Credit and debt play major roles in the modern United States economy. Most people can’t go to college without student loans or buy a vehicle without a car loan. Many households require credit cards to pay monthly bills.
When your debt levels reach a point where you can’t keep making the necessary payments, you may have to consider bankruptcy to regain control over your debt. Some people will do just about anything to avoid filing for bankruptcy. They may mistakenly believe that they will never qualify for credit again after they file.
The truth is that while bankruptcy does affect your credit score and eligibility for personal credit, the impact is temporary and diminishes over time.
When can you get new lines of credit?
After a bankruptcy discharge, you are subject to a mandatory waiting period before you file again. The length of time you have to wait depends on the kind of bankruptcy filed before and the kind of bankruptcy this time. However, it will be multiple years before you are eligible for a bankruptcy filing again.
Every unsecured lender in the United States knows these rules and will take advantage of them by soliciting those who have recently qualified for a bankruptcy discharge for new lines of credit. You will probably start receiving credit solicitations within a couple of months after your discharge.
Although the terms offered at first won’t be ideal, the sooner you start rebuilding your credit, the sooner you will start receiving better offers. Car loans and mortgages may be possible within two or three years of your discharge. By the time the bankruptcy comes off of your credit report, you may have rebuilt your credit score to a point where you can qualify for a truly competitive loan.
Your current credit will end but new opportunities will be available
Generally, with the exception of secured lines of credit that you reaffirm or renegotiate, all of your personal lines of credit will close when you file for bankruptcy. Still, if you employ the right approach, you will have consumer credit at your disposal not long after discharge.
A few years after your bankruptcy proceedings, you will have almost identical credit opportunities when compared with any other consumer. Learning more about the real-world consequences of a personal bankruptcy filing can help you decide the best way to manage your current financial circumstances.
