rebuilding credit

Moving Forward...Life after Bankruptcy

At Fresno-Bankruptcy-Lawfirm.com, our goal is not only to help our clients get a fresh start, but to help them make the most of the opportunity. Although bankruptcy may legally be reported to your credit report for up to 10 years, you can start reestablishing your credit immediately. Remember that "credit" is your ability to borrow money. Lenders consider many factors while determining whether to loan you money, but most importantly, they consider your debt-to-income ratio.

Filing eliminates most, if not all of your debts, thereby reducing your debt-to-income ratio, potentially improving your ability to borrow money in the future. Some financial institutions actively solicit business from people who have filed. Lenders are in business to make money by lending you money and charging you interest. Lenders know that once you have filed, you will not be able to file again for a specific period of time (generally 4-8 years).

Many once bankrupt debtors purchase cars immediately upon receiving their discharge orders. Many lenders now have programs that provide for post-bankruptcy borrows to obtain home financing within a year or two after a discharge. Many of our clients even receive solicitations for unsecured credit cards almost immediately upon receiving their discharge. The key is to not to get back into the credit card "trap".

As anyone contemplating bankruptcy can tell you, it is nearly impossible to live a normal life today without credit. Many filers are surprised to find that their credit scores actually improve simply because their debts have been eliminated in bankruptcy.

While the fact of the filing can remain on a credit report for ten years, your credit score, the important part, starts improving immediately. Within the first couple months of filing you will start to receive credit card offers from companies that used to decline your requests for credit. Within two years of filing, government mortgage lenders are required to offer you the same rates of interest as anyone else so long as you’ve paid your debts in a timely manner after bankruptcy. Because you can only file Chapter Seven every eight years, many lenders will regard you as better credit risks, the day after you file for bankruptcy.

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