For most people considering bankruptcy, their credit is severely damaged already. If that is the case, bankruptcy may not make much difference in your credit rating in the short-run. However, in the long-run, bankruptcy can be the first step to rebuliding a solid credit ratiing and better financial future.

A Chapter 7 bankruptcy remains on your credit for up to ten years, and Chapter 13 reamins for 7 years. The time runs from the date you file your bankruptcy case. However, that does not mean that you will not be able to reestablish your credit for ten years.

Because you discharged debts that you could no longer pay, you are in a better position to rebuild your credit than if you could not meet your payments. From a lender’s perspective, a customer with a lower debt load is more attractive than a customer who is maxed out and paying late. For that reason, many debtors have impoved their credit ratings enough to obtain a mortgage within two to three years of filing, if they have taken the steps necessary to reestablish their credit. Auto loans are usually available much sooner.

We make a point of providing our clients with the information they need to rebuld their credit after bankruptcy. For more on life after bankruptcy, see our post: Bankruptcy and Beyond. >>More