Clients will almost always ask me what the impact a bankruptcy filing will have on their credit score. Usually, the question I am asked is “will I ever be able to get a loan again?”
In all my years of practicing bankruptcy law, the response has never changed. It will depend on two things: that which the client can control, and that which the client has no control.
A client who has filed bankruptcy should use credit wisely after bankruptcy. Got a car payment? Always be on time. Got a mortgage payment? Never be late and always pay the amount in full. Check your credit report at least twice per year and look for incorrect entries and take prompt action to see that they are corrected. These are the things a client can control. But that alone will not help a client get access to credit.
Clients cannot borrow money or obtain lines of credit if banks are not lending. Unfortunately, it really is that simple.
Several years ago, when the housing bubble was still inflating, a client who had received his discharge called me to tell me that he received a credit card – and his discharge was only a few months old. Needless to say, banks are not lending with that same level of fervor as in years past. So what I advise my clients is this: focus on what you can control, and that starts with your relationship with credit after your bankruptcy case has concluded. The rest will fall into place…when it eventually does.
For more information on the impact of a bankruptcy filing on your credit score, see these articles:
Smart Money: Declaring Bankruptcy Can Improve Your Credit Score
MSN: Bounce Back Fast After Bankruptcy
Related posts:
- Bankruptcy and the Credit Report
- Facing Bankruptcy with Nagging Regret
- Bankruptcy Myths and Misinformation
- Rumor Control: Credit Reports and What’s Dischargeable in Chapter 7
- I Have a Bone to Pick with a Credit Union
Tags: credit, Credit and Debt, Credit Report
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