Obtaining Credit After Bankruptcy
People who come into our office considering bankruptcy are often concerned that they’ll never again be able to get credit after bankruptcy. These fears are perpetuated by credit repair companies and debt settlement scam artists who are trying to convince people that THEY can fix their problems without the “stigma” of bankruptcy.
I’ll say this one time and one time only with as much emphasis as I possibly can.
UNDER NO CIRCUMSTANCES DOES BANKRUPTCY PRECLUDE YOU FROM GETTING CREDIT IN THE FUTURE.
Yes, credit after bankruptcy will be harder to come by and you’ll likely pay a higher interest rate, but you can find credit. Yes, a bankruptcy can stay on your credit for up to 10 years after your file but as time goes on, it plays a much smaller role in decisions relating to your credit worthiness. Truthfully, you’re probably less of a credit risk now than you were before you filed bankruptcy. After your case is over there is less demand on your income and your debt to income ratio will be vastly better. You may even see your credit score go up.
Within two to three years after the discharge of your case, you’ll likely be eligible for a mortgage loan on terms that are similar to what you would have received if you had not filed bankruptcy. You’ll likely be on the same playing field as those with similar financial situations who haven’t filed bankruptcy.
Alas, there is no “right” to credit. People who look at your credit (landlords, banks, credit card issuers) are completely within their right to consider your financial history when it comes to making a decision about whether to rent you a home or apartment, giving you a line of credit or a personal loan. However, you are protected from discrimination in employment or governmental licensing based solely on the fact that you’ve filed bankruptcy.
If you feel that bankruptcy is right for you, please contact our office to schedule a free, no obligation consultation to determine what we can do to help you get back on the road to financial freedom.