When I meet with new clients, they have often heard two big myths about bankruptcy before coming in for their free consultation. The first is that you will never be able to get credit again. The second is that you will never be able to file for bankruptcy again. Both of these are false. While you do have to let some time pass before you can get credit or file another bankruptcy, you will be able to do both of those things again.
If you file a Chapter 7 bankruptcy in which you can eliminate credit card debt, medical bills, delinquent utility bills, etc., you are not allowed to use credit for the 4-6 months that your Chapter 7 bankruptcy is active, but once the case is over, you can. You will get offers for credit cards and car loans as soon as your case is over. If you choose to get credit when your case is over, you should use it only to help rebuild your credit score. The best way to do this is by charging a small amount each month for something you’d buy anyway like groceries or gas and paying off the full balance each month. This will allow you to rebuild your credit without getting in debt again. You will usually have to wait two years after your bankruptcy is over before you would be approved for a home loan.
If you file a Chapter 13 bankruptcy, you are not allowed to use credit for the three to five years that you are in the bankruptcy repaying debts unless you get Court approval. The reason for this is that the Court does not want you getting into debt unnecessarily while you are still trying to pay off your old debt. Luckily, the judges do understand that you may need to purchase a vehicle during the time you are in the Chapter 13 or you might decide to go back to school and need student loans. They are very willing to approve you to obtain credit for good reasons even while you are in the Chapter 13 bankruptcy. Once you are done with the bankruptcy, you are free to use credit as you please, but most banks won’t approve you for a home loan for two years after the bankruptcy is over.
While my bankruptcy clients never intend on getting into debt again, unfortunately, sometimes things happen that are out of their control and they find themselves in debt in the future. No one wants to file one bankruptcy, much less two or more, but it is legal to do so. The length of time you have to wait before filing again depends on the type of bankruptcy you filed before and what kind you would be filing this time, but the longest you have to wait between bankruptcy filings is 8 years.
If you have avoided bankruptcy, because you are afraid you’ll never be able to get credit again or you think you won’t qualify, because you’ve filed before, don’t waste any more time. Give Steidl & Steinberg a call. You’ll get to meet with one of our knowledgeable attorneys for free who can dispel all of those bankruptcy myths. Bankruptcy doesn’t follow you forever, but you might never get out of debt if you don’t give us a call. And never is a long time.
