Your Financial Future

Your Credit Score

Once you have filed for bankruptcy, your credit score will be adversely affected. There is no getting around this. Fortunately, after you emerge from bankruptcy, you can begin to repair your credit. In order to rebuild your credit, make sure that you pay your bills in a timely fashion. Think of your credit score as your “financial reputation.” Once you have filed for bankruptcy, you need to work to repair that reputation. To do so, you must be financially responsible.

A chapter 7 bankruptcy filing will appear on your credit report for 10 years. A Chapter 13 bankruptcy filing will be listed on your credit report for 7 years.

Obtaining Credit Cards

Obtaining a credit card after you emerge from bankruptcy is relatively easy. Not surprisingly, though, the credit card offers you will receive usually are accompanied by very high interest rates. So, if you are inclined to obtain a new credit card, it is extremely important that you pay all of your bills in a timely fashion so as to avoid digging yourself into another financial hole. Paying your new credit card completely and timely is a good way to build back your credit score.

Getting a Mortgage

One of the myths of bankruptcy is that you can never get a mortgage after you have filed. This simply is not true. Getting a mortgage after filing for bankruptcy is difficult, but it is not impossible. Several factors will affect your ability to get a mortgage, including your credit score, the type of loan you are seeking and the type of bankruptcy filing (i.e. Chapter 7, 11 or 13) you file. In certain circumstances, depending on the loan, you may even be able to obtain a loan during your bankruptcy. Some loans may require you to wait between 2 to 4 years after your bankruptcy discharge.

Of course, you still must qualify for a loan with a steady income and sufficient credit score. So, be prepared to explain the circumstances surrounding your bankruptcy and why you would be a good credit risk for a lender.

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