Joliet Bankruptcy Attorney Reports: How Bankruptcy Appears On A Cred...

Bankruptcy will show up on a credit report for up to 10 years.  It will list the case number, and it will list the approximate amount of money that was discharged by the debtor.  However, just because something is on a credit report does not mean that the debtor will not receive offers for credit within the next six months to two years. 

I have found several of my clients who have received offers for credit before their bankruptcy case has even gone to discharge.  For example, credit card offers will routinely come in the mail prior to a case going to discharge, because those creditors know that the individual debtor cannot file another bankruptcy for eight years under Chapter 7.  The creditor believes that they can profit from the debtor by charging annual fees, and higher than normal interest rates. The creditor is banking on the fact that the debtor is addicted to credit, is used to having a plastic credit card in their wallet or purse, and is going to succumb to the annual fee and the higher interest rate for the convenience of having that plastic. 

If the debtor can wait two years two from the date of filing, they’ll be in a better position to qualify for a loan on a home, despite the fact that the bankruptcy is still showing up on the credit report.  There will also be a hit in the terms of a credit score.  At the time of this writing, I can’t tell you exactly what the score hit is going to be, because it does change periodically, but suffice to say that there will be a hit on the credit score. 

However, the best way to get out of debt and rebuild your credit is to actually file a bankruptcy, eliminate the debt, and begin to rebuild your credit slowly.  One of the best ways to rebuild your credit is to take out three trade lines after your bankruptcy is filed.  One trade line might be on a vehicle financing that you’re reaffirming the debt on the bankruptcy. 

The other might be a secure credit card that you acquire from your bank account by putting money in a bank account, and using the credit that you’ve put in as your charging privileges.  Secure credit cards will report positively to the credit bureau, which will help increase your score over time. 

Another trade line that you might want to take out is for a furniture purchase or an electronic purchase of some sort.  Provided that the purchase is paid back on time, the credit bureau will reflect a positive score for that event.

See also, Joliet Bankruptcy Attorney David Siegel.