After Bankruptcy

Manage Your Finances AND Your Expectations.

The truth is that bankruptcy laws were created to help consumers. After filing bankruptcy, you will likely feel relieved.

However, many people who are thinking about filing are worried about what happens AFTER they file. They've heard all kinds of rumors, such as, "You can't get credit for ten years after bankruptcy." This is WRONG.

What Happens After Bankruptcy?

Shortly after filing bankruptcy, your credit may not be strong. However, your credit was likely not strong when you were dealing with the circumstances that resulted in your bankruptcy filing.

Here's what you can realistically expect after your bankruptcy discharge:

• Unscrupulous creditors will likely flood you with offers of low-balance credit cards to help you "rebuild" your credit after bankruptcy. Unfortunately, many of these offers come with activation fees and membership fees that could push you near your credit limit before you've ever used the card. And then late charges and over-the-limit fees will kick in, putting you right back where you started: in debt and with late payments on your credit. So what can you do? Choose your new credit accounts with care. There are reputable lenders who will give you a chance to re-establish credit after bankruptcy. Don't get so eager that you abandon your better judgment.

• After bankruptcy, you won't immediately be able to qualify for most conventional mortgages, car loans and the like (learn more about cars in bankruptcy so you know what you may expect when you file). For most people who file bankruptcy and then pay their bills on time, however, those loans will be within reach 2-3 years after discharge. So while bankruptcy won't be a quick fix for helping you get a new, big loan it can help you achieve good credit standing in a fairly short period of time.
  

• You may see a higher interest rate for your first few loans or credit accounts. Those rates are dependent on your three-digit credit score and those scores will be low right after bankruptcy. While bankruptcy may clear your debts, it won't clear your credit history. However, negative items on your credit typically have less and less impact as they age. If you replace them with more recent, positive items, your credit score can quickly rise to good and even strong levels.

The bottom line is that if you're like most bankruptcy petitioners, not much will change right after your discharge--other than your eligible debts being gone.

Discuss Life After Filing Bankruptcy with a Bankruptcy Lawyer

Your credit was probably weak before you filed bankruptcy and it will be weak immediately after. Without those old debts hanging over your head, though, you'll have the opportunity to start to rebuild your credit.

In time, if you handle those early accounts carefully, your credit can be stronger than it was before you filed and you'll begin to see not only more credit available, but lower interest rates and more favorable terms.

If you have more questions about life after bankruptcy, a bankruptcy lawyer may be able to answer them. Click below to connect to a lawyer for free.

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