Bankruptcy and Your Credit

What Happens to Your Credit After You File Bankruptcy?

Many people who file bankruptcy are worried about what will happen to their credit. They've heard rumors that they won't be able get credit for ten years after you filing bankruptcy.

Your credit probably wasn't strong when you filed bankruptcy, so naturally, when you've just filed bankruptcy, your credit won't instantly become be strong.

Here's what you can realistically expect after your bankruptcy discharge:

  • Some creditors will likely flood you with offers of low-balance credit cards to help you "rebuild" your credit after bankruptcy. Unfortunately, many of these offers come with abusive fees that will push you near your credit limit before you've ever used the card, putting you right back in debt. Be Careful. Choose your new credit accounts with care. Reputable lenders will give you a chance to re-establish credit after you bankruptcy.
  • Immediately after bankruptcy, you won't be able to qualify for most conventional mortgages or car loans. For most people who file bankruptcy and then resume paying all their bills on time, conventional loans at normal interest rates will be within reach within 2 to 3 years after discharge. It's not a immediate cure, but it's much quicker than the ten years many people have been led to expect.
  • You will need to rebuild your credit by paying all your ongoing bills on a timely basis. If you don't pay your bills on time, you can't expect to rebuild your credit.

If you're like most people, not much will change right after your discharge. Your credit was probably weak before you filed bankruptcy, and it will be weak immediately after. However, without your old bills holding you back, you'll have a "fresh start" -a chance to start to rebuild your credit. If you begin paying all your bill on time, your credit can be stronger than it was before you filed.

Contact us for a Free Consultation with an experienced Bankruptcy Attorney.

Attorney David L. Davitt has over 25 years of experience in Bankruptcy cases.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.