Many people think that after filing Chapter 7 or Chapter 13 their credit will be forever ruined.  Not true.  First, bankruptcy filings will disappear from your credit report after 10 years.  You say, 10 years!  How can I wait that long to have another credit card!  Well, the truth is that you won’t.  There is no prohibition on obtaining new debt obligations after your bankruptcy case is concluded.  So how would you get new credit?

First, you have to pay your debts on time.  For most people, most secured debts like home mortgages and car loans and leases remain in place and are generally unaffected by a bankruptcy filing.  So after you file bankruptcy and after your bankruptcy case is closed you will have to be disciplined and pay those on time.  If you don’t have a house and you rent, then pay your rent on time, giving nothing negative for a landlord to report to a credit bureau.  A timely payment history will be reported by your creditors to the three major credit reporting agencies (Equifax, Transunion and Experian) and this good record will help you rebuild your credit.

Next, obtain a secured credit card if you have the funds.  The way this works is you go into a bank and tell them you would like to set up a secured credit card.  They will discuss how much you will have to keep on deposit and how the terms work.  You can shop around for the best deal.  Then, use this credit wisely.  Charge only what you can pay off in full at the end of the month so that any funds you have on deposit to secure that credit card will not be touched.

Third, after your bankruptcy case is concluded, you will also likely be contacted by credit card companies that will not require you to post an amount for security with them.  You will likely pay higher interest rates, but you will be approved for credit.  Importantly, you must not get back into the same spending habits that you had before you filed for bankruptcy.  Keep the balances on any of these credit cards well within your ability to repay and, just like your mortgage, rent or car payment, pay them all on time.  Eventually, as time passes, your credit score will improve.  You will really need to keep any new debt on these credit cards under control because you will not be eligible to file a bankruptcy petition and receive another bankruptcy discharge for between 2 to 8 years, depending on which type of bankruptcy (Chapter 7 or Chapter 13) you had filed before.

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