REALITY: This is a myth that continues to be perpetrated on the public. On the contrary, you will get credit again, often right after the discharge is granted! The negative impact of bankruptcy on your credit is greatly exaggerated. Bankruptcy is often no more harmful to your credit record than the defaults that preceded the bankruptcy. Remember: The bankruptcy laws are designed to provide you with a fresh financial start. Filing bankruptcy gets rid of debt, and getting rid of debt puts you in a position to handle more credit, and this makes you look more attractive to would-be lenders. In my experience, it won’t be long before you’re getting credit card offers again.
At first, the lenders may want more money down and will want to charge you higher interest rates. However, over time, .if you are careful, keep your job, save money, and pay your bills on time, and do things that will put positive marks on your credit report, the quality of your credit will improve. Generally, in our experience, if a client has not re-established good credit in 18 to 24 months, sufficient to buy a car or even a house, it’s not because they filed bankruptcy. It generally means that something else has happened after the bankruptcy to hurt the client’s credit.
Moreover, we commonly assist our clients in variety of ways in credit restoration. One of those is obtaining a debit credit card that reports to the credit bureaus. These cards are backed by money that you deposit in a special account. As you make your various payments every month, the cardholder reports this information to the credit bureaus: this is a very powerful tool in helping you re-build your credit.
REALITY: Not true. Don’t get 2 completely different concepts confused with each other. The fact that bankruptcy is reported on your credit report for several years, does NOT necessarily mean it will have a negative effect on your credit standing for that period of time.
The truth is, by the time you need to make an appointment to see a bankruptcy attorney, your credit is usually already damaged. You have no credit for bankruptcy to hurt! Post Bankruptcy use of credit is much more important than the fact that an “old” bankruptcy lingers on your credit report.