bankruptcy is detrimental when it comes to credit, the latter is by no means an absolute impossibility. As the consumer goes on to make further payments on all the credit accounts on time and provides evidence of responsible handling of any new credit and other aspects that are reflective of creditworthiness, the score can then be rebuilt. Another advantage of bankruptcy is that in many cases people can get a secured credit card or a small loan in the course of one or two years after bankruptcy which can be regarded as a start to rebuild credit situation.