Restoring Credit After Bankruptcy

What About My Credit Rating?

One of the most common myths about bankruptcy is that it ruins your credit rating forever. It is true that bankruptcy will appear on your credit rating for several years and, in the short term, it will have a negative affect on your credit rating. What may surprise you, however, is how quickly you can rebuild your credit rating after bankruptcy.

When you discharge credit card debts, medical debts and other unsecured debts through a Chapter 7 bankruptcy, you lighten your debt load and improve your ability to make timely payments on future debts. By making timely payments and maintaining a low debt load, you can improve your credit rating.

Consider the circumstances: If you were a credit card company, would you rather extend credit to a person with a huge debt load who continually makes late payments OR offer credit to a person with a small debt load who has made timely payments for the last 6 or 12 months? When you think about it from the lender’s perspective, a person with a low debt load is probably the best bet.

Rebuilding Credit After Bankruptcy: Credit Cards, Auto Loans, Home Mortgages

It may be hard to believe, but many credit card companies, auto lenders and home mortgage institutions look more favorably on a person who has filed bankruptcy and thereafter made timely payments for a reasonable period of time than a person who has a high debt load. This makes sense if you understand the U.S. Bankruptcy Code. The Code requires debtors to wait at least 8 years after the discharge of a previous Chapter 7 bankruptcy before they can file for Chapter 7 relief a second time. As a result, a person who has never filed for bankruptcy and has significant debts may be a higher credit risk.

Contact the Law Office of Weston R. Moore

To learn more about Chapter 7 bankruptcy, Chapter 13 bankruptcy, rebuilding your credit score after bankruptcy and other debt-related matters, contact an experienced bankruptcy lawyer at the law office of Weston R. Moore. Our firm is located in Johnson County in the heart of the Kansas City metro area. To schedule a free consultation with attorney Weston R. Moore, call 913-782-7075, or contact us by e-mail.

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