Filing for bankruptcy does not mean that you will never be able to access credit again. It also does not mean that, after discharging your old credit card debts in bankruptcy court, you can immediately open up a new account with the same credit limit and start making purchases like you used to do in the old days. You will have to rebuild your creditworthiness gradually, but it may not be as difficult as you expect. In some ways, gaining the trust of lenders when you have previously filed for bankruptcy is easier than gaining their trust when you have no credit history at all. To strategize about ways to gain access to credit after a Chapter 7 bankruptcy filing, contact an Oakland Chapter 7 bankruptcy lawyer.
Raising Your Credit Score After a Bankruptcy Filing is a Waiting Game
Your credit report reflects many of the things you are doing right, as well as financial setbacks that you have experienced in recent memory. While it does not show every bill you have ever paid, it does show some of them. Car loan payments, mortgage payments, and installment payments on medical bills when you have entered a payment plan agreement show up on your credit report. Unfortunately, buy now pay later (BNPL) payments, rent, and utilities do not show up. Therefore, if you owned a house and a car, and the court exempted them from liquidation, your credit report will show you continuing to make payments after your bankruptcy filing. With or without bankruptcy filings, the large segment of the population who rent their homes and use BNPL instead of credit cards is largely invisible to credit reporting bureaus.
A Chapter 7 bankruptcy filing remains visible on your credit report for ten years, and a Chapter 13 filing remains visible for seven years. When you are in good standing with your mortgage and car payment, it balances out the negative mark of the bankruptcy filing, and you will start to see your credit score improve quickly. As for the payments you missed in the years leading up to your bankruptcy filing, they will eventually disappear from your credit report, but you just have to wait.
Borrowing Money You Already Have
If you need to borrow money, you can borrow from friends or use BNPL, but this won’t help your credit score. The best thing you can do is to tell yourself that you are going on a cash-only diet but actually use the cash for secured credit cards or credit builder loans. These types of financial products require you to deposit the loan amount with the lender before you borrow. You are effectively borrowing money from yourself and paying interest. It sounds expensive, but it is one of the fastest ways to raise your credit score.
Contact the Law Office of Melanie Tavare About Chapter 7 Bankruptcy Cases
A bankruptcy lawyer can help you find a way to rebuild your creditworthiness after bankruptcy as painlessly as possible. Contact the Law Office of Melanie Tavare in Oakland, California, or call (510)255-4646 for a free case evaluation.
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