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Yes, you can rebuild excellent credit after a bankruptcy filing

Far too many people struggling with overwhelming levels of debt choose to put off filing for bankruptcy out of concern for how it will impact their credit. There's a common myth about bankruptcy that it will keep you from securing credit in the future.

While it is true that a bankruptcy on your credit report will impact your credit worthiness for some time, it will not be a permanent blemish. Also, simply filing for bankruptcy will not prevent you from securing new lines of credit in the future. Taking the right steps to rebuild your credit after you file for bankruptcy can help ensure that you have a healthy financial future ahead of you.

Bankruptcy only stays on your credit report for a few years

Having a bankruptcy record on your credit report will drag down your score and alert lenders to potential issues with you as a borrower. Thankfully, the record of your bankruptcy will not remain on your credit report indefinitely.

For those who seek the debt relief that comes from Chapter 13 bankruptcy, the bankruptcy will remain on their credit report for seven years, just like any other delinquent account or judgment. For those who file Chapter 7 bankruptcy, the bankruptcy will remain on their credit report for 10 years after the discharge.

You do not need to wait until the end of that reporting period to start rebuilding your credit. Instead, you can take steps immediately after your discharge to start establishing a healthy credit score for the future.

Responsible credit use will do a lot to help you

Too many people fall into the credit trap of avoiding all debt after a bankruptcy. Potential lenders do not want to see that you eschew all credit. They would much rather see that you can use the credit you receive responsibly. In other words, getting new lines of credit is better than not opening any after your discharge.

Within days of your discharge, you will likely have the ability to apply for a secured credit card. These typically have high annual rates and may also require a security deposit. However, the upside is that you can quickly begin building your credit after a bankruptcy.

Generally speaking, within two years of your bankruptcy, provided that you have no major debt or delinquencies, you can likely start applying for more significant lines of credit. Financing a vehicle or even a home is possible at this point, although waiting a few more years will help ensure that you receive a better rate. With a little work and planning, you can discharge your debts through bankruptcy and rebuild your credit even better than it was before you filed.

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Richoux Law Firm, L.L.C.
110 E. Kaliste Saloom Road
Suite 205
Lafayette, LA 70508

Toll Free: 888-327-5740
Phone: 337-205-7049
Fax: 337-456-6299
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