Credit After Bankruptcy

     Obtaining credit after bankruptcy should be a concern of the debtor, whether he's filed already or is considering filing.  Bankruptcy filings, whether they are Chapter 7 bankruptcy or Chapter 13 bankruptcy, leave a mark on the debtor's credit record, for ten years if it's Chapter 7 bankruptcy and for seven years if it's Chapter 13 bankruptcy.  This doesn't mean that it is impossible to get credit after bankruptcy. There are many companies that service this segment of the market.

Credit After Bankruptcy Filing

     The debtor has to rebuild his credit after filing bankruptcy .  They have to prove that they are creditworthy. They will probably find that they will have the hardest time obtaining credit the first time they try after completing the bankruptcy process.  Once they get past that first time and prove they are creditworthy, subsequent credit will probably be obtained much easier. The more distant they get from the date of filing, the less interested the potential creditor is in the bankruptcy filing and the more interested he is in the present financial and credit situation. So one of the most important things to do after filing Chapter 7 bankruptcy or Chapter 13 bankruptcy is to re-establish good credit after bankruptcy.  A year-and-a half to two years later, they may be treated no differently than non-filers if they have re-established good credit.

Establishing Credit After Bankruptcy Filing

     What else can you do to re-establish good credit?  Change your habits.  Instead of charging to the hilt, try to pay as much in cash as possible.  You don't want to turn around and put yourself bank in the same situation as what led to the bankruptcy filing.   Establish yourself as a saver, whether it's through a credit union, savings plan or just by putting money away in a savings account out of every check.  These things show on your credit report.  You are better off having these items in the plus columns that a lot of accumulating debt in the minus column.

     Also, as stated above, there are many banks and loan companies that service people who have filed for bankruptcy.  It's their niche in the market.  This helps the recent filer to re-establish credit after the bankruptcy filing.  There may be certain rules, like money secured in an account as a guarantee of payment, but this helps the filer to build a clean credit after bankruptcy. A filer cannot be discriminated solely on the basis of having filed for bankruptcy.  There are many entities that cater to those with a bad credit history that need to rebuild their credit.  Make sure they are reputable before you deal with them, as with any entity.

     The debtor wants to check his/her credit reports after a bankruptcy filing.  You want to make sure that the discharged debts are gone and aren't showing up as current outstanding debts.  You want your post-filing credit report to look as clean as possible.  You need some debt, like a new credit card balance or a small loan to help establish your credit after bankruptcy.