Clients always tell me that the biggest fear they have when considering filing for bankruptcy is they will never be approved for credit, again. Whether it be buying a home, a car, or something as simple as opening a new credit card account. The good news is a bankruptcy case gives you a clean financial slate. On-time payments and careful use of a secured card or loan are key to rebuilding credit after filing bankruptcy.
The answer is: YES. You will be approved for credit cards after you file bankruptcy. You heard it here.
Many clients have a higher credit score a year after filing bankruptcy than before filing because they stop fighting an impossible battle against insurmountable debt and can begin rebuilding their credit.
A Chapter 7 bankruptcy case stays on a credit report for up to ten years, while a Chapter 13 bankruptcy case will remain on your credit report for up to seven years. This does not mean you have to wait seven to ten years before applying for a credit card. In fact, a number of financial institutions will approve consumers for credit cards shortly after finishing a bankruptcy case.
There is life after bankruptcy. Many of our clients find success in starting off with a secured credit card with a small balance. Secured credit cards require you to put down a cash deposit before using the card. You are then limited by that deposit in terms of the credit card balance. There are also unsecured credit cards that accept applicants with a low credit rating and do not require you to put down a security deposit to open a credit card account. Most of our clients receive credit card offers within 6 months. However, pay close attention to one-time and recurring fees as well as the interest rate and other APRs. Make sure you research a credit card’s terms and conditions to know what is needed to be approved for credit.
The effect a bankruptcy case will have on your credit score will also diminish over time. The more time that passes from when the bankruptcy discharge is issued, the less of an effect the bankruptcy filing will have on your credit. If you can show that you have been utilizing credit wisely, sticking to a budget, and paying your bills on time, the better your credit score will be.
You should keep a close eye on your credit score after completing a bankruptcy case. Payment history is the single biggest factor in determining your credit score. When you make a credit card payment on time, you add new, and positive information to your credit reports on TransUnion, Equifax, and Experian.
Bankruptcy is a fact of life in today’s economy. The age-old stigma that bankruptcy is a bad thing and only for the financial irresponsible is no longer. If you have questions on this topic or are struggling with debt, call our law firm today to schedule a free consultation.
To date, The Benenati Law Firm has eliminated nearly a billion dollars of debt for its bankruptcy clients. Our firm is the largest filer of consumer bankruptcy cases in the nation. Go to https://www.407bankrupt.com/ or call 407-777-7777. Because Life Has a Restart Button.