A bankruptcy can last on your credit for up to ten years after the filing, but it does not mean that you cannot get credit in those ten years. It may be harder to get credit initially after the bankruptcy, but you can get credit again and there are ways to rebuild your credit more quickly.
Can I Save a Credit Card and Not List it in the Bankruptcy?
Any debts that you have must be listed in the bankruptcy filing. If, however, a credit card does not have a balance at the time of the filing of the bankruptcy, it is not a debt and you do not have to list it. So, if you have some credit cards without a balance, you do not have to list them. Keep in mind that many cards even if you do not list them in the bankruptcy will cancel you anyway because they learn of the bankruptcy through updated credit checks or being affiliated with another card that was listed in the bankruptcy.
Believe it or not many credit cards are now soliciting and offering cards right after a bankruptcy discharge is entered. These credit card companies realize that a debtor cannot file another Chapter 7 bankruptcy for eight years. Therefore, a debtor that just completed a bankruptcy is a better credit risk after a bankruptcy than that debtor was prior to filing bankruptcy.
Can I Get New Credit after Bankruptcy?
You can get credit after bankruptcy. Obtaining credit may be more expensive than before, but you will be able to get credit. Today, many companies offered secured credit cards to anyone. With secured credit cards, you give the bank a deposit and they will give you a small lending limit. A way to build up credit after bankruptcy is to get some secured credit cards, buy some things on credit and make sure you pay off the cards in a timely manner. Your credit report reads like a time line. It will show the bankruptcy but then your good credit after the bankruptcy if you make an effort to rebuild it after the bankruptcy.
Can I Get a Mortgage and Buy a House after Filing Bankruptcy?
Yes. If you make a conscious effort to rebuild your credit after bankruptcy you may be in a position a year to two years after the bankruptcy to buy a house. Of course, a lot will depend on the income you are earning and the amount of deposit that you have to put down on the home. If those factors are good, you should be able to purchase a home. In fact, banks are much more concerned about the amount of your down payment, the stability of your income, and the comparison of your loan and other debt payments to your monthly income.
Is it Worth it to File Bankruptcy if it Ruins My Credit?
Unfortunately, most people walking into our office already have bad credit or will have bad credit very soon because they cannot keep up with their debt payments. Therefore, the bankruptcy over the long term will only help your credit because if you can wipe out the overwhelming debt your financial health will become stronger more quickly.
A vast majority of our clients are a far better credit risk after bankruptcy than before. Thus, they will have the ability to raise their credit scores faster after the bankruptcy than they would have trying to dig out of the debt.
Contact a Bankruptcy Attorney in One of Our New Jersey Offices to Discuss Your Options
Contact one of our New Jersey bankruptcy attorneys to discuss how to best proceed and the impact of bankruptcy on your credit. A lawyer in our office will provide a free initial consultation. Our law firm currently serves the following New Jersey Counties: Passaic County, Hudson County, Essex County, Bergen County, Morris County & Sussex County.
