Joliet Bankruptcy Attorney On Getting Credit Again After Filing For ...

Credit is available after a bankruptcy filing.  Most debtors in Chapter 7 will get peppered with credit card offers before their case is even finished.  The offers are going to be bad.  Limits are going to be small and the interest rates are going to be ridiculous.  Generally speaking, what I recommend to clients is they wait 6 months after a Chapter 7 discharge and then potentially get maybe one credit card.  Keep it small, pay it off every month, use no more than one-third of the limit and keep it paid off.  If you’re able to do this it’s a great way to rebuild.  I recommend a 6-month waiting period just so their credit reports will update themselves based on the debt.  Debtors also want to be careful about pulling their credit report to make sure that everything is reading as discharged in bankruptcy.  A common misconception on bankruptcy is that it’s a clean slate.  That’s not quite correct.  More it’s better to say that whatever your situation was as of the date your case is filed, that’s preserved.  So whatever the standing their credit cards were on that date, it is what it is, but going forward you won’t have a personal obligation.  So you don’t have to pay them anymore in a Chapter 7, but whatever your past history was in terms of payments for credit purposes, that still are what it is.  That, plus the public record bankruptcy filing, do significant amount of damage to their credit score.  Another interesting effect is assume that someone has good credit, you know, low 700 credit rating, missing those first few payments is going to as much or more damage than the bankruptcy filing, itself, because of the nature of it.  Credit is one of those things you either have to keep it really, really good, but any small lapse or problem will cause a substantial drop in the credit score if you have a high end credit score.  Generally speaking, you’re looking at about 2 to 3 years after a Chapter 7 bankruptcy to buy a house, depending on, again, how much money you’re putting down, how much you’re building and what your financial situation is and what’s going into the case.  Cars are easier to get.  I would recommend about a year for a decent car loan at a decent dealership.  A lot of it depends on, again, how much money you’re making, what kind of money you’re putting down.  As a practical effective bankruptcy, the interest rates you’re going to pay are higher and you have to put more money down, but going in with that understanding can often help someone plan effectively for the car or home purchases within the few years after bankruptcy.  Also, if you go to rent an apartment, they pull a credit report and they actually look at the credit report, it can affect that, as well.