Understanding How Credit Is Affected After Filing Bankruptcy

When a person files bankruptcy, naturally, your credit is going to be affected. But it’s not as bad as a lot of people might think. For instance, if you file Chapter 7, it will be reported to the credit agency for ten years. If you file Chapter 13, it’s going to be reported to the credit agency for seven years. But this doesn’t mean that you cannot get credit during this time period. Actually, credit is pretty easy to get.

I often tell people about a story. I had a client who lived in another county and she was a postmaster. So she used my address and my office to have mail sent because she didn’t want the mail sent to the post office because she knew everyone. So after her case was over with, I got an average of two credit solicitations every week for a year.

Initially you might have to pay a higher interest rate. Usually, you can get a mortgage at a normal rate about four years after you file, as long as you qualify income wise. You can still get credit. But the one thing you want to keep in mind and be careful about is as soon as you file, you are starting to develop a new credit record from that point forward. So you want to be timely on any future payments so you can develop a new credit record.