Most of our clients think that if they file a bankruptcy case, they will never get credit again.
As a Killeen Bankruptcy Attorney and a Waco Bankruptcy Attorney, I have found that not to be the case.
We have many clients who come to us for repeat bankruptcy filings because we discharged their debt in one bankruptcy case, they obtained credit again, and now need to file bankruptcy again. We certainly do not recommend multiple filings. However, the fact that this happens proves to us that people do receive credit after bankruptcy.
If you are contacting a bankruptcy attorney, you probably have a serious debt problem that needs to be addressed.
Many clients with massive amount of credit card debt tell us, “I have a great credit score!” That doesn’t mean that they have good credit…..that just means they pay their bills on time!
And, they might be current by making just minimum payments on their credit cards and their credit score is still high. However, a job loss, layoff, divorce, illness, puts them in the unexpected position of not being able to pay their bills. The money just isn’t there to continue this juggling act any longer.
After Bankruptcy, Restoring Credit Rating
Remember a few key points:
- It is not bankruptcy that wrecks your credit, it is not paying your bills.
- People who cannot pay their bills are the ones who file Chapter 7 bankruptcy or Chapter 13 bankruptcy.
- If you do not file a Chapter 7 bankruptcy case or a Chapter 13 bankruptcy case, you still will not have the money to pay your bills, and will still have a bad credit score.
A good credit rating comes from paying your bills on time. That is the only way.
Watch out for the scam companies with the magic formulas, who say they can get bankruptcy off of your credit report. They are truly scams.
You will still pay for your vehicle and home mortgage after you have filed for bankruptcy, if you want to keep these assets. You will also continue to pay your gas, electric, phone, cable, and internet bills if you want to keep these services. Paying these bills on time will help restore your credit.
Will you keep paying on a vehicle or mortgage after you have filed a Chapter 7 bankruptcy case or a Chapter 13 bankruptcy case? Yes. Also, after your bankruptcy case is filed you have a right to examine your credit report and make any changes to it to make it correct. This can help your credit score.
If you are renting, paying your rent on time that will help your credit score.
Yes, you pay higher interest for credit cards after filing a Chapter 7 bankruptcy case or a Chapter 13 bankruptcy case. However, after all of your credit card debt is discharged in a Chapter 7 bankruptcy case we advise clients to not incur large debt to credit card companies again. If you don’t have those large balances, you won’t have those high interest rates!
Most of our clients are offered credit cards while they are still in their Chapter 7 bankruptcy case. Its not a bad idea to accept one of those cards, charge a tank of gas on the credit card, and pay that debt off each month. Continue to make those small charges and pay the balance off each month. This will help improve your credit score and will teach the discipline of living on a monthly budget.