People often ask how to rebuild their credit after filing bankruptcy or how bankruptcy will affect their credit.  I am often asked if filing for bankruptcy will destroy credit for 10 years.  Most clients are surprised at how quickly their credit rebounds after filing their cases.  The ability to get a credit card or loan after filing is relatively easy to do.  Of course, we don’t recommend incurring debt during or immediately after filing but getting a credit card is typically achievable.  By getting a small secured credit line at your bank where you are putting in a collateral of cash in a deposit account can rebuild your credit. Additionally, becoming an authorized user on someone else’s credit card will also help build good credit history.

Making other payments such as your car payment on time will help rebuild your credit.  While it’s not unheard of to get a car loan upon filing for bankruptcy, most car lenders will require a discharge which happens 90 days after filing your case in order to get a car loan.  Bankruptcy allows you to surrender a car that is underwater without having to pay anything to the lender.  This allows people to buy a car outright or get new financing and a lower car payment without having to trade in a car with negative equity.

Regarding home loans, there are different types of home mortgages that you could be eligible for.  In order to qualify for a conventional mortgage, it can take anywhere from 2 years to 4 years from the date of your discharge.  To qualify for an FHA or VA loan, it may take as little as 1 year and up to 2 years from your date of discharge. I recommend once some time has passed after you receive your discharge to contact a licensed mortgage broker to see what type of loan you might be able to qualify for.

Should you have any questions, feel free to contact my office at (813) 463-8000 and we would be happy to answer any of your questions or concerns.