Arizona residents struggling with debt from increasing bills may be hesitant to face the stigma associated with filing for either Chapter 7 or Chapter 13 bankruptcy. Such people commonly fear future rejections for financial services such as credit cards or checking accounts.
However, Arizona residents may not be aware that more than 1.4 million Americans filed for bankruptcy in 2011, amid difficult economic conditions. Four out of five bankruptcies were caused by events beyond the control of filers, according to research conducted by Texas A&M University. Medical debt played an important role in bankruptcies, with more than half of them involving debt of more than $5,000.
The good news is that lenders are aware that a bankruptcy does not truly reflect the filer's management of finances.
Contrary to myths, bankruptcy filers can rebuild their financial lives. For lenders, a filer becomes much less risky after their bankruptcy discharge because they are barred from getting bankruptcy protection again soon after the discharge.
More good news is available to Arizona residents--it is possible to apply for credit cards after bankruptcy proceedings. Those who have had trouble managing credit cards may want to seek credit counseling before applying for cards, but some banks do offer low annual fees for an unsecured credit card. Other banks allow borrowers to deposit a low security amount and a low annual fee and they offer a facility to reimburse their deposit if the borrower manages their account sensibly.
For those borrowers who have a strained relationship with financial institutions, other options may be available. For example, some financial institutions offer reloadable prepaid cards with low monthly service fees and a bill payment service. If users of the reloadable cards demonstrate that their budgeting habits have changed, they may become eligible for credit cards with higher credit limits.
Arizona residents considering filing for personal bankruptcy should be aware that it can alleviate the financial burdens they are facing and that a person can be financially successful after bankruptcy.
Source: Fox Business, "Best credit cards after bankruptcy," Curtis Arnold, April 9, 2012