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How soon can credit be rebuilt after a Chapter 7 discharge?

Readers may still associate a bankruptcy filing with certain stereotypes or stigmas. Some may believe that only consumers with poor debt management skills utilize the protections offered by this area of federal law. Others may view a Chapter 7 filing as a last-resort option that results in a black mark on one’s credit rating.

Let’s set the record straight. First, when debts become unmanageable, a consumer’s credit score will likely become damaged by those late payments. Although a Chapter 7 filing will show up on an individual’s credit report for up to ten years, it may be a much smarter strategy to simply start over with a clean slate.

In addition, credit is an ongoing process, which means that it can be rebuilt quickly. For example, it might be possible to qualify for a VA or FHA home loan as quickly as one year after a bankruptcy discharge. 

Automobile lenders may also offer options to consumers rebuilding their credit after a filing. Such lenders may look to see whether a consumer had previous auto loans that were in good shape prior to the Chapter 7 filing. A car dealership might also have a financing team that is willing to work with individuals in unique situations.

Even credit card offers may start flowing in soon after a bankruptcy discharge. One option might be a secured credit card. By paying one’s bills on time, the process of rebuilding credit scores will be sure and steady. Our law firm has helped consumers in many difficult financial situations to review their options, including learning the facts and myths about bankruptcy

Source: Auto Credit Express, “Buying a Car After a Chapter 7 Bankruptcy,” Oct. 6, 2015

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Goldman & Beslow, LLC is a Federal Debt Relief Agency by an Act of Congress. We have proudly assisted consumers seeking relief under the U.S. Bankruptcy Code for over 38 years.

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