“After I declare bankruptcy, will I ever get credit again?”
I hear that a lot, and the answer is yes. You get a clean slate after you
file for bankruptcy. Creditors, car dealers, new credit cards will be
contacting you. Your mailbox will be stuffed with solicitations for new
cars for no money down, and credit lines. All of these things are coming
your way shortly after you file bankruptcy.
Why? After you file for bankruptcy, you cannot do it again for another
eight years. You still have income and you have no more debt. From a cash-flow
perspective, you are a much better credit risk after you filed for bankruptcy.
If they were going to lend you money before you filed, they would look
at you and say, “Hey, you have some income, but you also have a
lot of debt, and there’s a danger of you being able to file for
bankruptcy and wipe us out.”
After you file for bankruptcy, all those risks are gone. You still have
your income, but you can’t use bankruptcy again and you don’t
have any other bills to pay, so any money you are making after bankruptcy
is free to be spent on new things. The businesses, the lenders, they know
this and it’s in their business model. You will get lots of new
credit after filing for bankruptcy. After two years, your credit will
be just as good as someone who didn’t file for bankruptcy. You’ll
be able to buy another house within two years under current regulations.
That does keep changing. A couple years ago, before the mortgage meltdown,
you were able to buy a house within a year after filing a Chapter 7.
The answer to whether you’ll get credit after filing for bankruptcy
is a resounding yes, and you’ll probably be better than before!