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How Quickly Can Credit Worthiness Be Rebuilt After Bankruptcy?

Filing for personal bankruptcy may seem like a seven to ten year sentence. After all, that is how long it will be before you can get loans and credit cards, right?

Well, not exactly. If you have a stream of income, many financial institutions may still want your business. Within a relatively short time after you file for bankruptcy, you may receive offers for secured credit cards in the mail — such cards must be collateralized with a cash deposit. The recent filer is either thrilled or skeptical of such offers, but suffice it to say the offer is real. If you put $100 into such an account, you will have $100 spending power with that card.

Post-filing, there are at least three things you can do accelerate the rebuilding of your credit score, restoring you to financial functionality:

  • Check your really bad credit report after the filing – Debts that are discharged in a bankruptcy should not continue to haunt your credit score. Use this government handbook (see page A-23 for phone numbers) to learn how to notify credit agencies.
  • Start using a secured (bank) card – Otherwise referred to as a debit card, you boost your credit score if you maintain a balance in the account and use it occasionally. Key point: do not overdraw your account.
  • Get one credit card but use it judiciously – After a few years of responsible spending and on-time bill payment, you may qualify for a card with a line of credit, no collateralization required. Just be careful to keep up payments and minimum balances, if any.

Speak with a bankruptcy attorney if you have specific questions on credit cards.

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