BANKRUPTCY- STOP FORECLOSURE-LOAN MODIFICATION-DEBT SETTLEMENT
90 Washington St.
Long Branch NJ 07740
Credit After Bankruptcy – FAQ’S
The single question my clients ask most often is “What happens to my credit when I file bankruptcy?” Many believe that filing a bankruptcy ruins your credit for ten years.
Nothing could be further from the truth!
Essentially, your bankruptcy can act as the end point of your bad credit and the beginning of a “fresh start” with good credit.
What Is The Impact Of Filing A Bankruptcy On My Credit?
Most people already have serious credit problems before they file a bankruptcy. Late payments, lawsuits and judgments cause significant damage to your credit. For the overwhelming majority of my clients, the damage to their credit is already done.
Once your bankruptcy is completed, your credit score should gradually improve if you use your new credit intelligently, and remain current on your post-bankruptcy obligations such as car payments and mortgage or rent payments.
Don’t be frightened by advertisers who try to scare you away from filing bankruptcy with the myth that your credit will be ruined for ten years.
What Kinds Of Credit Are Available After A Bankruptcy?
Various forms of credit are available after bankruptcy, including unsecured credit cards, secured credit cards, automobile financing and home financing.
When Will I Be Able To Get A Credit Card?
You may receive applications for credit from the very same creditors that you discharged in bankruptcy, often within six months of your discharge.
Many of my clients obtain credit cards within 6-12 months after their bankruptcy is discharged. Some of them report that they receive new credit applications from the very same creditors they are discharging while they are still in bankruptcy!
In addition to unsecured credit cards, secured credit cards are available immediately after your bankruptcy is over.
Why Is Credit Available After A Bankruptcy?
A typical Chapter 7 Bankruptcy takes approximately three and a half months from the time the petition is filed until your debts are discharged. Once your debts are discharged, you have a much lower debt load. In addition, you cannot discharge your new debts in a Chapter 7 for eight years from the date you filed. So, even though you filed a Chapter 7 Bankruptcy, some creditors view you as a good credit risk and make credit available.