Bankruptcy Credit Card

     Bankruptcy credit card refers to how a debtor obtains a credit card during or immediately after a bankruptcy filing.  How to obtain post-filing bankruptcy credit should be something the filer is thinking about.  The filer’s credit record reports the bankruptcy filing for either 7 or 10 years depending on the bankruptcy form, ten years if it’s Chapter 7 bankruptcy and for seven years if it’s Chapter 13 bankruptcy.  Obtaining credit may not be as easy as it was, but it is not impossible.  There are many companies and institutions that service the bad-credit risk segment of the market.

Getting a Post Bankruptcy Credit Card

      One of the first priorities the filer should have is to rebuild his credit after a bankruptcy filing.  The filer has to prove that he is creditworthy.  Obtaining a post bankruptcy credit card for the first time after a bankruptcy will be the hardest.  The best way to establish credit is to take out a small post bankruptcy loan or get a post bankruptcy credit card.  You will probably have to maintain a good faith balance to guarantee the loan and you may have a higher interest rate and lower limit on the credit card, but you will be establishing yourself as credit worthy.  Once you have a post bankruptcy credit card, make sure you establish yourself as a good customer.  Pay off the balance every month if possible.  If not, don’t be late paying.  You don’t want to put yourself in the same situation that led to your bankruptcy filing.
 
     Once the filer establishes credit and his own credit worthiness in the post bankruptcy period, it will be easier to obtain subsequent credit.  The further out you get from the date of filing, the less interested the creditor is in the bankruptcy and the more interested he is in the present financial and credit situation.  A year-and-a half to two years later, they may be treated no differently than non-filers.

Where to Get a Post Bankruptcy Credit Card

     There are many banks and loan companies that have made their market niche servicing people who have filed for bankruptcy.  The filer should look for one to help him re-establish credit. There may be less favorable terms, like money secured in an account as a guarantee of payment, a lower credit limit, or higher interest, but this helps the filer to build a clean credit history.  A creditor cannot discriminate solely on the basis of a bankruptcy.  There are many bad credit lenders.  Make sure the lender you choose is reputable before you deal with them.

The debtor must be sure to check his/her credit reports after a bankruptcy filing.  Sometimes there is a time lag in the information.   You don’t want any discharged debts showing up as current outstanding debts.  You want your post-filing credit report to look as clean as possible, especially for that first post bankruptcy credit card.  The filer needs some debt, like a new credit card balance or a small loan to prove that he is creditworthy after a bankruptcy filing.  Once the filer proves himself, he will be treated as any other customer and most likely receive a post bankruptcy credit card.